Minerva Surgical, Inc. v. Hologic, Inc., et al, No. 20-440 (S. Ct. June 29, 2021)

The Supreme Court issued a decision today upholding the validity of the doctrine of assignor estoppel and clarifying its proper limits. The Court held that the doctrine only applies when “the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.”

The invention at the core of this lawsuit is a device called the NovaSure System that is used to treat abnormal uterine bleeding. Csaba Truckai, the founder of the company Novacept, Inc., invented the device and filed a patent application, assigning his interest in the application to Novacept. The patent description emphasized the water-permeability of the device’s applicator heads that help to remove fluid during treatment. In 2007, Hologic, Inc. acquired the patent rights in the NovaSure System.

In 2008, inventor Truckai founded Minerva Surgical, Inc. and developed a “supposedly improved device” to treat abnormal uterine bleeding. Minerva’s device, unlike the NovaSure System, is “moisture impermeable” as it does not remove fluid during treatment. The PTO issued a patent for the device. In 2013, Hologic filed a continuation application requesting to add claims for its NovaSure System patent. “Aware of Truckai’s activities, Hologic drafted one of those claims to encompass applicator heads generally, without regard to whether they [were] moisture permeable.” The PTO issued the continuation patent with the requested alteration.

Shortly thereafter, Hologic sued Minerva for patent infringement. Minerva asserted that Hologic’s amended patent was invalid because “the new, broad claim about applicator heads [did] not match the invention’s description, which addresse[d] their water-permeability.” Hologic invoked the doctrine of assignor estoppel, arguing that Truckai, and therefore Minerva, could not attempt to impeach the patent’s validity because he filed and assigned the original patent application to Hologic’s predecessor. The district court agreed and held that the doctrine of assignor estoppel barred Minerva’s invalidity defense. The Federal Circuit upheld the judgment with respect to the doctrine of assignor estoppel. The Supreme Court granted certiorari to consider whether to uphold the doctrine of assignor estoppel, and if so, to determine the limitations of its use.

In the majority opinion, Justice Kagan, joined by Chief Justice Roberts and Justices Breyer, Sotomayor and Kavanaugh, concluded that the Federal Circuit was right to uphold the doctrine of assignor estoppel, but that “the court failed to recognize the doctrine’s proper limits.”

The Court first rejected Minerva’s three arguments challenging the continued validity of the doctrine. First, the Court held that the Patent Act of 1952 did not abrogate the doctrine of assignor estoppel, explaining that “Congress gave no indication of wanting to terminate or disturb” the well-settled common law doctrine. Second, the Court held that its prior, post-Westinghouse decisions, Scott Paper Co. v. Marcalus Mfg. Co. and Lear, Inc. v. Adkins, did not end assignor estoppel, but simply “policed the doctrine’s boundaries” by declining to apply estoppel doctrines in “novel and extreme circumstances.”  The Court emphasized that “Scott Paper and Lear left Westinghouse right about where they found it—as a bounded doctrine designed to prevent an inventor from first selling a patent and then contending that the thing sold is worthless.” And third, the Court rejected Minerva’s argument that “contemporary patent policy—specifically, the need to weed out bad patents—supports overthrowing assignor estoppel.” In doing so, the Court relied on principles of fairness, explaining that “[a]ssignor estoppel, like many estoppel rules, reflects a demand for consistency in dealing with others.”

The Court next clarified the proper limits on the doctrine of assignor estoppel. Relying on norms of equitable dealing, the Court explained that “[w]hat creates the unfairness is contradiction.” And where there is no contradiction, “there is no ground for applying assignor estoppel.” Thus, the Court held that “[a]ssignor estoppel applies when an invalidity defense in an infringement suit conflicts with an explicit or implicit representation made in assigning patent rights. But absent that kind of inconsistency, an invalidity defense raises no concern of fair dealing—so assignor estoppel has no place.”

Justice Alito filed a dissenting opinion arguing that the Court could not properly decide the questions presented in this case without first deciding whether to overrule Westinghouse. Justice Alito explained that “[b]ecause the majority and the principal dissent refuse[d] to decide whether Westinghouse should be overruled, I would dismiss the writ as improvidently granted.”

In the principal dissent, Justice Barrett, joined by Justices Thomas and Gorsuch, disagreed with the majority’s affirmance of the validity of the doctrine of assignor estoppel. In her opinion, the doctrine was abrogated by the Patent Act of 1952 because it was neither congressionally ratified nor well-settled common law in 1952.

The opinion can be found here.

By Annie White

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