On Wednesday, the Supreme Court will hear oral arguments in Minerva Surgical, Inc. v. Hologic, Inc., the case that is predicted to determine the fate of the assignor estoppel doctrine. Specifically, the question presented to the Court is: “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.” This is our argument preview.
In its opening merits brief, Minerva begins with the strong assertion that the assignor estoppel doctrine is an “uncommonly lawless doctrine” with “no textual support in the Patent Act.” Minerva then dedicates the first half of its brief to its arguments for why assignor estoppel should be eliminated and the second half to its alternative argument that if assignor estoppel survives, the Court should tightly constrain it.
Minerva centers its first argument against survival of assignor estoppel on the assertion that the doctrine “has never enjoyed any sound basis in the statue, this Court’s decisions, or public policy.” According to Minerva,
Lower courts, not this Court or Congress, read assignor estoppel into the Patent Act. And this Court has never applied it. To the contrary, this Court’s decisions so undermined the rationale for the doctrine that—long before the Federal Circuit resurrected it—courts (including this Court) and commentators (including scholars testifying before Congress) had concluded that the doctrine was dead. To abandon it today would merely state out loud what has long been true. . . . Finally, assignor estoppel has never served the policies of patent law. To the contrary, it stands opposed to the critical policy that issued patents be subject to invalidity challenges.
Minerva then transitions to discuss its alternative argument—if the Court decides to read assignor estoppel into the Patent Act, it should substantially constrain it. To support this argument, Minerva suggests three limitations it contends would “respect” the doctrine’s common-law origins. First, Minerva proposes that “assignor estoppel should not prevent invalidity challenges to patent claims issued after the assignment.” According to Minerva, “[p]roviding assignees with the power to seek additional patent claims and then assert them against new inventions by assignors, free of the obligation to defend against invalidity challenges, perverts the doctrine into a sword to frustrate legitimate competition.” Second, Minerva suggests that “assignor estoppel should never bar invalidity defenses based on the specification’s lack of written description and enablement. Such arguments depend on facts available to the assignee at the time of the assignment, so the assignee cannot have reasonably relied on any supposed representation regarding the specification’s adequacy.” And lastly, Minerva proposes that “if the doctrine is to have any legal foundation, the assignee should have to establish that it reasonably relied on some representation regarding validity. That requirement is the basis of estoppel by deed.”
In its response on the merits, Hologic argues two main points—that the Court should not eliminate assignor estoppel and should not narrow the traditional scope of the doctrine. Directly contrary to Minerva’s assertions, Hologic claims that
[e]liminating assignor estoppel would require overriding both Congress and this Court’s own precedent. . . . Notably, not a single amicus meaningfully argues for eliminating the doctrine entirely. Minerva offers scant support for ripping away layer upon layer of settled law. Its textual argument rests on statutory language that is not new but has coexisted with assignor estoppel all along, and in any event says nothing to contradict the doctrine. . . . Minerva and several amici offer a menu of “options” to amend the doctrine. [] But selecting among competing policy proposals is a project better suited for Congress, especially when the proposals on the table are all riddled with doctrinal and practical problems. American courts have long recognized the value of assignor estoppel in promoting innovation, facilitating patent sales, and keeping inventors honest. For decades, millions of patents have been sold on the assumption that the doctrine applies. Minerva seeks to unsettle that consensus, those reliance interests, and any hope of clear assignment rules for years to come. This Court should decline its invitation.
