SCOTUS to Decide Fate of Assignor Estoppel in Patent Cases

The U.S. Supreme Court is poised to decide the fate of the much-debated doctrine of assignor estoppel...

The U.S. Supreme Court is poised to decide the fate of the much-debated doctrine of assignor estoppel. The doctrine at the heart of Minerva Surgical Inc. v. Hologic Inc. prohibits inventors who sell their patent rights from challenging the patent’s validity in district court.

Facts of the Case

Hologic, Inc. and Cytyc Surgical Products, LLC (collectively, “Hologic”) sued Minerva Surgical, Inc. (“Minerva”) for infringement of certain claims of its U.S. Patent Nos. 6,872,183 and 9,095,348, which relate to procedures and devices for endometrial ablation. Both the ’183 and ’348 patents list Csaba Truckai as an inventor.

In August 1998, Mr. Truckai assigned his interest in U.S. Patent Application No. 09/103,072, an application from which the ’348 patent claims priority, as well as all continuation applications, to NovaCept, Inc., a company he co-founded. In February 2001, Truckai assigned his interest in U.S. Patent Application No. 09/710,102, an application from which the ’183 patent claims priority, as well as all continuation applications, to NovaCept.

In 2004, Cytyc Corporation acquired NovaCept for $325 million. NovaCept assigned its patent rights, including rights to continuation applications, to Cytyc. Hologic acquired Cytyc three years later and is the current assignee of the ’183 and ’348 patents. Truckai left NovaCept and, in 2008, founded Minerva. Minerva’s Endometrial Ablation System (EAS) is approved for the same indication as Hologic’s NovaSure system. 

In 2015, Hologic filed suit, alleging that Minerva’s EAS and the use thereof infringed certain claims of the ’183 and ’348 patents. Hologic moved for summary judgment, arguing that the doctrine of assignor estoppel barred Minerva from challenging the validity of the ’183 and ’348 patent claims in district court. The district court granted Hologic’s motion for both patents. After “[c]onsidering the balance of equities and the relationship of Minerva and Truckai,” the district court found that “Truckai is in privity with Minerva” and that “assignor estoppel applies to Minerva’s defenses to Hologic’s patent infringement claims.”  In addition, the district court granted summary judgment of no invalidity in Hologic’s favor and granted summary judgment of infringement of the asserted ’183 and ’348 patent claims.

While the district court proceedings were ongoing, Minerva also filed petitions for inter partes review (IPR), challenging the patentability of the asserted ’183 patent claims, as well as those of the ’348 patent, in view of prior art. The PTAB agreed with regard to one patent, holding the ’183 patent claims unpatentable as obvious. The Federal Circuit affirmed PTAB’s decision that the ’183 patent claims are invalid as obvious in Hologic, Inc. v. Minerva Surgical, Inc., 764 F. App’x 873 (Fed. Cir. 2019) (Hologic).

Given that PTAB invalidated the ’183 patent, the district court rejected Hologic’s request for a permanent injunction against Minerva as moot. However, the court left the damages award intact. On appeal, Hologic argued that assignor estoppel precludes Minerva from relying on the Hologic decision to avoid a permanent injunction. According to Hologic, “the final outcome of the IPR is irrelevant to the district court proceeding” and that “[t]o hold otherwise would be to hold that the America Invents Act (‘AIA’) abrogated the assignor estoppel doctrine in a district court infringement action.” 

Federal Circuit Decision

The U.S. Court of Appeals for the Federal Circuit affirmed. “Based on our precedent and the limits it places on the assignor estoppel doctrine, we conclude that assignor estoppel does not preclude Minerva from relying on the Hologic decision to argue that the ’183 patent claims are void ab initio,” the court wrote.

Nonetheless, the appeals court noted that it was “mindful of the seeming unfairness to Hologic in this situation.” As the panel explained, “Although Minerva would have been estopped from challenging the validity of the ’183 patent claims in district court, it was able to challenge their validity in an IPR proceeding and, hence, circumvent the assignor estoppel doctrine. Minerva had the right to do so under the AIA and this court’s precedent. This court has held that the doctrine of assignor estoppel does not bar an assignor from filing a petition for IPR.”

Judge Kara Stoll wrote separately to “highlight and question the peculiar circumstance created in this case by this court’s precedent, which the panel is bound to follow.” Judge Stoll also suggested that it was time to revisit assignor estoppel:

Given the odd circumstance created in this case, I suggest that it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office. We should seek to clarify this odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding.

The Federal Circuit denied en banc rehearing, and both parties petitioned the Supreme Court.

Question Before the Supreme Court

The Supreme Court granted certiorari on January 8, 2021. The justices have agreed to determine “whether a defendant in a patent infringement action who assigned the patent, or is in privity with an assignor of the patent, may have a defense of invalidity heard on the merits.” 

In its petition, Minerva calls on the Court to abolish the doctrine of assignor estoppel.  “Assignor estoppel undermines, rather than serves, patent law values,” its petition argues. “Nonetheless, the Federal Circuit not only has continued to apply this textually groundless doctrine, it has expanded it at every opportunity.” Minerva’s petition further argues that the Federal Circuit held in 908 F.3d 792,803– 04 (Fed. Cir. 2018) that assignor estoppel does not apply in inter partes review proceedings, leaving the court “at odds with itself.” Minerva’s petition also highlights that the Supreme Court has previously rejected “licensee estoppel in Lear, Inc. v. Adkins, 395 U.S. 653 (1969). Oral arguments have not yet been scheduled. Scarinci Hollenbeck’s intellectual property attorneys will continue to monitor the case and provide updates as they become available.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, David Einhorn, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.