The U.S. Supreme Court’s June 29 decision in Minerva Surgical, Inc. v. Hologic, Inc. has important implications for inventors who assign patent rights, employers to whom employees assign patent rights, other assignees, and litigants in patent infringement suits involving patents in which rights were assigned. Historically, assignor estoppel barred assignors of patent rights from challenging the validity of the rights they assigned. In Minerva, the Supreme Court limited the doctrine of assignor estoppel to “when, and only when, the assignor’s claim of invalidity contradicts explicit or implicit representations [they] made in assigning the patent.”
The inventor in Minerva, Csaba Truckai, assigned his rights in a patent application to Novacept Inc., a company that Truckai cofounded, for a moisture-permeable applicator. Later Cytyc Corporation acquired Novacept, and subsequently Hologic acquired Cytyc. Truckai left Hologic and founded Minerva Surgical, where he developed a moisture-impermeable applicator, which Minerva began selling. Hologic added a claim to the patent application that Truckai had assigned to encompass applicators generally, without regard to whether they are moisture permeable. Hologic then sued Minerva for infringement of a patent that had issued from the altered patent application. Minerva sought to defend the suit by asserting that the patent claim for applicators generally was invalid as not supported by the written specification. Hologic argued that Truckai and Minerva were barred by assignor estoppel from challenging the validity of the patent. The district court agreed, holding that assignor estoppel barred Minerva’s invalidity defense. The Court of Appeals for the Federal Circuit affirmed on that ground.
After granting certiorari to review, the Supreme Court upheld the doctrine of assignor estoppel but found that the Federal Circuit failed to recognize the proper limits of the doctrine, which the Court stated are defined by its equitable basis. The Court proceeded to clarify the bounds of assignor estoppel. To summarize, assignor estoppel applies when representations made by an assignor are inconsistent with the assignor’s later challenge to a patent’s validity.
According to the Court, the assignor’s original warranty need not be express; the assignment of specific patent claims carries with it an implied assurance by the assignor of the claim’s validity.
For assignor estoppel to apply, there must be a contradiction between an assignor’s explicit or implicit warranty and a later challenge to a patent’s validity. The Court provided three examples of situations where assignor estoppel does not apply.
Of great relevance to employment agreements, the Court stated, “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.” An employee’s assignment to his employer of rights to any future inventions made during the course of employment cannot estop him from alleging a patent’s validity in later litigation. In that situation, an invention does not yet exist, so the assignment of the future invention contains no representation that a patent for the invention is valid. There being no representation of validity, alleging invalidity creates no conflict, and assignor estoppel does not apply to such assignments.
A second example of non-contradiction cited by the Court is where the law changes so that a patent that was valid at the time it was assigned is no longer valid. In that case also the Court said no estoppel bars the assignor from alleging a claim’s invalidity based on a change in the law. The assignor’s validity challenge is not inconsistent with any representation by the assignor.
The third example given by the Court where assignor estoppel does not apply is another post-assignment development—where a change is made to the claims after the assignment. Where the changed claims are materially broader than the claims that were assigned, the assignor did not warrant the validity of the new claims. This was the situation in Minerva. According to the Court, “[t]he limits of the assignor’s estoppel go only so far as, and not beyond, what he represented in assigning the patent application.”
In conclusion, the genesis of any assignor estoppel is an assignor’s explicit or implicit representation of a patent claim’s validity when an assignment of the patent claim is made. Absent a conflict with such an explicit or implicit representation by the assignor made in assigning patent rights, an invalidity defense likely raises no concern of fair dealing, and assignor estoppel will not apply.
