Perhaps Assignor Estoppel Survives at the PTAB…via the District Court
A preliminary decision in the District Court of Delaware introduces the possibility that a patentee’s victory on assignor estoppel in the district court could quash a co-pending IPR proceeding at the PTAB. Assignor estoppel is applied to prevent a patent assignor (e.g., inventor) from challenging the validity of his or her own patent. Recently, the Federal Circuit in Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792, 793 (Fed. Cir. 2018) blessed the PTAB’s refusal to apply this doctrine, allowing inventors to pursue an IPR against his or her own patent in an IPR. In contrast, inventors are often barred in district court cases from challenging the validity of their own patent under assignor estoppel. Yet, recently in AgroFresh Inc. v. MirTech, Inc., CV 16-662-MN-SRF, the magistrate judge granted AgroFresh’s request to file an early motion for summary judgment asserting assignor estoppel that would prevent the PTAB from issuing a Final Written Decision, thus representing a potential end-run around the PTAB’s refusal to consider the doctrine.
Following a protracted battle over ownership of the patent, AgroFresh asserted the ’216 patent against defendants MirTech, Decco, and UPL, all of whom were collaborators with AgroFresh on the subject matter embodying the ’216 patent. MirTech eventually settled with AgroFresh, but Decco and UPL remained in the case and UPL filed a petition for inter partes review of the ’216 patent.
In response, AgroFresh moved for leave to file an early motion for summary judgment in order to assert assignor estoppel against UPL—well ahead of the date provided in the court’s scheduling order—in order to obtain a ruling before the PTAB issues its Final Written Decision in the IPR. UPL argued that the court should deny AgroFresh’s request since the PTAB should first be permitted to render its Final Written Decision on the patentability of the ’216 patent.
The magistrate judge declined to rule on the merits, but granted AgroFresh’s request to file the early motion for summary judgement. The court found that the interests of judicial efficiency would be served best by addressing assignor estoppel prior to the PTAB’s issuance of a final written decision, particularly since if AgroFresh prevails, “UPL’s validity challenge in the IPR proceeding would be nullified due to the estoppel effect of the doctrine.” Order at 9. The magistrate judge reiterated that “[a] decision in AgroFresh’s favor may impact the viability of the pending IPR proceeding, and would eliminate the invalidity defenses regarding the ’216 patent from the litigation.” Id.
This case will be interesting to follow because AgroFresh appears to have found a method to overcome the PTAB’s refusal to consider the equitable doctrine of assignor estoppel. With the early motion for summary judgement, AgroFresh has the opportunity to litigate this issue prior to the PTAB’s issuance of a Final Written Decision. Furthermore, it will be interesting to see how the District Court will implement its ruling, in the event it rules in AgroFresh’s favor. For instance, it will be interesting to see whether the District Court would order a stay or termination of the co-pending IPR, or by what other mechanism the District Court would prevent the PTAB from issuing a Final Written Decision that could potentially invalidate the patent claims.