Opinions / Supreme Court Activity

This past Tuesday, June 29, the Supreme Court decided Minerva Surgical, Inc. v. Hologic, Inc. In a five to four opinion, the Court upheld the doctrine of assignor estoppel but found that the Federal Circuit “failed to recognize the doctrine’s proper limits.” Justice Kagan authored the majority opinion, joined by Chief Justice Roberts and Justices Breyer, Kavanaugh, and Sotomayor. Justice Alito filed a dissenting opinion, as did Justice Barrett, who was joined by Justices Gorsuch and Thomas. Here is our summary of the Court’s opinions.

Justice Kagan’s Majority Opinion

The majority opinion began with the facts and procedural history that led to the central question: whether to discard the doctrine of assignor estoppel. To begin her analysis, Justice Kagan addressed courts’ traditional application of assignor estoppel “to deal with inconsistent representations about a patent’s validity.” She also explained the history of the doctrine, which began in England and later gained the Court’s unanimous approval in Westinghouse v. Formica. Justice Kagan then shifted to analyzing the scope of the doctrine, explaining briefly that “the Federal Circuit has applied the doctrine too expansively.” The opinion then addressed Minerva’s arguments.

First, the majority considered the argument that assignor estoppel is defunct “because Congress repudiated it in the Patent Act of 1952.” The majority rejected this position “because it would foreclose applying in patent cases a whole host of common-law preclusion doctrines—not just assignor estoppel, but equitable estoppel, collateral estoppel, res judicata, and law of the case.” The majority also rejected Minerva’s argument that post-Westinghouse precedent eliminated the doctrine. Then the majority explained:

Assignor estoppel was by 1952 just such a background principle of patent adjudication, and Congress gave no indication of wanting to terminate it or disturb its development. Nor has Congress done so since that time.

Justice Kagan also explained that two cases–Scott Paper Co. v. Marcalus Manufacturing Co. and Lear, Inc. v. Adkins–“retained assignor estoppel” but “police[d] the doctrine’s boundaries.” Kagan noted:

In sum, Scott Paper and Lear left Westinghouse right about where they found it—as a bounded doctrine designed to prevent an inventor from first selling a patent and then contending that the thing sold is worthless. Westinghouse saw that about-face as unfair; Scott Paper and Lear never questioned that view. At the same time, Westinghouse realized that assignor estoppel has limits: Even in approving the doctrine, the Court made clear that not every assignor defense in every case would fall within its scope. . . . Scott Paper and Lear adopted a similar stance.

Justice Kagan then addressed Minerva’s final argument: “that contemporary patent policy—specifically, the need to weed out bad patents—supports overthrowing assignor estoppel.” The Court rejected this argument based on assignor estoppel being rooted in the idea of fair dealing. The Court explained:

[W]e continue to think the core of assignor estoppel justified on the fairness grounds that courts
applying the doctrine have always given. Assignor estoppel, like many estoppel rules, reflects a demand for consistency in dealing with others.

It is also the principle of fair dealing that sets the boundaries for the doctrine, Justice Kagan explained. The majority stated that “[a]ssignor estoppel should apply only when its underlying principle of fair dealing comes into play.” Fair dealing, they continued, “demands consistency in representations about a patent’s validity.” Notably, the Court found that “[t]he Federal Circuit, in both its opinion below and prior decisions, has failed to recognize those boundaries.”

In summing up the majority opinion, Justice Kagan wrote:

This Court recognized assignor estoppel a century ago, and we reaffirm that judgment today. But as the Court recognized from the beginning, the doctrine is not limitless. Its boundaries reflect its equitable basis: to prevent an assignor from warranting one thing and later alleging another. Assignor estoppel applies when an invalidity defense in an infringement suit conflicts with an explicit or implicit representation made in assigning patent rights. But absent that kind of inconsistency, an invalidity defense raises no concern of fair dealing—so assignor estoppel has no place.

Justice Alito’s Dissent

Justice Alito’s dissenting opinion discussed his view that the question presented cannot be answered until the Court determines whether Westinghouse should be overruled, which, he said, neither the majority nor Justice Barrett’s dissent address. Therefore, he “would dismiss the writ as improvidently granted.”

Justice Barrett’s Dissent

Justice Barrett began her dissent by analyzing the Patent Act of 1952, stating that “it nowhere mentions the equitable doctrine of assignor estoppel.” She pointed out, moreover, that the Act does include a provision stating “that invalidity ‘shall’ be a defense ‘in any action involving the validity or infringement of a patent.'” In her view, the doctrine could only have been incorporated into the Act “(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.” According to Barrett, neither occurred and so there is nothing to save assignor estoppel as a valid doctrine.

Barrett first examined how Westinghouse construed “the assignment provision in the Patent Act of 1870” and concluded that the doctrine “was far from well settled in 1952.” Indeed, Barrett claimed that “it is difficult to describe Westinghouse itself as much more than a ‘mild endorsement of assignor estoppel.'”

Her dissent further argued that the Court’s approach to the doctrine is much narrower than Westinghouse, which describes the doctrine as prohibiting “[a]n assignor of a patent right” from attacking “the utility, novelty or validity of a patented invention which he has assigned or granted as against any one claiming the right under his assignment or grant.” Justice Barrett explained that the majority’s version of the doctrine “does not appear in Westinghouse—nor . . . in any other judicial decision,” and “if Congress truly had ratified Westinghouse, it would have endorsed the Westinghouse version.”

Justice Barrett also refuted the Court’s categorization of assignor estoppel with other preclusion doctrines. She claimed that “[t]he common-law pedigree of assignor estoppel differs markedly” and that the doctrine “is more recent and far shakier.” In short, she argued, assignor estoppel was not well-established at the time of the 1952 Patent Act, but rather that it “was in a confused state.”

In concluding her dissent, Justice Barrett wrote: “This case turns on whether the Patent Act of 1952 incorporates the doctrine, and because it does not, I respectfully dissent.”