shutterstock_1667502061_tada_images
Tada Images / Shutterstock.com
2 February 2021Big PharmaJeffrey D Morton, Zachary Schroeder and Ryan D Ricks

The importance of Minerva Surgical v Hologic

On January 8, 2021, the US Supreme Court agreed to hear Minerva Surgical v Hologic to consider whether an inventor or those in privity with the inventor may assert patent invalidity as a defence against a patent infringement suit for the inventor’s patent.

The doctrine at issue is known as “assignor estoppel” and provides protection to assignees in patent transactions.

This article will discuss: (i) the Minerva litigation; (ii) the importance of the court’s decision to hear the case; (iii) a review of case law and doctrine that may influence the court’s decision; and (iv) how the court’s decision could impact patent law and related transactions.

The Minerva litigation

In the 1990s, the inventor in this case, Csaba Truckai, was granted two patents for treating abnormal uterine bleeding (AUB). In 1998, Truckai assigned these patents, along with the right to continuation applications/patents, to Novacept. In 2004, Novacept was sold to Cytyc Corporation, which was subsequently acquired by Hologic.

In 2008, Truckai patented a new device to treat AUB. This patent was assigned to Minerva. Hologic sued Minerva, claiming that the new device infringed the Novacept patents that were acquired by Hologic. The district court ruled that Minerva could not argue patent invalidity because the assignor estoppel doctrine barred the inventor and Minerva from claiming patent invalidity (Hologic v Minerva Surgical, 325 F.3d 507, 524-25 [D Del 2018]).

The Court of Appeals for the Federal Circuit affirmed the earlier district court award of $4.8 million in damages. Judge Stoll of the Federal Circuit wrote separately in the decision highlighting a dichotomy within the assignor estoppel doctrine, explaining that a patent assignee is protected only partially under the doctrine because “an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent in the patent office, even while he cannot do the same in district court”.

Under this dichotomy, a patent grantee/assignor (and anyone in privity therewith) can challenge patent invalidity in an inter partes review hearing before the Patent Trial and Appeal Board but is not allowed to make the same invalidity arguments in a district court proceeding. Judge Stoll recommend the Federal Circuit consider the doctrine of assignor estoppel en banc, but the court ultimately denied en banc rehearing.

The importance of the court’s decision to hear Minerva

In deciding to hear the Minerva case, the Supreme Court will provide a ruling that could have far-reaching implications for inventors, assignees, assignors, and employers.

While it is somewhat premature to suggest how the court might ultimately rule, the court denied Hologic’s cross-petition to expand the assignor estoppel doctrine to cases before the US Patent and Trademark Office (USPTO); this may indicate the court’s initial inclination to discard the doctrine.

Here, the court granted certiorari only on the specific issue of whether the assignor estoppel doctrine bars assignors from challenging patent validity in federal district courts. Because this doctrine is not applicable before the USPTO, if the court agrees with Minerva’s argument, the assignor estoppel doctrine could be eliminated altogether.

Review of relevant case law/doctrine

The Supreme Court first endorsed the assignor estoppel doctrine in Westinghouse Elec & Mfr v Formica Insul, 266 US 342, 349 (1924) when it stated, “an assignor of a patent right is estopped to attack the utility, novelty or validity of a patented invention which he has assigned or granted as against any one [sic] claiming the right under his assignment or grant.”

In 1969, the court abolished the related “licensee estoppel” doctrine in Lear v Adkins, 395 US 653 (1969). This doctrine prevented a licensee of a patent from challenging its validity. The Lear court acknowledged the rationale of the doctrine by stating that “a licensee should not be permitted to enjoy the benefit afforded by the license while simultaneously urging that the patent which forms the basis of the license is void”.

However, the court ultimately held that the reasoning supporting this prohibition was outweighed by the public interest in eliminating invalid patents. If the court abolishes the assignor estoppel doctrine, it will likely look to Lear and this public interest argument in guiding its analysis.

It could also look to pre-Federal Circuit cases which either refused to apply the assignee estoppel doctrine or which rejected it altogether. These cases may provide the court ammunition for eliminating the assignor estoppel doctrine, or alternatively, they may be used as evidence which the Federal Circuit considered when electing to retain the doctrine.

