Good morning! Will Milliken here. I’m a director in Sterne Kessler’s Trial and Appeals Group. I’ll be live-tweeting today’s #SCOTUS arguments in #Minerva v. Hologic, which involves everyone’s favorite* patent-law doctrine, assignor estoppel.
*ymmv
#AppellateTwitter 1/
*ymmv
#AppellateTwitter 1/
If you joined us last month for Sterne Kessler’s inaugural SCOTUS-argument live-tweet for the #Arthrex case, welcome back!
https://twitter.com/SterneKessler/status/1366395640926924804?s=202/
Assignor Estoppel—a lesser-known Estoppel Brother, having failed to achieve the 1L-curriculum prominence of Collateral and Promissory—is an equitable doctrine that prohibits the assignor of a patent or its privies from later challenging the patent’s validity in court. #Minerva 4/
Today #SCOTUS will be hearing argument on whether to uphold the assignor estoppel, narrow its application, or get rid of it entirely. 5/
Before we get to the merits, a couple of disclaimers (I am a lawyer, after all): First, these tweets are intended to convey general information only, and should not be construed as a legal opinion or as legal advice. 6/
Second, all trenchant observations and insightful commentary are attributable to the firm; any inaccuracies, dumb comments, glaring typos, or bad jokes (cf. #4 above) are attributable solely to me personally. #AppellateTwitter #SCOTUS #Minerva 7/
If you’d like to listen to the arguments in real time, you can access a live stream from most any major news outlet. I will be listening via CSPAN: c-span.org/video/?510031-… 8/
The Minerva arguments are up second this morning, so they’ll begin following the conclusion of the argument that is currently in progress. #AppellateTwitter #SCOTUS #Minerva 9/
It’s worth noting that we have the pandemic to thank for being able to listen to #SCOTUS arguments live (and being able to live-tweet them!). When the Court moved from in-person arguments to telephonic ones, it made live audio available for the first time. 10/
As a reminder, in the telephonic format, the #SCOTUS Justices ask questions one at a time, in order of seniority, starting with the Chief Justice and ending with Justice Barrett. 11/
In-person #SCOTUS arguments were basically a free-for-all: anyone could ask a question at any time. 12/
Most people view the new format as having both pros and cons. 13/
Pros: all nine #SCOTUS Justices are likely to ask questions. This can provide a better indication of where the Court as a whole is leaning in a given case. And some of the Justices who were quiet in the in-person format (*ahem* Justice Thomas) ask good/illuminating questions. 14/
Cons: this format makes it harder for argument to function as a conversation among the Justices facilitated by the attorneys, which many experienced advocates say is the highest purpose of a #SCOTUS oral argument. 15/
Assignor estoppel, generally speaking, prohibits one who assigns a patent/patent application, or one in privity with him/her, from later attacking the validity the patent (or the patents stemming from the application) in court. (It does not apply at the PTAB.) #Minerva 17/
So what does that mean in practice? If I get a #patent and then sell it to you, I can’t later start infringing the patent and claim I’m not liable because the patent I sold you is actually invalid. 18/
The doctrine arose by analogy to the common-law doctrine of estoppel by deed (a real deep-cut estoppel doctrine), according to which I can’t sell you a piece of property and then later claim the deed I sold you doesn’t actually give you valid title to the land. 19/
Seems a reasonable enough rule, right? 20/
In practice, though, the situations where assignor estoppel applies can be a lot more complicated and the equities a lot more debatable. 21/
Take the facts of #Minerva, which I will briefly recount both because they illustrate this point and because they are likely to come up at the argument. 22/
Csaba Truckai invented and patented a medical device called the NovaSure for use in endometrial ablation. #AppellateTwitter #SCOTUS #Minerva 23/
The NovaSure had a moisture-permeable applicator head. But there is some dispute as to whether the patent application Truckai filed was LIMITED to devices with moisture-permeable applicator heads. (This becomes important later.) 24/
On one hand, that’s all the application talks about. On the other hand, one of the original #patent claims in the application (which was later cancelled) was broad enough to cover a device with a moisture-IMPERMEABLE applicator head. 25/
Truckai’s patent and the NovaSure system were eventually sold through a series of transactions to Hologic. Truckai made about $8 million off the sale. The NovaSure is still used today. 26/
