The U.S. Court of Appeals for the Federal Circuit affirmed that the doctrine of assignor estoppel does not provide a basis for federal jurisdiction.   Semiconductor Energy Labs Co. v. Nagata, Case No. 12-1245 (Fed. Cir., Feb. 11, 2013) (Lourie, J.). 

In an earlier suit by Semiconductor Energy Labs (SEL) against Samsung for patent infringement, one of the patent’s co-inventors, Nagata, testified for Samsung that the signatures on the declarations and assignments in the patent prosecution file were not his.  This raised issues of inequitable conduct and brought the enforceability of the patent into question.  SEL claims that this resulted in a less advantageous settlement for SEL.  SEL then sued Nagata in district court, claiming that Nagata’s repudiation of the signature was a violation of his duty under the doctrine of assignor estoppel, which prevents an assignor from challenging the validity of a patent they have assigned.

SEL sought a declaratory judgment that Nagata’s testimony was a “violation of federal patent law.”  SEL also sued on a number of state causes of action, claiming that their resolution depended on the federal question of assignor estoppel.  Upon motion by Nagata, the district court dismissed the case concluding that the doctrine of assignor estoppel did not provide a cause of action or state a claim arising under the patent laws.  SEL appealed.

The Federal Circuit affirmed, explaining that assignor estoppel simply prevents a patent assignor from attacking the validity of the patent when he is sued for infringement of that patent.  The Court stated that assignor estoppel is an affirmative defense to claims of invalidity when the assignee is a party to the suit, not a claim for relief on its own against a non-party who has made no claim or defense in a legal case.  Otherwise, assignor estoppel would prevent assignors from testifying as fact-witnesses even when not parties to the case – a proposition the Court has repeatedly rejected.

The Federal Circuit further agreed that the state claims were properly dismissed because they lacked a substantial federal claim or issue to support jurisdiction.  Similarly, the Court found that the district court was within its discretion to refuse supplemental jurisdiction since it had dismissed the claims over which it had original jurisdiction.  

Practice Note: This restrictive notion of “arising under” the patent laws as a basis for federal jurisdiction is consistent with the decision of the Supreme Court represented in Minton v. Gunn.