In Hologic, Inc. v. Minerva Surgical, Inc. (Fed. Cir. April 22, 2020), the Federal Circuit declined the “invitation to ‘abandon the doctrine’ of assignor estoppel” and, after concluding that the district court did not abuse its discretion in applying the doctrine, affirmed the district court’s grant of summary judgment of no invalidity.  Opinion at 16, 18.

The relevant facts are as follows. Csaba Truckai assigned his interest in the application to which the patent-in-suit claims priority (as well as all continuation applications) to NovaCept, Inc., a company that he co-founded. NovaCept was acquired by, and the patent rights were subsequently assigned to, Cytyc Corporation. Cytyc was later acquired by Hologic. Mr. Truckai eventually left NovaCept and founded Minerva, the accused infringer in this case. After Mr. Truckai’s departure from NovaCept, a continuation of the application Mr. Truckai had assigned to NovaCept was filed. The continuation application issued as the patent that is currently asserted by Hologic against Minerva. Minerva argued that Hologic broadened the claims after Mr. Truckai assigned the application and that the asserted claim is invalid for lack of enablement and failure to provide adequate written description.

In declining to abandon assignor estoppel, the Federal Circuit relied on its prior decisions in Diamond Scientific Co. v. Ambico, Inc. and Mentor Graphics Corporation v. EVE-USA, Inc., which determined that the Supreme Court’s decision in Lear, Inc. v. Adkins did not eliminate the doctrine of assignor estoppel. Opinion at 16 (stating that “[i]n EVE-USA, we noted that our Diamond Scientific decision ‘emphasized the continued vitality of the doctrine of assignor estoppel after Lear’”) (citations omitted). Based on the facts presented here, the Federal Circuit agreed with the district court that “the equities weigh in favor of” applying assignor estoppel where Mr. Truckai “executed a broad assignment of his patent rights to NovaCept and later sold NovaCept to Hologic’s predecessor for $325 million.” Opinion at 16, 17 (citation omitted). Additionally, the court noted that Mr. Truckai “founded Minerva” and “used his expertise to research, develop, test, manufacture, and obtain regulatory approval for” the accused product, which he then brought to market “to directly compete with Hologic.” Id.

Judge Stoll, who authored the majority opinion, presented additional views suggesting en banc consideration of assignor estoppel was appropriate where the current state of the law is such that “an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office, but cannot do the same in district court.” Additional views at 1 (citing Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792, 803–04 (Fed. Cir. 2018) (holding that assignor estoppel does not apply in inter partes review)).

On January 8, 2021, the Supreme Court granted Minerva’s Petition for a Writ of Certiorari on the question of “whether a defendant in a patent infringement action who assigned the patent, or is in privity with an assignor of the patent, may have a defense of invalidity heard on the merits.” The United States submitted a brief contending that the Supreme Court should not eliminate assignor estoppel, an equitable doctrine recognized for more than a century, but that courts should “apply assignor estoppel only where the assignor sells patent rights for valuable consideration in an arm’s-length transaction, then either contests the validity of a claim materially identical to a claim issued or pending at the time of the assignment, or otherwise contradicts pre-assignment representations about the patent’s validity.” Br. of United States as Amicus Curiae Supporting Neither Party at 10, 11. Its brief further argues that “assignor estoppel should not apply where the claim asserted to be invalid is broader than or otherwise different from the patent rights that were assigned.” Id. (emphasis in original). The Supreme Court heard argument on April 21, 2021.

Depending on how the Supreme Court decides the fate of assignor estoppel, attorneys may need to structure assignment agreements and employment agreements to consider the boundaries of the doctrine of assignor estoppel as further illuminated by the Supreme Court.