Supreme Court to Review Assignor Estoppel Doctrine

By on February 16, 2021
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Author: Lara Garner

Assignor estoppel bars the seller of a patent from later attacking the patent’s validity in patent infringement litigation. The doctrine seems commonsensical. One shouldn’t be able to sell a patent and then later turn around and claim that that patent is worthless. It would seem reasonable, then, that the assignor should also be barred from challenging the validity of the assigned patent at the USPTO in an inter partes review. Not so according to the Federal Circuit.

Last April, the Federal Circuit “grapple[d] with the doctrine of assignor estoppel” in Hologic, Inc. v. Minerva Surgical, Inc. and affirmed, seemingly reluctantly, the decision of U.S. District Court for the District of Delaware. The district court had held that the assignor of a patent was not barred by assignor estoppel from relying on a Patent Trial and Appeal Board (PTAB) decision, affirmed by the Federal Circuit, invalidating patent claims in a inter partes review. Also affirmed was the district court’s holding regarding a second patent that the assignor was barred from asserting invalidity of that patent’s claims in the district court.

The Patents and the Parties

Hologic sued Minerva for infringement of certain claims of its U.S. Patent Nos. 6,872,183 and 9,095,348. Hologic had acquired the patents indirectly from the founder of Minerva.

In the late 1990s, Csaba Truckai, a founder of the company NovaCept, with his design team at developed a medical device called the NovaSure system and patented the technology. Both the ’183 and ’348 patents list Mr. Truckai as an inventor and Mr. Truckai assigned his interest in the patents to NovaCept.

In 2004, Cytyc Corporation acquired NovaCept for $325 million and in 2007 Hologic acquired Cytyc. Mr. Truckai left NovaCept and, in 2008, founded a competing company, the accused infringer, Minerva.

In the District Court and the Patent Office

Hologic brought its infringement suit against Minerva in 2015. Minerva asserted invalidity defenses in district court and also filed petitions for IPR in the Patent Office challenging the validity of both patents. Review of the ’348 patent was denied but the Board instituted review of the ’183 patent and eventually held the ’183 patent claims unpatentable as obvious. Hologic appealed.

The district court denied Minerva’s request to dismiss Hologic’s claim for infringement of the ’183 patent as the Board’s finding was “on appeal and does not have preclusive effect as to this action unless and until the appeal is resolved.” But Hologic’s motion for summary judgment was granted, for both patents, that the doctrine of assignor estoppel barred Minerva from challenging their validity in district court. The case then proceeded to trial and the jury found for Hologic.

Subsequent to trial, the Federal Circuit affirmed the Board’s decision that the ’183 patent claims are invalid as obvious. In the interim, the ’3348 patent expired.

In deciding post-trial motions, the district court determined that the Federal Circuit’s decision did not affect the jury verdict because invalidity of the ’183 patent did not affect the finding of infringement as to the ’348 patent, and the jury’s damages determination was adequately supported by the finding of infringement of the ’348 patent. The district court further held that invalidation of the ’183 patent did not affect its findings of assignor estoppel on the ’348 patent.” But the court denied Hologic’s request for supplemental and enhanced damages, and ongoing royalties for infringement of the asserted ’183 patent claims as moot.

At the Federal Circuit

On Appeal Hologic argued that assignor estoppel precluded Minerva from relying on the Federal Circuit’s Hologic decision to escape liability for infringement. It contended that “the final outcome of the IPR is irrelevant to the district court proceeding” and that “[t]o hold otherwise would be to hold that the America Invents Act (‘AIA’) abrogated the assignor estoppel doctrine in a district court infringement action.”

The Federal Circuit examined its precedent and disagreed.

The Federal Circuit had first examined and affirmed the vitality of the doctrine of assignor estoppel in 1988, defining it as “an equitable doctrine that prevents one who has assigned the rights to a patent…from later contending that what was assigned is a nullity.” Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988). The Federal Circuit noted that, while early Supreme Court cases had carved out exceptions to the general assignor estoppel doctrine, the Court did not abolish the doctrine. And, while some courts had questioned the vitality of the doctrine following a Supreme Court’s decision abolishing licensee estoppel, the Federal Court noted an important distinction between assignors and licensees: Whereas a licensee might be forced to continue to pay for a potentially invalid patent, the assignor has already been fully paid for the patent rights.

