Supreme Court Upholds Doctrine of Assignor Estoppel

Review of Minerva Surgical, Inc. v. Hologic, Inc.

The patent at issue covered a device to treat abnormal uterine bleeding, wherein Novacept, Inc.’s founder, Csaba Truckai, introduced an applicator head to destroy targeted cells in the uterine lining. A key feature of the invention was the device’s ability to avoid unintended burning or ablation through the use of a “moisture permeable” head for conducting fluid out of the uterine cavity during treatment. Truckai’s invention, then known as the NovaSure System, was later approved by the FDA in 2001.

In 2004, Novacept, Inc., to which Truckai had previously assigned all interest in and to the above patent, sold all its assets to another company. Three years later, respondent Hologic, Inc. acquired all patent rights in the NovaSure System. The following year, Truckai introduced the Minerva Endometrial Ablation System, a supposedly improved device for treating abnormal uterine bleeding using a “moisture impermeable” applicator that, unlike its predecessor, did not remove any fluid during treatment. Thereafter, Hologic filed a continuation to the original application, drafting claims to encompass applicator heads generally. Following the issuance of the continuation, Hologic sued Minerva for patent infringement. Minerva countered the suit by claiming that Hologic’s new broad claim about applicator heads did not match the invention’s description which addressed water-permeability. Hologic subsequently invoked the doctrine of assignor estoppel, arguing that Truckai and Minerva could not impeach the continuation patent’s validity following their previous 2004 assignment of the original patent. The District Court and the Court of Appeals for the Federal Circuit agreed that assignor estoppel barred Minerva’s invalidity defense and that Minerva had infringed Hologic’s patent.

Justice Kagan Traces the Doctrine of Estoppel

Writing for the majority, Justice Kagan traced the rule back to the doctrine of estoppel by deed, wherein the conveyor of land was barred from later asserting that he had lacked good title at the time of sale. In today’s terms, assignor estoppel deprives an inventor from later challenging a patent’s validity after having made explicit or implicit representations that the assigned patent was not worthless at the time of its assignment. In other words, the inventor cannot make an about-face in asserting a patent’s validity when he has already asserted that patent’s validity to the assignee. The Court turned to its 1924 unanimous approval of the doctrine in Westinghouse v. Formica Insulation Co., 266 US 342 (1924), wherein the Court reasoned that the notion of fair dealing prevents one from such derogating from the previously assigned title.  Here, the Court rejected Minerva’s quest to abolish assignor estoppel and subsequently remanded the case, lamenting that the Federal Circuit had applied the doctrine too expansively. The majority emphasized the unfairness in an assignor’s later contradiction and attempt to profit doubly by gaining the price of an assignment and continued right to use the invention it covers. The Court then expounded on three situations in which a defendant is barred from asserting assignor estoppel.

Employer-Employee Intellectual Property Assignment Agreements 

In its first example, the Court references the common employment arrangement, wherein an employee assigns to his employer any patent rights to future inventions developed during his employment, and the employer later decides which, if any, of those inventions to patent. In this instance, the assignor-employee makes no representation as to a patent’s validity as the invention has not yet come into being.

Assignor Estoppel by Subsequent Legal Developments

A second situation in which an inventor may skirt assignor estoppel is when there is a later legal development that renders irrelevant the assignor’s warranty at the time of the assignment. In that instance, a patent’s validity at the time of assignment is later rendered invalid in light of the change law and an inventor may claim the patent invalid in light of the changed law without contradicting his earlier representation.

Assignor Estoppel for Patent Applications and Revised Claim Coverage

In its third example, the Court states that assignor estoppel can be removed when there is a change in patent claims, as was the case at hand. Turning again to Westinghouse, the Court explained that this is often the case when an inventor assigns a patent application rather than an issued patent, wherein the scope of the right conveyed in the assignment is “inchoate.” In this situation, the assignee owner of a patent application may subsequently enlarge the patent’s claims during the patent’s ongoing prosecution. Assuming the assignee’s new claims are materially broader than the application’s original claims, the assignor never warranted those new claims’ validity. Because no such representation had been made, the assignor is entitled to challenge the new claim in litigation as there is no inconsistency in his positions, and thus there is no estoppel.

Summary of Court's Ruling

Recognizing that the doctrine is not limitless, and in applying this third example, the Court remanded the case to the Federal Circuit, noting that if Hologic’s new claim is materially broader than that in Truckai’s patent, Truckai could never have warranted its validity in the assignment. Without such a prior inconsistent representation, there would be no basis for estoppel.