“You Can’t Challenge This (Unless)”—SCOTUS Upholds But Limits 140-Year-Old Doctrine Of Assignor Estoppel

McCarter & English, LLP

McCarter & English, LLP

The doctrine of assignor estoppel bars an inventor who assigns a patent to a third party from later arguing that the assigned patent is invalid. The Supreme Court has now upheld this doctrine but has limited its scope, holding that it applies only to explicit or implicit representations made by the assignor.

In Minerva Surgical Inc. v. Hologic Inc., the inventor, Truckai, assigned his patent to another company. Hologic later acquired the company and its patents. Truckai wasn’t quite done with the invention and operated under another company named Minerva. Hologic broadened the patent claims and filed an infringement suit against Minerva. Minerva (Truckai) argued that the patent was invalid, and Hologic claimed assignor estoppel. The district court and appeals court upheld the doctrine of assignor estoppel and stated that the expansion of patent claims was “irrelevant” to the application of assignor estoppel against Minerva. Minerva appealed to the Supreme Court and sought elimination of the doctrine. The Supreme Court, however, upheld the doctrine but limited its application.

In a 5-4 ruling authored by Justice Kagan, the Supreme Court held that assignor estoppel should be limited to claims of invalidity that “contradict explicit or implicit representations made by the assignor when assigning the patent.” The Court clarified that broad employment contracts assigning future patent rights would not be protected by the doctrine because the assignors themselves would not know the scope of the patent at that point. The doctrine also wouldn’t apply in cases where the law itself changes in such a way that warranties made in the assignment would be defeated. The Court held that assignor estoppel may not apply to “materially broad” changes made to the patent after assignment. The case was sent back to the lower court to decide whether the new claims are materially broad.

Patent owners can rejoice that the majority decided to uphold the doctrine because this doctrine protects their patents from being challenged by the original inventor/assignor in infringement actions. But because this doctrine may not protect material changes, patent owners should exercise caution when deciding to expand the scope of their patent claims. Furthermore, the company receiving the assignment of the patent may want to take more care in drafting assignment documents to cover more possibilities about the scope of the assigned patents as a way to make the inventors’ representations and warranties as to validity more inclusive. Whether more careful drafting of assignment documents can mitigate the risks that assignor estoppel will not apply is, however, a topic for another day.

The case is Minerva Surgical Inc. v. Hologic Inc., Case No. 20-440 (U.S., June 29, 2021).

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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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