In Minerva Surgical Inc. v. Hologic Inc. the Supreme Court ruled to limit the patent-law doctrine known as “assignor estoppel” which bars inventors who sell patent rights from later claiming they’re invalid as a defense to infringement claims, but declined to overturn it altogether.
Cynthia Laury Dahl, Practice Professor of Law and Director of the Detkin IP and Technology Legal Clinic provides comments on the ruling.
“Assignor estoppel prevents a potentially unfair “bait and switch” situation, where a patent holder first assigns their patent, but later undermines the value of the sale by attacking the patent’s validity. But on the other hand, an inventor is most often driven to mount such an attack when they are defending themselves after the assignee sues them for infringement. Cutting the inventor off from this defense of invalidity can act as a de facto noncompete agreement, preventing the inventor from working in their area of expertise. It also might unfairly shelter a patent that deserves to be invalidated.
In Minerva, a split Court (5-4) balanced the competing interests surrounding assignor estoppel by upholding the doctrine but narrowing it to avoid situations where its application would unfairly limit the inventor. However, the Court’s particular stated test is problematic in that it will make it very difficult for practitioners to draft effective assignments involving future rights, as so often is necessary with clients who are employers, including university technology transfer entities.
Under Minerva, the Court limits assignor estoppel to applications where “the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.” The limitation seeks to prevent assignor estoppel from applying in several cases where it would be unfair to the inventor, for example when the law changes or the inventor could not have possibly known the scope of the claims they were assigning. This could happen when an employee prospectively assigns all future inventions to their employer, when an inventor assigns a patent application that is later changed in prosecution, or as happened in Minerva, the employer files a continuation to the assigned patent after the inventor has left to start his own competing company.
The Court vacated and remanded the decision back to the Federal Circuit to determine to what extent the new continuation claim was broader than what the inventor had assigned. However, on the facts in Minerva, this is a problematic result. The Minerva inventor had explicitly assigned rights to his employer in not only the current patent application, but in all future continuation applications, seemingly meeting the fairness standard of the new Court test. Although the inventor did not know the contents of any future continuation claims, the inventor did specifically grant rights to the future continuation applications. Going forward, it may not be possible, or at least will be difficult to draft meaningful assignments involving rights to future claims without the threat of challenge. While the Court in Minerva has preserved the common law doctrine of assignor estoppel, the decision will impact practitioners as they strive to protect assignee clients from challenge from patent assignors, who may also be some of the most likely future patent infringers.”