Supreme Court: Assignor Estoppel Survives, But Only For Explicit Or Implicit Representations

• Published date: 24 January 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Manatt, Phelps & Phillips LLP
• Author: Mr Irah H. Donner

In Minerva Surgical, Inc. v. Hologic, Inc.,¹ the Supreme Court held, in a 5-4 opinion, that the doctrine of assignor estoppel continues to apply, but only for an assignor's invalidity assertion that contradicts explicit or implicit representations the assignor made when assigning the patent. The Court explained that the doctrine of assignor estoppel prevents the assignor from guaranteeing validity and later rescinding that guarantee.

Chief Justice John Roberts Jr. and Justices Stephen Breyer, Sonia Sotomayor and Brett Kavanaugh joined Justice Elena Kagan for the majority opinion. Justice Amy Coney Barrett, joined by Justices Clarence Thomas and Neil Gorsuch, dissented on the ground that the Patent Act of 1952 did not include the doctrine of assignor estoppel or any exception to any invalidity defenses when the inventor is the defendant. Barrett would have overturned prior precedent and rescinded the doctrine. Justice Samuel Alito dissented because the Court declined to decide whether to overrule the prior precedent that established the doctrine.

Specifically, the majority opinion upheld prior precedent on the doctrine of assignor estoppel:

Assignor estoppel, we now hold, is well grounded in centuries-old fairness principles, and the Federal Circuit was right to uphold it. But the court failed to recognize the doctrine's proper limits. The equitable basis of assignor estoppel defines its scope: The doctrine applies only when an inventor says one thing (explicitly or implicitly) in assigning a patent and the opposite in litigating against the patent's owner.²

The majority reasoned that the basis for the doctrine relates to unfair dealing:

When a person sells his patent rights, he makes an (at least) implicit representation to the buyer that the patent at issue is valid-that it will actually give the buyer his sought-for monopoly. In later raising an invalidity defense, the assignor disavows that implied warranty. And he does so in service of regaining access to the invention he has just sold . . By saying one thing and then saying another, the assignor wants to profit doubly-by gaining both the price of assigning the patent and the continued right to use the invention it covers. That course of conduct by the assignor strikes us, as it has struck courts for many a year, as unfair dealing-enough to outweigh any loss to the public from leaving an invalidity defense to someone other than the assignor.³

The Court also explained when the doctrine does not...