Truckai later founded #Minerva and developed a new device—the EAS—that is similar to the NovaSure in some respects but that uses a moisture-impermeable applicator head. 27/
Hologic then filed a continuation of Truckai’s original #patent application directed to claims that do not require a moisture-permeable applicator head. The patent was allowed and Hologic sued #Minerva for infringement. 28/
#Minerva argued the new #patent was invalid for lack of written description under 35 U.S.C. 112 because Truckai’s original application did not support a device with a moisture-impermeable applicator head. 29/
You can see how both parties have decent arguments regarding the fairness of this outcome. #AppellateTwitter #SCOTUS #Minerva 31/
On one hand, #Minerva says: why should we be barred from arguing that a claim that Hologic drafted a decade after Truckai sold his patent is broader than anything Truckai actually invented? 32/
On the other hand, Hologic says: Truckai’s originally #patent application had a claim that didn’t require moisture permeability. So isn’t his argument now just a very convenient change in position—the exact kind we have estoppel doctrines to prohibit? 33/
(To which #Minerva might respond: even if that’s your position, that’s a reason to reject our argument on the merits—not a reason to prevent us from making it in the first place.) 34/
(If you’re still reading, you must share my rather non-standard views on what counts as “fun.”) 36/
#Minerva argues that assignor estoppel should be overruled outright because it lacks any support in (1) the text of the #Patent Act, (2) #SCOTUS precedent, (3) common-law rules, or (4) sound policy. 37/
In the alternative, #Minerva argues that the doctrine should be limited. 38/
Specifically, #Minerva says assignor estoppel (1) should not protect claims issued after assignment, (2) should not bar section 112 defenses, and (3) should not apply unless the assignor made a representation as to validity on which the assignee relied. 39/
Hologic argues that #SCOTUS affirmed the validity of assignor estoppel in a 1924 case called Westinghouse. Given that, Hologic says, Congress implicitly viewed the doctrine as part of the 1952 #Patent Act, and stare decisis precludes it from being overruled now. 41/
Hologic also argues that Minerva’s attempts to narrow assignor estoppel are illogical, inconsistent with precedent, or better addressed to Congress. 42/
The United States, appearing as amicus in support of neither party, advocates for a middle ground, which is pretty complex so I’m going to have to break it up into two tweets. #AppellateTwitter #SCOTUS #Minerva 43/
The U.S. says assignor estoppel should apply only where (1) an inventor sells patent rights in an arms-length transaction and later argues the #patent is invalid AND 44/
(2) either the contested claim is materially identical to a claim issued or pending at the time of assignment, or the assignor’s invalidity defense otherwise contradicts the assignor’s representations regarding the claim’s validity. #AppellateTwitter 45/
If you’re thinking that sounds complicated, I won’t disagree with you. But basically the government is trying to limit the doctrine’s application to situations that would otherwise produce obvious unfairness—like the “I sell you my #patent” hypo I opened with. 46/
Various amici have also weighed in. Most of them advocate for some kind of middle ground—narrowing assignor estoppel but not eliminating it. 47/
I’ll offer a final caveat. Oral argument is not a perfect indicator of which way #SCOTUS is leaning. (Sometimes it’s not even a good indicator.) So take the prognosticating with ample grains of salt. #AppellateTwitter #Minerva 49/
And we're off! Robert Hochman, counsel for #Minerva , begins his opening statement. 50/
He says that assignor estoppel has no basis in the text of the #Patent Act and has been undermined by #SCOTUS decisions. 51/
CJ Roberts opens questioning by asking Hochman about policy: doesn't assignor estoppel ensure the strength and stability of #patents, which encourages innovation? 52/
Hochman responds that the patent system depends on challenges to validity to make sure that we don't over-protect inventions, at the expense of competition. #Minerva 53/
Roberts asks Hochman his response to the government's proposed limitation of assignor estoppel. 54/
He responds that #Minerva would win under the government's approach. But #SCOTUS should decide the issue now--not remand to the Federal Circuit for further consideration. 55/
Justice Thomas notes that principles like collateral estoppel don't appear in the #Patent Act either, but no one disputes they apply in patent cases. Why is assignor estoppel any different? 56/
Hochman says claim and issue preclusion are bedrock principles of common law that are implicit in all congressional statutes; assignor estoppel is not nearly so well settled. 57/
