High Court to Review Whether Assignor Estoppel Prevents Assignor from Filing an IPR or Relying on a Prior Invalidity Decision

Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP

Last spring in Hologic, Inc. v. Minerva Surgical, Inc., the Federal Circuit ruled that the doctrine of assignor estoppel does not prevent an assignor from lodging a validity challenge of either patent in an IPR proceeding. In addition, the appellate court also ruled that assignor estoppel does not preclude the assignor from relying on a prior invalidity decision. Background and the details of the Federal Circuit’s decision can be reviewed here. Briefly, the appellate panel in the case found that an assignor could file an IPR and collaterally attack via IPR but upheld the doctrine of assignor estoppel in district court. 

After the Federal Circuit denied the parties’ requests for rehearing, both parties filed petitions for certiorari. Hologic petitioned the Supreme Court to consider whether an assignor of a patent may circumvent the doctrine of assignor estoppel by challenging the validity of the assigned patent in post-grant reviews before the U.S. Patent & Trademark Office (PTO), and then use the finding of invalidity to collaterally estop the assignee from relying on the patent in infringement litigation in district court. Minerva prompted the high court to do away with the doctrine of assignor estoppel altogether arguing that “[a]ssignor estoppel finds no support in the statute, this Court’s decisions, or the policies the Patent Act serves.” 

The Supreme Court granted Minerva’s petition late last week and has since denied Hologic’s petition. The question thus to be considered by the high court, as posed by Minerva, is 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. Hologic poses the issue in a different manner, i.e., whether the longstanding common-law doctrine of assignor estoppel should be abrogated. 

Regardless of the manner in which the question is posed, it is possible that the doctrine of assignor estoppel will soon suffer the same fate as licensee estoppel. Indeed, it may be that, similar to Lear v. Adkins when the Supreme Court eviscerated licensee estoppel for patents, the “important public interest” in removing invalid patents will be found to outweigh fairness and contractual obligation considerations. This would provide an assignor the ability to challenge a patent it sold in district court (along with the PTO). But, even assuming that assignor estoppel were to be left intact by the high court and the assignor’s only path to challenge the validity is before the PTO, purchasers of patents should negotiate for contractual safeguards in the purchase agreement that prevent or dissuade the assignor from making such a challenge. Moreover, the assignor’s ability to seek to eliminate the very patent rights it is selling should be factored into the purchase price.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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