In support of the Court preserving the assignor estoppel doctrine, Hologic first contends that “the Court upheld the doctrine a century ago and Congress later ratified it.” Specifically, Hologic cites to the Supreme Court case Westinghouse and asserts that “this Court held that Congress manifestly intended to incorporate assignor estoppel into the provision of the patent laws.” And in with regard to Congressional action, Hologic specifically asserts that “Congress incorporated both Westinghouse’s interpretation and the continued lower-court consensus when it reenacted the assignment provision in 1952 without material change.” Moreover, according to Hologic, “stare decisis independently precludes abrogating assignor estoppel. . . . Overruling Westinghouse would require an especially compelling justification, as its statutory construction has not been altered by Congress and involves property and contract rights. Minerva offers no valid justification for overturning Westinghouse. Minerva’s invocation of this Court’s other caselaw is uncompelling; its attacks on Westinghouse’s reasoning fall flat; and its policy concerns are both mistaken and directed to the wrong branch of government.”
Hologic then turns to its second argument—the Court should not narrow the traditional scope of the assignor estoppel doctrine—and directly addresses Minerva’s suggested limitations. Hologic contends
Minerva proposes limiting the doctrine to issued patents. But Westinghouse rejected that limitation, which in any event conflicts with both common sense and commercial expectations. . . . Minerva next argues that assignor estoppel should not apply to invalidity arguments under § 112. That argument is waived, and on the merits, it is impossible to justify treating § 112 arguments differently from other invalidity challenges. Finally, Minerva argues that no estoppel should apply absent an express representation of validity by the assignor and reasonable reliance by the assignee. But as Minerva tacitly admits, that is just a thinly veiled attempt to abrogate the doctrine that fails for all the same reasons.
In its reply brief, Minerva confronts Hologic’s contention that this Court affirmed assignor estoppel in the Westinghouse case by arguing that the Court in Lear “already determined that, by 1952, assignor estoppel ‘could no longer be considered the “general rule.”’” Minerva further contends that
Hologic’s argument thus rests on an unsound foundation. Congress cannot have silently adopted a doctrine that was, at best, in evident decline by 1952. Assignor estoppel has never been the kind of settled common-law doctrine that Congress can be thought to assume applies in patent cases. And stare decisis cannot be used to save a doctrine this Court has never applied but only limited, including in Formica.
Interested parties have submitted numerous amicus briefs to present their perspectives and arguments on the issues in this case. Notably, many of the amici urge the Court to set forth a concise interpretation of the assignor estoppel doctrine rather than eliminate it entirely. Particularly significant are the briefs from the American Intellectual Property Law Association (AIPLA), the United States government, and a group of IP law professors.
In the AIPLA’s amicus brief, filed in support if neither party, it argues that the Court should uphold the doctrine of assignor estoppel, while also acknowledging that “the doctrine may be inapplicable in cases where an inventor could not have known of the patent rights being asserted, as discussed in Westinghouse.” The AIPLA persuasively writes that “[a]bolishing assignor estoppel could be profound. From employment agreements with patent assignment provisions to corporate transactions with transfers of patented technology, many patent owners would face a cloud of uncertainty regarding their assigned patents. Assignor estoppel has not been challenged in this Court since Westinghouse because the doctrine has worked effectively for well over the last century.”
Next, in its amicus brief likewise supporting neither party, the government argues that “[t]he appropriate solution is not to abolish assignor estoppel, which was a background equitable principle against which Congress enacted the Patent Act of 1952 []. Instead, this Court should cabin the doctrine to its equitable core. Courts should apply assignor estoppel only where (1) an inventor sells patent rights for valuable consideration in an arm’s-length transaction, then later contends that a patent claim is invalid; and (2) either the contested claim is materially identical to a claim issued or pending at the time of the relevant assignment, or the assignor’s invalidity defense otherwise contradicts earlier representations pertaining to the validity of the claim.”
And lastly, the group of IP professors filed their amicus brief in support of Minerva, taking that position that “[t]his Court should reject the Federal Circuit’s expansive application of assignor estoppel—in this case and in general. If it does not eliminate assignor estoppel entirely, the Court should explicitly limit the doctrine to its narrow roots.”
We will continue to follow this case. After Wednesday’s argument, we will post an argument recap. As always, you can find all of the relevant documents and all of our coverage of the case on our “Supreme Court Cases” page.