Assignor estoppel, serves important purposes including: “(1) to prevent unfairness and injustice; (2) to prevent one [from] benefiting from his own wrong; (3) by analogy to estoppel by deed in real estate; and (4) by analogy to a landlord-tenant relationship.”

The doctrine has since continued to be applied in various circumstance, often with the primary stated purpose of the prevention of unfairness and injustice. That said, the Hologic court reasoned that there are limits to the doctrine, including that it does not preclude an estopped party from arguing that the patentee is itself collaterally estopped from asserting a patent found invalid in a prior proceeding.

Based on those limitations, and expressly notwithstanding the seeming unfairness, the Federal Circuit concluded that assignor estoppel did not preclude Minerva from relying on the IPR affirmance to argue that the ’183 patent claims are void ab initio.

But it wasn’t all good news for Minerva. The Federal Circuit rejected its assertion that its invalidity challenge should not have been precluded in the district court, including declining Minerva’s invitation to abandon the doctrine of assignor estoppel entirely.

The incongruity of the result was not lost on the Court. Judge Scholl, who authored the opinion, wrote separately in the decision to highlight this “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.” Judge Scholl concluded:

I suggest 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. We should seek 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.

Notwithstanding her suggestion, the Court denied en banc rehearing, the parties petitioned the Supreme Court, and last month the Supreme Court granted Minerva’s petition for certiorari on the question of: “Whether a defendant in a patent infringement action who assigned the patent, or is in privity with an assignor of the patent, may have a defense of invalidity heard on the merits.”

About the author: Lara Garner is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on Intellectual Property litigation and counseling for patents, copyrights, trademarks, and trade secrets, and in a broad range of matters, including contract, technology, and privacy issues. Ms. Garner’s biography can be found here.

Filed under Estoppel Doctrine, Patent, Patent Infringement, USPTO

Effective August 3, 2019, the U.S. Patent and Trademark Office Makes a Big Splash through the Adoption of its New Trademark Law Concerning Foreign Trademark Applicants in an Effort to Preserve and Protect the Trademark Registry

By on July 31, 2019
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Author: Gregory Brescia

On August 3, 2019, non-U.S. domiciliaries will require representation by a U.S. licensed patent lawyer for all matters related to trademark applications, registrations, and parties to Trademark Trial and Appeal Board Proceedings (collectively referred herein as, “foreign applicants”). See Federal Register – Trademark Laws as of August 3, 2019. In addition to the adoption of the above, the USPTO is requiring all U.S. licensed attorneys representing foreign trademark applicants to submit proof of their active state bar membership. The purpose of this recent adoption resonates from the USPTO’s efforts to (1) improve the quality of the federal trademark register; (2) stop the unlicensed practice of law before the USPTO; and (3) assist in regulatory compliance.

Many foreign applicants may ask: “how will this impact me?” Prior to the adoption of this new rule, foreign applicants had the ability to prosecute and handle all trademark-related matters on their own behalf. Of course, foreign applicants had the ability to retain foreign counsel as well, so long as certain requirements were met. With the adoption of this new rule, foreign applicants will be required to retain U.S. counsel to file applications, respond to office actions, correspond with examining attorneys at the USPTO, and handle post registration submissions.

The primary changes that foreign applicants will see through the adoption of this new rule include the following:

  1. New applications filed by foreign applicants on or before August 3, 2019 under Sections 1 or 44 of the Lanham Act must obtain U.S. counsel to prosecute a complete application from inception through maintenance.
  2. New applications filed by foreign applicants on or after August 3, 2019 under section 66(a) of the Lanham Act, a subsection of the Madrid Protocol, will not require U.S. counsel for the initial filing so long as prior to the publication, the foreign application submitted satisfies all formalities and statutory requirements. In the event the application does not meet all the formalities and statutory requirements, U.S. counsel is required.
  3. For applications filed by foreign applicants prior to August 3, 2019 that require further action, applicants must retain U.S. counsel to handle any actions, including post-registrations maintenance.
  4. Retaining U.S. counsel is not necessary for applications filed by foreign applicants prior to August 3, 2019; however, U.S. counsel must be retained for any subsequent actions.
  5. Retaining U.S. counsel is required for marks registered by foreign applicants prior to August 3, 2019 for handling any post registration actions, as well as any post registration maintenance on or after August 3, 2019.

