This morning the Supreme Court issued its decision in Minerva Surgical, Inc. v. Hologic, Inc., a patent case reviewing the Federal Circuit’s approach to the doctrine of assignor estoppel. In a 5-4 split decision, the Court vacated and remanded the Federal Circuit’s judgment. In a majority opinion authored by Justice Kagan, the Supreme Court held that the Federal Circuit “was right to uphold” the doctrine but “failed to recognize the doctrine’s proper limits.” Here is a brief summary of the Court’s holding with quotations from Justice Kagan’s opinion as well as from dissenting opinions authored by Justices Alito and Barrett.
As mentioned, Justice Kagan authored the Court’s majority opinion, which Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh joined. In the opinion’s introduction, they summarize how in this case the Court declined to discard the doctrine of assignor estoppel, but also would act to clarify when it applies:
In Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U. S. 342, 349 (1924), this Court approved the “well settled” patent-law doctrine of “assignor estoppel.” That doctrine, rooted in an idea of fair dealing, limits an inventor’s ability to assign a patent to another for value and later contend in litigation that the patent is invalid. The question presented here is whether to discard this century-old form of estoppel. Continuing to see value in the doctrine, we decline to do so. But in upholding assignor estoppel, we clarify that it reaches only so far as the equitable principle long understood to lie at its core. The doctrine applies when, but only when, the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.
After rejecting arguments to discard the doctrine, the Court explains that the applicability of assignor estoppel turns on whether an assignor makes an explicit or implicit representation in conflict with an invalidity defense:
Assignor estoppel should apply only when its underlying principle of fair dealing comes into play. That principle, as explained above, demands consistency in representations about a patent’s validity: What creates the unfairness is contradiction. When an assignor warrants that a patent is valid, his later denial of validity breaches norms of equitable dealing. And the original warranty need not be express; as we have explained, the assignment of specific patent claims carries with it an implied assurance. . . . But when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in its assertion. And so there is no ground for applying assignor estoppel.
The Court also identifies how its approach to assignor estoppel differs from the Federal Circuit’s approach. According to the Court, the Federal Circuit wrongly declined to consider an alleged disparity between the scope of the claims as they existed at the time of the assignment and at the time of the invalidity defense. In short, if the claims were materially narrower at the time of the assignment and therefore materially broader at the time of the invalidity defense, there is no basis for the application of estoppel:
The Federal Circuit, in both its opinion below and prior decisions, has failed to recognize those boundaries. Minerva (recall, Truckai’s alter-ego) argued to the court that estoppel should not apply because it was challenging a claim that was materially broader than the ones Truckai had assigned. But the court declined to consider that alleged disparity. Citing circuit precedent, the court held it “irrelevant” whether Hologic had expanded the assigned claims: Even if so, Minerva could not contest the new claim’s validity. . . . For the reasons given above, that conclusion is wrong. If Hologic’s new claim is materially broader than the ones Truckai assigned, then Truckai could not have warranted its validity in making the assignment. And without such a prior inconsistent representation, there is no basis for estoppel.
In the end, the Court remanded the case for the Federal Circuit to consider the parties’ arguments concerning whether a challenged claim was made materially broader after the time of the assignment.
As mentioned, Justice Alito dissented. He would have dismissed the petition as improvidently granted:
In sum, I do not think we can decide the question that the petition in this case presents unless we decide whether Westinghouse should be overruled. Because the majority and the principal dissent refuse to decide whether Westinghouse should be overruled, I would dismiss the writ as improvidently granted. I therefore respectfully dissent.
Justice Barrett also dissented, and Justices Thomas and Gorsuch joined her dissenting opinion. Justice Barrett would have overruled and eliminated the doctrine of assignor estoppel. She would have done so based on the text of the patent statute, which indicates that invalidity is a defense to a charge of patent infringement and does not provide an exception for assignor estoppel, along with her view that Congress did not ratify the doctrine when it drafted the Patent Act of 1952. Here is the introduction to her opinion, which summarizes her view of the case:
The Patent Act of 1952 sets forth a comprehensive scheme for the creation and protection of patent rights. But it nowhere mentions the equitable doctrine of assignor estoppel, which precludes inventors who file patent applications from later saying that the patent is invalid. To the contrary, where the Act does address invalidity defenses, it states that invalidity “shall” be a defense “in any action involving the validity or infringement of a patent.” 35 U. S. C. §282(b). The text includes no exception for actions in which the inventor is the defendant.
So why the doctrine of assignor estoppel? Because in Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U. S. 342 (1924), we interpreted a predecessor statute, the Patent Act of 1870, to incorporate the doctrine. The question before us is whether the doctrine carried over into the Patent Act of 1952. That could have happened in one of two ways: (1) if Congress ratified Westinghouse when it reenacted the assignment provision in 1952, or (2) if assignor estoppel was part of the well-settled common-law backdrop against which Congress legislated in 1952. The Court opts for the second theory, but in my view, neither works.
We will post a more complete opinion summary later this week.