The court could also limit application of the assignor estoppel doctrine. When submitting a patent application, every inventor must sign an oath stating that they believe themselves to be the original inventor or an original joint inventor.

By taking this oath, the inventor acknowledges the “duty to disclose to the Patent Office (the Office) all information known to the inventor to be material to patentability”. This duty to the Office exists until the application is withdrawn, abandoned, or a patent is issued. Accordingly, the court could consider enforcement of the doctrine only in cases where the inventor has violated this duty to the Office. This middle-of-the-road approach could serve as a deterrent against an inventor knowingly obtaining an invalid patent, profiting from the sale, and thereafter challenging the patent.

Impact on broader patent practice

If the court abolishes or substantially limits the assignor estoppel doctrine, it will likely affect the prices when, and the terms on which, patents are sold or transferred. An assignee who could previously rely on assignor estoppel may now view a patent as a riskier and thus less valuable asset, and consequently be willing only to pay a lower purchase price.

Additionally, the assignee may insist on a no-challenge/no-assistance limitation in the purchase agreement, giving the assignee a potential claim for breach even if the patent is ultimately invalidated. Addressing these complex issues at the agreement stage, rather than the litigation stage, could raise patent transaction costs or even lead to an impasse in negotiating the transaction.

Eliminating assignor estoppel could also affect the terms of inventor employment agreements, with companies finding no-challenge/no-assistance provisions desirable. Inventors are often on the cutting edge of technology in the field, giving them an advantage when pursuing arguments for invalidity. Because the inventor knew enough to obtain the patent, they will likely be well positioned to know of written materials or other public disclosures or sales that could invalidate or limit the patent.

However, even if the doctrine is eliminated or narrowed in scope, the potential effects may be moderated because an accused infringer has always had, and will continue to have, the option to pursue invalidity arguments at the USPTO.

Conclusion

The assignor estoppel doctrine protects assignees from patent invalidity challenges by the patent grantee and those in privity with the grantee. While it is unclear whether the Supreme Court will abolish or limit this doctrine, related doctrines, such as the licensee estoppel doctrine, have previously been eliminated.

If retained in whole, the patent landscape will remain essentially unchanged. If it is eliminated, prices and processes surrounding the acquisition of patents will likely be impacted.

However, eliminating the doctrine may foster free competition by removing bad patents, potentially eliminating a barrier faced by a new entrant into a competitive market.

The court could also limit the applicability of the assignor estoppel doctrine and resolve the present dichotomy between patent challenges before the USPTO and patent challenges before a district court. For example, the court could permit the assignor estoppel doctrine to apply only to invalidity arguments the inventor knew or should have known of at the time the inventor’s oath was taken, while allowing all other invalidity arguments.

As with all cases before the court, the issues are complex, but we expect oral arguments will shed light on the court’s inclination.

Jeffrey D Morton is a partner at Snell & Wilmer. He can be contacted at:  jmorton@swlaw.com

Zachary Schroeder is an IP litigation associate at Snell & Wilmer. He can be contacted at:  zschroeder@swlaw.com

Ryan D Ricks is a partner at Snell & Wilmer. He can be contacted at:  rricks@swlaw.com


More on this story

Americas
29 June 2021   The US Supreme Court has upheld the doctrine of assignor estoppel in a dispute between Minerva and Hologic but has narrowed its scope.
Big Pharma
1 July 2021   The US Supreme Court opinion in Minverva v Hologic means that inventors will now have a far narrower scope to be able to challenge the validity of their own patents in defence proceedings—a decision that was controversial among the judges.
Medtech
12 August 2022   Hologic patent invented by Minerva’s founder cannot be invalidated | Patent in dispute concerns device used to treat uterine bleeding | US Court of Appeals.

More on this story

Americas
29 June 2021   The US Supreme Court has upheld the doctrine of assignor estoppel in a dispute between Minerva and Hologic but has narrowed its scope.
Big Pharma
1 July 2021   The US Supreme Court opinion in Minverva v Hologic means that inventors will now have a far narrower scope to be able to challenge the validity of their own patents in defence proceedings—a decision that was controversial among the judges.
Medtech
12 August 2022   Hologic patent invented by Minerva’s founder cannot be invalidated | Patent in dispute concerns device used to treat uterine bleeding | US Court of Appeals.