July 1, 2021Client Alert

Supreme Court Put Limits on Assignor Estoppel

Minerva was the Roman goddess of, among other things, law. Fittingly, a recent Supreme Court decision bearing her name, Minerva Surgical Inc. v. Hologic Inc., will perhaps spawn more than a few lawsuits regarding patent assignments.

In Minerva, the Supreme Court pruned, but did not uproot, the doctrine of assignor estoppel. Assignor estoppel is based on an equitable notion that a party that transfers valuable patent rights to another party should not be allowed subsequently to assert that the patent embodying those valuable rights is invalid. Following a years-long trend, the Court’s decision in Minerva overturned the Federal Circuit’s bright-line rule that prevented assignors from challenging the validity of the assigned patent in a Federal District Court. In its place, the Supreme Court crafted a more flexible approach consistent with the doctrine’s equitable roots.

The beginnings of the dispute in Minerva arose in the late 1990s when inventor Csaba Truckai assigned his patent application – and any future continuation applications covering the invention – to his own company. The invention related to a device for treating abnormal uterine bleeding. Crucial to the subsequent litigation, the invention, as arguably envisioned by Mr. Truckai and described in the patents, used a “moisture permeable” application head.

Through subsequent transfers, in 2007, Hologic came to own the patents and patent applications. In 2008, Mr. Truckai founded Minerva Surgical where he invented a different device for treating abnormal uterine bleeding, which used a “moisture impermeable” application head.

Meanwhile, Hologic, like many patent owners, watched the marketplace and was aware of Minerva’s device. As is common, Hologic had kept “continuation” patent applications going to allow it to capture variations developed by competitors. Hologic used a continuation application to obtain a patent claim to a device without limitation as to moisture permeability. It then accused Minerva of infringing these claims.

Importantly, any claims in continuation applications must be supported by the original patent application. Minerva argued that the original application only envisioned a moisture permeable application head, and thus did not support a broader claim to a device with a generic application head. In other words, Minerva argued that Hologic’s patent claims to a generic application head were invalid. Hologic countered that Minerva was prevented from challenging the patent by the doctrine of assignor estoppel. The district court and Federal Circuit agreed with Hologic.

The Court reached a different conclusion. The Court refused to abolish assignor estoppel, but limited its scope. According to the Court, assignor estoppel “should apply only when its underlying principle of fair dealing comes into play,” such as in a true bait-and-switch scenario where the assignor contradicts earlier representations. The Court outlined three non-exclusive situations where estoppel might not apply because there is no contradiction:

  • When the assignment occurs before a patent application has even been drafted, such that the inventor cannot make a warranty of validity as to specific patent claims
  • When a change in the law “renders irrelevant the warranty given at the time of assignment”
  • When the claims in a patent application materially broaden after the assignment (corresponding to the fact pattern in Minerva)

The Supreme Court concluded that the Federal Circuit erred by failing to consider whether the later-filed claims were materially broader than those initially assigned by Mr. Truckai. Accordingly, the Court vacated the decision below and remanded for further proceedings. 

Each of the situations listed by the Court will doubtless spawn litigation at the margins, especially given the Court’s statement that estoppel will apply only when “the assignor’s claim of invalidity contradicts explicit or implicit representations . . . made in assigning the patent.” Slip Op., p.1 (emphasis added).

Brief takeaway: If possible, assignees should obtain representations of validity from an assignor for each patent claim that is – or may be – pursued, along with a covenant not to challenge the claim’s validity.

We will share more thoughts on the impact of Minerva in the coming weeks.

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