The inventor on the patent, Dr. Cheriton, was employed by Cisco as a technical advisor and chief product architect at the time he filed the application that led to the patent. Dr. Cheriton assigned all rights to the invention to Cisco and generally agreed to aid Cisco, at their request and expense, in obtaining and enforcing patents for his invention. Dr. Cheriton later left Cisco and, along with others, founded Arista. Dr. Cheriton served as Arista’s Chief Scientist for several years. He also served as a director and was one of its largest shareholders.
Assignor estoppel is not applicable in IPR proceedings.
Cisco later sued Arista for infringement of the patent at the ITC. Arista, in turn, challenged the validity of the patent before the ITC and petitioned for inter partes review (IPR), which was instituted by the PTAB. Cisco argued, in both proceedings, that Arista was estopped from challenging the validity of the patent under the doctrine of assignor estoppel. Assignor estoppel is an equitable defense that prevents an assignor of a patent from later challenging the patent’s validity. The ITC applied the doctrine of assignor estoppel and prevented Arista from challenging the validity. However, the Board declined to apply the doctrine to Arista. It determined that equitable defenses, such as assignor estoppel, were not available to patent owners in IPRs.
On appeal, the Federal Circuit first confirmed that it had jurisdiction to consider the assignor estoppel issue. Applying Cuozzo Speed Technologies v. Lee, 136 S. Ct. 2131 (2016), and Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018), the court determined that those cases “strongly point[] toward unreviewability being limited to the Director’s determinations closely related to the preliminary patentability determination or the exercise of discretion not to institute.” Because the Court determined that the application of assignor estoppel is unrelated to either, it could hear Cisco’s appeal.
Turning to the merits, Cisco argued that assignor estoppel is a well-established common-law doctrine that should be presumed to apply unless a statute says otherwise. Arista, for its part, argued that 35 U.S.C. § 311(a) leaves no room for assignor estoppel in the IPR context because allows “a person who is not the owner of a patent” to file an IPR. The Court agreed with Arista. It evaluated Congressional intent as to whether assignor estoppel should apply in the context of IPRs and determined that the plain language of the statute controlled. The Court concluded that § 311(a), “by allowing ‘a person who is not the owner of a patent’ to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings.”
This case may foreclose future use of assignor estoppel as a defense in IPRs. But it also opens the door, following Wi-Fi One, for additional review of Board decisions that do implicate the preliminary patentability determination or the exercise of discretion not to institute.