There is also an exchange about the nitty-gritty details of the lack-of-written-description argument #Minerva has made. (Told you the facts would come up!) 58/
Justice Breyer says, assume there is a lot of precedent in favor of some sort of assignor estoppel. If we keep it, which set of limitations on the doctrine would be best? 59/
Hochman says he has a "quibble" with the government's position: the "materially identical" language will introduce confusion. But he suggests that the government's position would be OK in this case because #Minerva would still win. 60/
Justice Alito asks why this is a question for #SCOTUS instead of Congress. There is precedent supporting the doctrine; isn't the job of overturning it Congress's? 61/
Hochman says that there is no #SCOTUS precedent supporting the doctrine because SCOTUS has never actually found assignor estoppel to apply. SCOTUS has just steadily undermined it. 62/
Justice Alito seems skeptical that there are no stare decisis concerns here. So far, there doesn't seem to be a lot of support for jettisoning assignor estoppel completely. #AppellateTwitter 63/
Justice Sotomayor asks another question about the government's proposal: isn't it pretty similar to the version of the doctrine #SCOTUS applied in the Westinghouse case? 64/
Hochman says the government's proposal is close to #Minerva's in terms of permitting section 112 challenges. (Perhaps he senses that his fallback position is more likely to carry the day here.) 65/
Justice Sotomayor asks another question about stare decisis and whether Congress should be considered to have implicitly included assignor estoppel in the #Patent Act in 1952. #AppellateTwitter #SCOTUS #Minerva 66/
Justice Kagan follows up in a similar vein: assume that #SCOTUS decisions have endorsed some version of assignor estoppel. What "superspecial justification" (see Kimble) is there to overturn it? 67/
Kagan wrote Kimble (arguably the most on-point stare decisis precedent), by the way. 68/
Justice Kagan also asks a question about the "core" of the doctrine--shouldn't assignor estoppel apply if there is an express representation on which the assignee relies? 69/
Hochman suggests that there would be an estoppel in practice but it might operate as a result of common-law fraud principles, or perhaps equitable estoppel. 70/
Justice Gorsuch asks another question about the government's proposal--what kind of questions would the courts have to answer under this approach? 71/
I read it as an invitation to Hochman to say that the government's proposal is unworkable/amorphous, and he accepts the invitation. 72/
Justice Gorsuch suggests that assignor estoppel wouldn't do a lot of work under the government's proposal because usually these assignments occur between individual inventors and their employers by operation of employment agreements. #Minerva 73/
Justice Kavanaugh asks another question about stare decisis. What is the special justification for overruling Westinghouse? #AppellateTwitter #SCOTUS #Minerva 74/
Hochman responds again that subsequent #SCOTUS decisions have undermined assignor estoppel, and SCOTUS already overruled its cousin, Licensee Estoppel. 75/
Kavanaugh follows up with a question about reliance interests. 76/
We'll see what the Justices ask Hologic, but I will say again, there doesn't seem to be much enthusiasm for getting rid of assignor estoppel altogether. 77/
Justice Barrett asks how equitable estoppel might apply here if assignor estoppel doesn't. 78/
Hochman says it wouldn't apply because there is no way Hologic could have thought it was buying a patent covering a moisture-impermeable applicator head. 79/
Justice Barrett also asks a question about the role of reliance in the estoppel analysis: couldn't the assignee always do their own due diligence on the validity of the patent? #AppellateTwitter #SCOTUS #Minerva 80/
Hochman spends most of his closing time emphasizing the unfairness of applying assignor estoppel on this particular set of facts. 81/
Chief Justice Roberts asks about the "valuable consideration" part of the government's test. 83/
Ratner suggests that this would mean the doctrine does NOT apply when rights in an invention transfer automatically by operation of an employment agreement. 84/
That's significant, because this is how many, many #patent assignments happen. 85/
Justice Thomas asks about how the government's test applies on the facts here. Ratner responds that the #FederalCircuit should address that question in the first instance. 86/
Justice Breyer says he finds it difficult to determine a workable way to limit the doctrine, and he illustrates the point with a hypothetical. 87/
Justice Alito asks where the government's test comes from--is it just what is good policy? 88/
