“The NYIPLA believes that the court never considered whether the claims obtained by Hologic were an overreach and it did not address whether the issued claims correspond to what was actually conveyed by the assignor.”
Minerva Surgical, Inc. petitioned the Supreme Court of the United States (SCOTUS) in September 2020 to consider the question “whether a defendant in a patent infringement action who assigned the patent, or is [next in line] with an assignor of the patent, may have a defense of invalidity heard on the merits.” The petition was granted in January and additional amici have recently weighed in, including the New York Intellectual Property Law Association (NYIPLA).
Minerva is urging the Court to eliminate assignor estoppel because:
- the Patent Act’s text precludes assignor estoppel;
- SCOTUS has rulings that conform with abandoning assignor estoppel; Congress has never assumed assignor estoppel is part of the patent Act; and
- assignor estoppel thwarts federal patent policy.
Further, even if assignor estoppel survives, Minerva argues it should, at a minimum, be constrained because:
- assignor estoppel cannot protect patent claims issued after assignment;
- assignor estoppel cannot bar Section 112 defenses; and
- assignor estoppel cannot bar an assignor who made no representation about patent validity on which the assignee reasonably relied from challenging validity.
In the 1990s, Csaba Truckai invented a treatment of abnormal uterine bleeding (AUB) via endometrial ablation which destroys the endometrial lining of a woman’s uterus with the goal of stopping or significantly reducing bleeding. Importantly, Truckai’s system must be moisture permeable in order to function correctly. Roughly a decade later, Truckai invented a similar ablation system that was moisture-impermeable and plasma based. Truckai then assigned his business to Novacept, who prosecuted the first patent application for the permeable system. In 2004, Cytyc Corporation acquired Novacept’s assets, including its intellectual property and its device’s FDA approval. Hologic later acquired Cytyc in 2007. Before Hologic obtained the patent at issue, Cytyc and Hologic prosecuted additional patents which rely upon Truckai’s “moisture transport” specification. Every issued claim in those patents explicitly requires the applicator head to be moisture permeable.
In 2008, Truckai founded a new company, Minerva, to focus on turning his ideas into a new endometrial ablation device. The applicator head in Minerva’s second invention is not permeable to moisture and does not transport moisture out of the uterus. It is a sealed, highly-engineered silicone balloon filled with argon gas. When ionized, the gas turns into plasma. The plasma heats the silicone membrane from the inside, and thermal energy then ablates the surrounding tissue. Without an impermeable exterior, Minerva’s applicator head “simply would not work.” The argon gas “would escape into the uterine cavity” and “would be contaminated by moisture and thus could not be ignited” into plasma.
Then, for the first time, Hologic claimed an applicator head with no express permeability requirement and the U.S. Patent and Trademark Office (USPTO) issued U.S. Patent No. 9,095,348 (the ’348 patent) in August 2015. After the ’348 patent issued, Hologic sued seeking to enjoin Minerva from selling the moisture impermeable device. Hologic, over Minerva’s objection, obtained a broad construction of its claim language: the “applicator head” would cover not only moisture permeable devices capable of transporting moisture as the specification requires, but would also cover moisture impermeable applicator heads. In kind, Minerva asserted that the ’348 patent, construed to cover devices with moisture impermeable applicator heads, was invalid under 35 U.S.C. § 112 for lack of written description and enablement.
Hologic responded by asserting assignor estoppel. According to Hologic, Minerva could not argue that the ’348 patent is invalid because Minerva was in privity with Truckai, and no party in privity with Truckai could challenge the validity of any patent obtained from Truckai’s 1990s specification. The district court agreed with Hologic and concluded that assignor estoppel barred Minerva from asserting invalidity
Minerva appealed, urging the Federal Circuit to abandon assignor estoppel and arguing that, even if assignor estoppel were retained, the doctrine should not apply here. The Federal Circuit affirmed the district court’s ruling that assignor estoppel prevented Minerva from asserting any invalidity defense. The Federal Circuit parroted its prior reasoning that “it is the implicit representation by the assignor that the patent rights that he is assigning (presumably for value) are not worthless that sets the assignor apart from the rest of the world and can deprive him of the ability to challenge later the validity of the patent.”
A Matter of Equity
On February 25, the New York Intellectual Property Law Association (NYIPLA) filed an amicus brief in support of neither party in the case. The Association argues that, while assignor estoppel is vital in patent law today, the rigid application of assignor estoppel by the Federal Circuit is too strict. The NYIPLA urges the Court to clarify that “whether estoppel applies or not should be determined based on the specific facts of a given case as a matter of equity, with analysis as to what was assigned and what claims are ultimately asserted against the assignor.”
First, the NYIPLA argues simply that assignor estoppel is “premised on good faith” and “fair dealing in commercial transactions,” between assignor and assignee, and prevents the seller of a patent from saying that what was sold is “worthless.”
Constraint is Key
The NYIPLA suggests that the Federal Circuit has applied assignor estoppel as “a strict, bright-line rule.” Specifically, the Federal Circuit found it irrelevant that the patent asserted by Hologic against Minerva issued from an application filed long after the assignment of the invention, and that the assignor, had no involvement in the prosecution of Hologic’s patent application or with the claims that issued ten years after his assignment. The brief adds:
The court noted that Minerva argued “Hologic [was] deploying assignor estoppel to shield its unwarranted expansion of the patent’s scope from the invalidity arguments created by its own overreach” but found the argument unpersuasive since it applies assignor estoppel as a bar to all validity defenses in district court regardless of whether a patent application was pending at the time of the assignment and whether the claims were later amended by the assignee.
As such, the NYIPLA believes that the court never considered whether the claims obtained by Hologic were an overreach and it did not address whether the issued claims correspond to what was actually conveyed by the assignor. Instead, it applied “a per se bar to contesting validity, thereby precluding Minerva from arguing that the issued claims were invalid.”
“The Federal Circuit’s failure to consider these facts is out of step with the Court’s precedent and basic fairness,” says NYIPLA, and the “steadfast application of the doctrine as a per se rule” is counter to a “true balancing of the equities.”