Judge supports narrowly defined patent assignor forbidding estoppel
July 1, 2021
Supreme Court Tuesday Zoom out The estoppel principle of the patent assignor prohibits the inventor from assigning the patent to someone and then arguing that the patent is invalid in litigation. The court rejected the call to abandon the doctrine altogether by a 5 to 4 vote. But the court also rejected the extensive application of this theory by lower courts. Instead, the court clarified that the assignor’s prohibition of estoppel only applies to “the assignor’s invalid claim is in contradiction with the explicit or implied statement made at the time of the assignment of the patent”.
The ruling is in Minerva Surgical Inc. v. Hologic Inc. A dispute occurred when Hologic sued Minerva for infringing on its patent for a medical device for endometrial ablation. Minerva tried to argue that Hologic’s patent was invalid.
The lower court prevented Minerva from claiming invalidity because the founder of Minerva filed the original patent application and then sold the patent rights, which ultimately ended in Hologic. The lower court ruled that the founder’s initial transfer of patent rights prevented or “prevented” Minerva from questioning the validity. Minerva asked the Supreme Court to abolish the assignor’s prohibition of estoppel.
Judge Elana Kagan emphasized on behalf of the majority that the assignor’s prohibition of estoppel is rooted in the principle of fair dealing. When the inventor assigns a patent to a valuable patent and then turns around and claims that the patent is worthless, it can prevent a reversal. Kagan also relies on the long history of the doctrine, which can be traced back to England in the 18th century, and has been recognized by the Supreme Court for nearly a century.
Although the Patent Law did not stipulate that the assignor prohibits estoppel, the court rejected the claim that the Patent Law prohibits estoppel. Although the bill widely allows parties to claim invalidation defenses, Kagan pointed out that many other generally accepted principles of exclusion can also prevent invalid arguments without conflicting with the Patent Law.
But the court “restricted the transferor’s recognition of estoppel,” Kagan wrote. Although the inventor may not expressly or implicitly guarantee the validity of the patent and then denies its validity, not all arguments for invalidity conflict with the express or implied statement made at the time of assignment. In this regard, the court largely accepted the government’s middle ground in the Friends of the Court briefing. The government’s briefing urged the court to retain the assignor’s estoppel, but limit it to the “core of fairness.” In elaborating on this concept, Kagan wrote that the doctrine “only applies to the fairness principle that has long been considered its core.”
The court identified three “non-contradictory” examples to which the assignor’s estoppel should not apply. First, most settled the “co-employment arrangement”, that is, the employee assigns patent rights to the employer for “any future invention he develops during the employment arrangement”. Kagan wrote that the employee’s task “does not contain any statement that the patent is valid,” so the employee is still free to question the validity of any resulting patent. In one paragraph, Kagan eliminated the main criticism of the theory. In breaking through this limitation, Kagan cited an influential article by Mark Lemley, “Rethinking the transferor’s estoppel. “
The second example of the court involved changes in the law. If a previously valid patent is invalidated due to a legal change, “any principle of consistency will not prevent the assignor from saying this.”
Kagan then resolved the circumstances that might affect the outcome of the case. Here, the inventor (Minerva’s founder) has transferred the patent rights resulting from an application that is not yet mature as a published patent. The assignee changed the scope of application after the assignment. The court ruled that if the issued patent is “substantially broader” than the transferred right, then there is no inconsistency and therefore there is no estoppel.
The parties to this case have disagreements over whether the granted patent is actually broader in nature. In order to resolve this dispute, the court sent the case back to the lower court, which did not make a ruling on this issue.
When this case was reached, most people made it clear that they did not rely on following precedents, so they did not make a clear decision on whether to reject it Westinghouse Electric Manufacturing Co. v. Formica Insulation Co., In the 1924 decision, the Supreme Court for the first time acquiesced in the transferor’s prohibition of estoppel.
Justice Samuel Alito disagreed, criticizing most people for adopting “a blind text interpretation method that I cannot agree with.” Alito wrote: “[n]There is no word in the patent regulations that supports the assignor’s prohibition of estoppel,” and continues to criticize most people for avoiding its continued validity Westinghouse.
Justices Amy Connie Barrett, Clarence Thomas, and Neil Gossack also objected. Like Alito, Barrett’s premise is that the assignor’s prohibition of estoppel conflicts with the patent law text.Barrett rejected the argument approved by Congress Westinghouse In a statutory reenactment in 1952, it also rejected Congress’s argument that legislation was enacted in a common law background, including the estoppel prohibition by the assignor.