Supreme Court Rules to Keep the Doctrine of Assignor Estoppel in Minerva v. Hologic
Written June 29, 2021
On June 29, 2021, the U.S. Supreme Court ruled to keep the doctrine of assignor estoppel, but with limits on its application. This ruling is consistent with the amicus brief filed by AIPLA on March 1, 2021. To read the opinion, please click here.
Minerva Surgical, Inc. was sued in November 2015 by Hologic, Inc. for patent infringement over two patents directed to "procedures and devices for endometrial ablation." The inventor, Csaba Truckai, co-founded Novacept, Inc. in the 1990’s and subsequently assigned his patent rights to the company. Novacept was later acquired by Cytyc Corp., with Hologic later acquiring Cytyc. As such, Hologic is the assignee of the two patents, selling the NovaSure system nationwide.
After leaving Novacept, Truckai founded Minerva Surgical, the accused infringer. Truckai and his team at Minerva then developed the accused infringing article, the Endometrial Ablation System (EAS), receiving FDA approval in 2015 for the same indication as the NovaSure system. Hologic promptly sued Minerva for the infringement of the ʼ183 and ʼ348 patents. Minerva, alleging the patents were invalid, filed IPRs challenging both patents. The assertion presented was that the patents were invalid due to lack of enablement and failure to provide an accurate written description.
In district court, Hologic requested summary judgement of no invalidity based on the doctrine of assignor estoppel, which bars a patent's seller (assignor) from challenging the patent's validity in patent infringement litigation. The motion was granted based on the inventor and his relationship to Minerva. The Court of Appeals then affirmed.
The Supreme Court granted certiorari following Minerva’s request, considering whether or not a defendant in a patent infringement action who assigned the patent, or is in privity with an assignor of the patent, could have a defense of invalidity heard on the merits.
OPINION OF THE COURT
In a 5-4 decision authored by Justice Kagan, the Supreme Court vacated and remanded the case back to the Federal Circuit ruling that “[a]ssignor estoppel is well grounded in centuries-old fairness principles … [b]ut assignor estoppel applies only when the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.” The Court found that the Federal Circuit was right to uphold the doctrine but failed to recognize the doctrine’s proper limits when its underlying principle of fair dealing comes into play.
The majority provided three examples of when the doctrine may not apply. First, in certain employment arrangements an employee may assign to their employer patent rights in future inventions. Second, a later legal development may render irrelevant the warranty given at the time of assignment. And third (most relevant in this case), a post-assignment change in patent claims can remove the rationale for applying assignor estoppel, such as when the assignor assigns a patent application, rather than an issued patent, with materially broader claims.
Given that the Federal Circuit deemed irrelevant whether Hologic had expanded the assigned claims, the Supreme Court vacated and remanded the case for consideration of whether Hologic’s new claims are materially broader than the ones Truckai had assigned.
Justice Barrett, joined by Justices Thomas and Gorsuch, dissented and opined that the Patent Act of 1952 failed to ratify the precedent of assignor estoppel established in Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U. S. 342 (1924), thereby abolishing the doctrine.
Justice Alito separately dissented based on the fact that neither the majority nor Barrett’s dissent addresses the question of whether Westinghouse should be relied upon as precedent or overruled, and therefore the writ was improperly granted.