DOCTRINE OF ASSIGNOR ESTOPPEL LIMITED TO REPRESENTATIONS MADE IN ASSIGNING A PATENT

By:  Gene M. Garner II, Partner

In a June 29, 2021 opinion in Minerva Surgical, Inc., v. Hologic, Inc., et al., 594 U.S. __(2021), on Writs of Certiorari to the United States Court of Appeals for the Federal Circuit (Federal Circuit), the United States Supreme Court (“the Court”) upheld the patent-law doctrine of “assignor estoppel” which “limits an inventor’s ability to assign a patent to another for value and later contend in litigation that the patent is invalid” but limited the application of the doctrine to “when, and only when, the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent”.

The Court relied on its prior decision in Westinghouse Elec. & Mfg. v. Formica Insulation Co., 266 U.S. 342, 349 (1924) in which the “Court approved the ‘well settled’ patent-law doctrine of ‘assignor estoppel’”, and further asserted that “assignor-estoppel” is “rooted in an idea of fair dealing.”

More specifically, the Court held that assignor estoppel is “well grounded in centuries-old fairness principles”.  However the Court asserted that there are proper limits on the doctrine.  The Court asserted that “[T]the equitable basis of assignor estoppel defines its scope:  The doctrine applies only when an inventor says one thing (explicitly or implicitly) in assigning a patent and the opposite in litigating against the patent’s owner”.

Again relying on Westinghouse Elec. & Mfg. v. Formica Insulation Co., the Court asserted that the doctrine of assignor estoppel may estop an inventor from claiming that a patent the inventor assigned is invalid but does not limit the assignor’s ability to use prior art to support a narrow interpretation of the claims while conceding their validity.  The Westinghouse. Court relied on the principles from real property law of “estoppel by deed” which prevented a landowner from conveying land then later arguing that the landowner who conveyed the land lacked good title to the land at the time of sale.

In the instant case, inventor Csaba Truckai founded and assigned his interests in a patent application and any future continuation applications related to a device called the NovaSure System to a company Novacept, Inc.  Eventually, respondent Hologic, Inc. acquired all patent rights in the NovaSure System.  Subsequently, Truckai founded another company Minerva Surgical, Inc., developed an improved device called the Minerva Endometrial Ablation System, filed a patent application, and was granted a patent.

In the meantime, Hologic filed a continuation application requesting to add claims to its patent for the NovaSure System, including one claim which encompassed applicator heads of the Minerva Endometrial Ablation System.  The Hologic continuation application subsequently issued as a patent.

Hologic then sued Minerva for patent infringement of Hologic’s continuation application.  Minerva contends that its device does not infringe and, moreover, that the scope of Hologic’s broader patent claim added in Hologic’s continuation application is invalid as being overly broad in view of the continuation application’s specification.

The instant Court asserted that contradiction creates unfairness and “[W]when an assignor warrants that a patent is valid, his later denial of validity breaches norms of equitable dealing”.

The instant Court also asserted that one example of non-contradiction is when the assignment occurs before an inventor can possibly make a warranty of validity as to specific patent claims.

In the instant case, Hologic’s new claim was added in Hologic’s continuation application subsequent to assignment by inventor Truckai, but such issue was not considered by lower courts including the Federal Circuit.  Hologic contends that the new claim matched a prior claim that Truckai had assigned.

The Court therefore remanded the case to the Federal Circuit to resolve the issue of whether the new claim expanded on the old or matched a prior claim that Truckai had assigned, and asserted that “[R]resolution of that issue will determine whether Truckai’s representations in making the assignment conflict with his later invalidity defense – and so will determine whether assignor estoppel applies.”