CAFC: Inability to Challenge Claims in District Court is No Impediment to PTAB Challenge

“The CAFC explained that the doctrine of assignor estoppel does not bar an assignor from filing a petition for IPR to challenge the validity of the assigned claims, even though such a challenge would have been estopped in a district court.”

We're Open: Inability to Challenge Claims in District Court No Impediment to PTABOn April 22, 2020, the U.S. Court of Appeals for the Federal Circuit (CAFC), in Hologic, Inc. v. Minerva Surgical, Inc., affirmed a decision of the  U.S. District Court for the District of Delaware holding that assignor estoppel did not bar an assignor from relying on a CAFC decision affirming a Patent Trial and Appeal Board (PTAB) decision invalidating asserted claims in an inter partes review (IPR) proceeding.  With respect to a second patent-in-suit, the CAFC affirmed the district court’s summary judgment that assignor estoppel barred the assignor from asserting invalidity of the assigned second patent in district court.

District Court and PTAB Proceedings

Mr. Csaba Truckai co-founded the company NovaCept, Inc., which was acquired by Cytic Corporation and, subsequently, by Hologic. Truckai was named as an inventor on the patents-in-suit, U.S. Patent No. 6,872,183 (the ‘183 patent) and U.S. Patent No. 9,095,348 (the ‘348 patent), which were directed to a method of detecting perforation in a uterus and a device for treating a uterus including eliminating the buildup of steam and liquid at an ablation site, respectively. While still undergoing prosecution, Truckai assigned his interests in the applications that lead to the ’183 and ’348 patents to NovaCept, now Hologic. Truckai later left NovaCept and founded Minerva, where he served as the President, CEO, and a member of the Board of Directors. Truckai and others at Minerva developed the Endometrial Ablation System (EAS), which was approved by the FDA for the same indication as Hologic’s system.

Hologic sued Minerva in district court for infringement of certain claims of the ’183 and ’348 patents. Inresponse, Minerva asserted invalidity for lack of enablement and failure to provide an adequate written description. In addition, Minerva filed IPR petitions with the PTAB challenging the patentability of the asserted claims in both the ‘183 patent and the ’348 patent. After instituting review of the ’183 patent, but denying review of the ’348 patent, the PTAB held that the ’183 patent claims unpatentable as obvious. Hologic appealed the Board’s decision to the CAFC, which affirmed the Board’s decision that the ’183 patent claims were invalid in Hologic, Inc. v. Minerva (Hologic).

Prior to the CAFC’s affirmance of the Board’s finding of invalidity, Hologic moved for summary judgment that the doctrine of assignor estoppel barred Minerva from challenging the validity of the ’183 and ’348 patent claims in district court. The district court found that Truckai was in privity with Minerva and “assignor estoppel applies to Minerva’s defenses to Hologic’s patent infringement claims” based, in part, on the undisputed evidence that Truckai’s “job responsibilities as Minerva’s President and CEO included bringing the accused product to market to directly compete with Hologic.” Thus, the district court granted summary judgment of no invalidity and of infringement of the asserted ’183 and ’348 patent claims. Following a jury trial, the district court entered judgment that Hologic was entitled to lost profits and royalties based on Minerva’s infringement of the ’183 and ’348 patent claims. After trial, Minerva moved for a permanent injunction, supplemental damages, enhanced damages, and ongoing royalties with respect to the ‘183 patent, but the district court denied the motions as moot based on the CAFC’s affirmance of the PTAB holding of invalidity. Both Hologic and Minerva appealed to the CAFC.


Assignor Estoppel Following PTAB and CAFC Decision

Referring to Diamond Scientific Co.v. Ambico, Inc., the CAFC defined assignor estoppel as “an equitable doctrine that prevents one who has assigned [or one in privity with an assignor] the rights to a patent (or patent application) from later contending that what was assigned is a nullity.” The CAFC further explained that four justifications have been identified for applying assignor estoppel: “(1) to prevent unfairness and injustice; to prevent one [from] benefiting from his own wrong; by analogy to estoppel by deed in real estate; and (4) by analogy to a landlord-tenant relationship.” The CAFC also noted that, although the doctrine prevents estopped parties from challenging the validity of the patent at issue in district court, those parties are still able to defend themselves against infringement actions in other ways such as by “arguing that the patentee is itself collaterally estopped from asserting a patent found invalid in a prior proceeding”, arguing for a narrow claim construction, and arguing “that the accused devices are within the prior art and therefore cannot infringe.”

