September 27, 2021

Volume XI, Number 270


September 24, 2021

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Doctrine of Assignor Estoppel to be Reviewed by U.S. Supreme Court

On January 8, 2021, the U.S. Supreme Court agreed to hear a case calling for it to abolish or limit the doctrine of assignor estoppel. See Minerva Surgical, Inc. v. Hologic, Inc., et al., No. 20-440, 2021 WL 77248 (U.S. Jan. 8, 2021). Mintz previously discussed the Federal Circuit’s decision, which found assignor estoppel to be applicable. The Federal Circuit’s decision highlighted discrepancies that exist in the application of assignor estoppel in district court cases and proceedings before the Patent Trial and Appeal Board (PTAB). The Supreme Court’s review should help resolve this discrepancy.

Assignor estoppel prevents an assignee who assigned his or her patent or patent application rights from later challenging the validity of the patent. Typically, it arises when an assignee sues the assignor or the assignor’s new company alleging patent infringement. In such a case, the assignor (and anyone in privity with the assignor) is estopped from raising patent invalidity as a defense in an infringement suit.

Proponents of assignor estoppel argue the doctrine prevents unfairness and injustice as it would be unfair to allow an assignor, such as an inventor, to assign patent rights (making a profit in doing so) and then turn around and claim what was divested to the assignee is actually invalid. See Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (1988).

Opponents of assignor estoppel argue the doctrine is outdated and shields bad patents from challenges by the very people who know the patent’s claims the best. Opponents also contend assignor estoppel restricts employee mobility because once an inventor moves to a new company or starts a new company, the new company faces a significant disadvantage if sued by the assignee as it cannot raise patent invalidity as a defense. As such, they argue assignor estoppel can disincentivize competitors from hiring inventor-assignors or even former employees who worked with an inventor-assignor (who may be in privity with the assignor) for fear they are a liability if patent infringement litigation ensues.

Furthermore, an assignee can invoke assignor estoppel in district court, but not in an inter partes review (IPR) at the PTAB. As such, the fate and validity of a patent in an assignee/assignor infringement case depends heavily on the forum in which the case is heard. Both sides in Minerva agree the Court should address this discrepancy. 

If the Court abolishes assignor estoppel this would allow assignors and their privies to challenge the validity of their assigned patent, either as an affirmative defense to a patent infringement action or to seek declaratory relief invalidating the patent altogether. The Court could also limit assignor estoppel to apply only to the assignor (rather than a wide range of parties in privity with the assignor) or to only apply to claims prosecuted by the inventor-assignor (rather than amended claims covering things the inventor never intended).

Consequently, if assignor estoppel is abolished or limited, a potential assignee will likely want to invest more in the due diligence phase, such as seek a patent validity opinion prior to acquiring a patent. A future assignee may also want to consider bargaining for stronger contractual language in assignment agreements, such as require the assignor to assist with any challenges to the patent’s validity. However, it remains unknown whether a court would enforce such contractual language.

Minerva’s brief was submitted this week on February 22, 2021, so the Court has yet to hear oral arguments. As the case progresses, stay tuned for what will hopefully be a clarifying decision on assignor estoppel.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 56

About this Author

Christina Sperry, Mintz Levin Law Firm, Boston, Medical Tech and Intellectual Property Law Attorney

Christina is an experienced patent attorney whose clients are focused in the medical technology space, from start-ups to large corporations and academic institutions. She advises on patent preparation and prosecution and provides opinions on infringement, validity, and right-to-use for clients in the US and internationally.

The areas of technology in which Christina is particularly focused include mechanical, electrical, and electro-mechanical technical fields such as medical and surgical instruments and devices including endoscopic, soft tissue...

Monique Winters Macek, Health, Medical Devices Lawyer, Mintz Levin, Patent Prosecution & Strategic Counseling Patent Opinions Patent Portfolio Strategy Patent Prosecution

Monique’s practice is focused on the areas of medical devices, systems, and methods.

Prior to joining Mintz Levin, Monique served as a patent agent for Grant Anderson, LLP; Tandem Diabetes Care, Inc.; and NuVasive, Inc. In these roles she participated in all aspects of patent applications and collaborated on patent strategy development and analysis. She has also worked as a patent agent and bio-mechanical engineer for Flex Partners, Inc. Her engineering work also revolved around medical devices such as cardiac ablation catheters, eye sensor...