As discussed above, the adoption and implementation of this new rule is cornerstone of the USPTO’s initiative to preserve and protect the quality of the U.S. Trademark Registry. We encourage foreign applicants to take these recent changes seriously as they can have a significant impact on the validity and their current and future U.S. trademark portfolios. Moving forward, Gordon Rees Scully Mansukhani’s Intellectual Property team will monitor the development and implications associated with the USPTO’s recent rule adoption. Should you have any questions, comments or concerns regarding the USPTO’s new rule, please feel free to contact our offices.

About the author: Gregory Brescia is a registered patent attorney and a member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on intellectual property prosecution and litigation. He also counsels clients on intellectual property enforcement and corporate transactions involving formation, compliance, and licensing. Mr. Brescia’s biography can be found here.

Filed under Foreign Trademark Registration, Trademark, USPTO

USPTO Practice Change Increases Fees for Multiple Reissue Patents and Allows for Refund of Surcharge Fees

By on June 6, 2018
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Author: Kimberley Chen Nobles

Managing a patent portfolio often includes payment of maintenance fees to keep patent rights in force. While patent owners are accustomed to the fee based system, the new practice can result in a significant increase in fees to maintain multiple reissue patents. In addition, patent owners may have an opportunity to recoup fees paid to the US Patent and Trademark Office (USPTO). Recognizing certain fees can assist with planning and portfolio management.

The USPTO recently issued a new practice and guidance for maintenance fees with respect to multiple reissue patents.1 2 Maintenance fees are costs associated with maintaining a patent after the patent is granted and are due for the 3rd, 7th, and 11th anniversaries of the patent grant. Failure to pay the requisite maintenance fee can lead to loss of patent rights. Managing the timing of maintenance fee payments can avoid surcharges associated with the maintenance fees.

The following is an outline of how to identify which matters the new practice applies to, how to comply with the new practice, and an exemplary scenario.

USPTO Practice for Maintenance Fee Payments (and Possible Refund!)

Effective January 16, 2018, each utility reissued patent requires its own maintenance fees. This new practice replaces the former practice of only requiring payment of one maintenance fee in the latest reissue patent. Patent owners may have to budget additional funds for maintaining any multiple reissue patents.

What is a multiple-reissue patent?

A reissue patent is a patent grant that is issued to correct an error in an earlier patent grant. In some cases, multiple reissue patents are granted. Prior to the new practice, patent owners were only required to pay maintenance fees in the latest reissue patent for a multiple reissue patent family. The USPTO may reissue a single original patent as multiple reissued patents (35 USC 251(b), 37 CFR 1.77).

Example: Original patent is issued → Patent Owner initiates a Reissue proceeding to correct a defect in the patent → Multiple reissue patents issued (e.g., Reissue Pat 1 and Reissue Pat 2)

When are the fees due?

Maintenance fees are paid in windows, either 6 months before a due date, or six months following the due date. Payments in the 6-month window following a dude date require payment of a surcharge. The due dates for each window are three years and six months (3 ½ years), seven years and six months (7 ½ years), and eleven years and six months (11 ½ years), with the due dates calculated from the original patent date.

In the current fee schedule, the 3rd, 7th, and 11th anniversary fees are $1,600, $3,600 and $7,400, respectively.

 

Maintenance Fee Guidance

  • Identify Multiple Reissue Patents, Pending Reissue Applications, and Original Patents
  • Identify Maintenance Fee Payment Dates/Payments
  • Flag/Set fee payments for Multiple Reissue Patents
  • Determine if fee payments are due/have been paid within the period of January 16, 2018 to July 16, 2018
  • Determine if refunds should be requested for surcharge payments

What about payments made prior to January 16, 2018?

The new practice applies to payments made for maintenance fees on or after January 16, 2018 even if prepaid. For reissue matters that may have already been paid, check payments made from July 17, 2017 to January 15, 2018 (for multiple reissue matters). If a payment has been made, a separate maintenance fee may be required in any earlier reissued patent(s) and original patent if there is a pending reissue application.

Payments Made in Original Patent?

The new practice changes the procedure for original patents that are the basis for reissue patents and the basis for reissued applications. Maintenance fees remain due in the original patent whenever an application for reissue of the original patent is pending on the maintenance fee due date.

Payments Made for Reissue Application about to Issue?

Maintenance fee must be paid for the original patent to maintain the last reissued patent even when the reissue patent is expected to issue within the grace period.