While “mindful of the seeming unfairness to Hologic in this situation”, the CAFC concluded that assignor estoppel did not “preclude Minerva from relying on the Hologic decision to argue that the ’183 patent claims [were] void ab initio.” Citing Arista Networks, Inc. v. Cisco Sys., Inc., the CAFC explained that the doctrine of assignor estoppel does not bar an assignor from fling a petition for IPR to challenge the validity of the assigned claims, even though such a challenge would have been estopped in a district court. Noting that Minerva was able to “circumvent the assignor estoppel doctrine”, the CAFC nevertheless concluded that the decision in Hologic was dispositive of the invalidity of the ‘183 patent claims because the CAFC’s affirmance of the PTAB decision had an “immediate issue-preclusive effect on any pending or copending actions involving the [‘183] patent.” Thus, the CAFC held that the district court did not abuse its discretion in denying Hologic’s requested injunctive and monetary relief despite a finding of infringement.

Assignor Estoppel in District Court

The CAFC also considered whether the district court erred in holding that the doctrine of assignor estoppel precluded Minerva challenging the validity of the ’348 patent claims in district court. Initially, the court rejected Minerva’s urging to “abandon the doctrine” of assignor estoppel completely based on the Supreme Court’s decision in Lear, Inc. v. Adkins, which abolished the doctrine of licensee estoppel. The CAFC explained that Court’s precedent has “emphasized the continued vitality of the doctrine of assignor estoppel after Lear.”

Noting that the facts of the present case are similar to those in Diamond Scientific and other cases, wherein an “inventor executes broad assignments to his employer, leaves his employer, founds or takes on a controlling role at a competing company, and is directly involved in the alleged infringement”, the CAFC reasoned that the equities weigh in favor of the application of assignor estoppel in this case. The CAFC also rejected Minerva’s arguments that the claims of the ‘348 patent were broadened following the assignment by Truckai and it was unfair to block Minerva from challenging the breath of those claims. The CAFC explained that it is irrelevant whether an inventor’s patent application is still pending at the time of assignment. While Hologic may have broadened the claims after the assignment, as the CAFC pointed out, “the Supreme Court’s and [CAFC’s] precedents allow Minerva to ‘introduce evidence of prior art to narrow the scope of’ claim 1’”, thereby bringing Minerva’s accused product outside the scope of the asserted claim. Thus, the CAFC affirmed summary judgment of no invalidity as to the asserted claim of the ‘348 patent.

Additional Views Presented by Judge Stoll

Judge Stoll wrote separately to present additional views with respect to the doctrine of assignor estoppel. Stoll noted that this case highlights an “odd situation where an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office, but cannot do the same in district court.” Stoll noted that the Court’s precedent in Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792,803– 04 (Fed. Cir. 2018) held that the doctrine of assignor estoppel does not apply in the context of an inter partes review, while precedent such as Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1280–83 (Fed. Cir. 2017) continues to preclude assignors from challenging the validity of their assigned patents in district court. Thus, Stoll suggests that “it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office” in order to clarify this “odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding.”


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Join the Discussion

One comment so far.

  • [Avatar for Anon]
    April 28, 2020 10:47 am

    What I find decidedly odd is that Judge Stoll does not seem to realize the difference between an Article III court and a non-Article-III court along with the fact that Congress DID know the difference and explicitly crafted the AIA to provide a two-fora mechanism, with the first fora explicitly NOT bound by Article III concerns.

    In truth, there is nothing all that “odd and seemingly illogical” when one clearly sees what Congress has chosen to do.

    … I find it disappointing that this seeming lack of understanding is coming from the Chief Judge of the CAFC…

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