Alert
Alert
06.30.21
Introduction
In 1924, the U.S. Supreme Court recognized the doctrine of assignor estoppel in Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co. and that it was based upon a principle of fairness. The doctrine estopped assignors from challenging the validity of a patent they had assigned to another party.
Later cases touched on the doctrine but left it unchanged. The 1945 Supreme Court case of Scott Paper Co. v. Marcalus Mfg. Co. held that assignor estoppel did not prevent an assignor from arguing that the allegedly infringing device practiced prior art (i.e. an expired patent). In the 1969 case of Lear Inc. v. Adkins, the Supreme Court eliminated the related doctrine of licensee estoppel.
The Decision
In Minerva Surgical Inc. v. Hologic Inc., issued June 29, 2021, the Court reaffirmed assignor estoppel as a principle grounded in fairness and applied it to patent claims issuing after the assignment. A three-justice dissent, authored by Justice Barrett, argues that the 1952 Patent Act has no exception which allows the doctrine to be applied. Justice Alito dissented alone, believing that Westinghouse must be overruled before clarifying the doctrine. The Court has dimmed the lights on another bright-line rule in patent law.
The Court held that assignor estoppel applies when the assignor has made either explicit or implicit representations that conflict with the assignor’s invalidity defense. Applying this, the Court cited three examples: (1) an employee-inventor assigns their rights to any future inventions to the employer, but could not “possibly make a warranty of validity as to specific patent claims”; (2) a later legal development renders the warranty of invalidity given at the time of assignment irrelevant; and (3) “a post-assignment change in patent claims can remove the rationale for applying assignor estoppel.”
The third example revisits the question set out by Westinghouse regarding what is specifically being assigned. “Assignor estoppel applies when an invalidity defense in an infringement suit conflicts with an explicit or implicit representation made in assigning patent rights,” Justice Kagan wrote in the majority opinion. The lower courts now begin defining those “conflicts.”
Takeaways
Employment agreements and intellectual property assignments should be reviewed and likely updated. Patent owners and employers should ensure that explicit representations are and have been made when assigning past, current, and future patent rights. This will ensure assignor estoppel applies and protect their patents and claims. Inventors, on the other hand, must be mindful of what is being assigned and when.
Patent prosecutors should consider whether to use at least one broad independent claim in the first patent application filed. This is already useful in certain prosecution strategies, but doing so confirms that the assigning inventor is explicitly assigning narrower claims as well.
Finally, Minerva provides opportunities for those challenging validity, whether that is in infringement litigation or the analysis and valuation of patent portfolios. With a new opportunity to challenge validity, challengers may pursue inventors more aggressively.
We thank summer law clerk Jacob W. Young for his contribution to this alert.