Example Scenario – Pending Reissue Patent

For a 7 ½ year maintenance fee due date is Feb. 27, 2018, the new practice applies. In the scenario below, two reissue patents and one pending reissue application exist due to a previous reissue application. As a result, Maintenance fees for the 7 ½ year payment (e.g., $3,600 per reissue/pending reissue) must be made in both reissue patents and the original patent.

 

Requesting Surcharge Refund

While the surcharge fee of $160 based on the current fee scale is a fraction of some of the maintenance fees, Patent owners can request a refund of the surcharge under 37 CFR 1.20(h) for payments made from January 17, 2018 to July 16, 2018. As mentioned above, the surcharge cannot be waived at the time of payment. Refund requests must be made by January 16, 2019.

1 Link to Official Notice: https://www.uspto.gov/sites/default/files/documents/reissue-mf-pay.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

2 Link to FAQs: https://www.uspto.gov/sites/default/files/documents/faqs-reissue-mf-pay.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

About the author: Kimberley Chen Nobles is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property practice group. She focuses her practice on representation of technology companies worldwide in transactional and litigation matters involving patents, trademarks, copyrights, and trade secrets.  Ms. Nobles’ biography can be found here.

Filed under Patent, USPTO

New Cancer Immunotherapy Pilot Program at the Patent Office

By on July 20, 2016
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The United States Patent and Trademark Office (“USPTO”) recently announced the “Cancer Immunotherapy Pilot Program,” (“CIPP”) which will provide FREE accelerated examination for cancer immunotherapy patent applications. i   The goal of the program is to complete examination of an application within 12 months of qualifying for the program. ii

To qualify for the program, the application must be a non-provisional, non-reissue utility application with at least one claim directed to a method of ameliorating, treating, or preventing malignancy in a human subject wherein the steps of the method assist or boost the immune system in eradicating cancerous cells.iii  The claims are limited to twenty claims with no more than three independent claims.  The request must be filed before the issuance of any Office Action (including those with just a restriction requirement) or with a request for continued examination.  The program is slated to end on June 29, 2017; however, it may be extended or added as a permanent program as we have seen happen with other pilot programs.iv

One practical benefit of using this program is the potential increase in patent term extension (“PTE”).v  PTE extends the term of a patent beyond the 20 year limit to compensate patent owners for lost patent term due to pre-market approval requirements before a regulatory agency.vi  PTE only applies to the time from when a patent issues to when regulatory approval is granted.  Thus, the earlier your patent issues, the more potential PTE.

Another practical benefit of using this program is the increased value that an issued patent brings to a potential investor.  Issued patents are a commodity that can be licensed, enforced, traded, or contributed to a patent pool.  Pending patent applications are not.  Having an issued patent within one year as opposed to the standard three to five years may make all the difference in the success of a start-up company.

If you would like more information on the Cancer Immunotherapy Pilot Program or patent term extension, please contact Kathryn Hull or Susan Meyer of the Intellectual Property Practice Group at Gordon Rees Scully Mansukhani.

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[i] See Federal Register notice on 6/29/2016 (https://www.federalregister.gov/articles/2016/06/29/2016-15533/cancer-immunotherapy-pilot-program#page-42328)

[ii] Examination is complete upon the issuance of a final Office Action or Notice of Allowance

[iii] For example, this can include the administration of cells, antibodies, proteins, or nucleic acids that invoke an active (or achieve a passive) immune response to destroy cancerous cells. The Pilot Program also will consider claims drawn to the co-administration of biological adjuvants (e.g., interleukins, cytokines, Bacillus Comette-Guerin, monophosphoryl lipid A, etc.) in combination with conventional therapies for treating cancer such as chemotherapy, radiation, or surgery. Claims to administering any vaccine that works by activating the immune system to prevent or destroy cancer cell growth are included. The Pilot Program also will consider in vivo, ex vivo, and adoptive immunotherapies, including those using autologous and/or heterologous cells or immortalized cell lines.

[iv] Pilot programs that have been extended or made permanent include the After Final Consideration program, the Patent Prosecution Highway program, the Quick Path Information Disclosure Statement program, and the First Action Interview program.

[v] 35 U.S.C. § 156

[vi] Agencies include the Food and Drug Administration and the U.S. Department of Agriculture

Filed under Patent, USPTO