Ratner says no, the government's test derives from the #SCOTUS decision in Westinghouse and from common-law principles surrounding the doctrine of estoppel by deed. #Minerva 89/
Justice Sotomayor asks another question about how the government's test would operate. She points out that Westinghouse was premised on a "practicing the prior art" defense that was subsequently abandoned in #patent law. 90/
Doesn't this give credence to #Minerva's argument that the doctrine is outdated? (Justice Sotomayor asks) 91/
Justice Kagan follows up with a question about the differences between equitable and assignor estoppel: is there a difference in how they operate in the classic "bait-and-switch" case that we're all worried about? 92/
Justice Gorsuch says that no court has ever applied the government's test, so why doesn't the government face the same stare decisis problems that #Minerva does? 93/
He also asks why we would look to a doctrine from real property to help with this analysis when patents are personal property? 94/
He also asks why reliance isn't a part of the government's test. 95/
Justice Gorsuch does not seem to love the government's proposed test. #AppellateTwitter #SCOTUS #Minerva 96/
Justice Kavanaugh asks some more questions about the specific contours of the government's test. It does seem that most Justices are looking for a workable way to limit the doctrine but not abolish it entirely. 97/
Ratner closes by emphasizing that the government's test puts intellectual property on par with other kinds of property--it provides protections comparable to estoppel by deed for real property and implied warranties for personal property. #AppellateTwitter #SCOTUS #Minerva 98/
Wolf emphasizes assignor estoppel's long history and says that, if the competing policy concerns surrounding the doctrine are to be re-weighed, it should be by Congress. 100/
Chief Justice Roberts asks about #SCOTUS's prior statements suggesting that assignor estoppel is a weak and unsettled doctrine--doesn't that suggest there are fewer stare decisis concerns here? 101/
Wolf responds that, while there was critical language, #SCOTUS explicitly refused to overturn the doctrine. 102/
Chief Justice Roberts asks if assignor estoppel applies when the #patent rights are transferred automatically by operation of an employment agreement. Wolf suggests that, under Hologic's position, it does apply. 103/
Justice Thomas asks how that position applies when there are subsequent transfers of the rights. Wolf responds by talking about the facts of this case and suggesting that Truckai's convenient change in positions here is exactly what the doctrine is supposed to prevent. 104/
Justice Thomas also asks how the doctrine fits with the text of the #Patent Act. 105/
Wolf responds that Congress is presumed to legislate against the background of common-law principles like these. 106/
Justice Thomas pushes back, suggesting that we can't expect Congress to amend a statute to eliminate a rule that doesn't actually appear in the statute. 107/
Justice Breyer notes that a lot has changed since assignor estoppel was developed--#patent law itself, employment agreements, the complexity of inventions. 108/
Wolf notes as part of his response that the #PTAB is one thing that has changed, and assignors ARE allowed to raise invalidity challenges in the PTAB. He also notes that Westinghouse was an employer-employee case. #AppellateTwitter #SCOTUS #Minerva 109/
Justice Alito passes. 110/
Justice Sotomayor says that there is a fairness element here that Hologic is not grappling with: shouldn't the doctrine be tethered in some way to a determination of the actual scope of what was assigned? 111/
For what it's worth, I read these questions to Wolf so far to go mostly to how to limit assignor estoppel, not whether we should keep it at all. So more indications that a middle-ground approach may be in the cards. 112/
Wolf emphasizes the fact that Truckai's original patent application included a claim that didn't require moisture permeability. 113/
Justice Kagan asks a hypo: an inventor assigns an application, assignee broadens it beyond anything the inventor thought patentable. Why should the inventor be estopped? #AppellateTwitter #SCOTUS #Minerva 114/
Wolf responds that the inventor could go to the #Patent Office (for example, in a PGR) and make her 112 argument. 115/
Kagan pushes back: Sure, but why not allow that argument in district court too? Why doesn't that make sense? 116/
Wolf responds that the assignor can still argue in district court that the patent should be read narrowly, a la Westinghouse. 117/
Justice Gorsuch emphasizes prior criticisms of the doctrines and the intervening changes (such as the fact that it doesn't apply before the #Patent Office). Isn't the case for stare decisis weak here? #AppellateTwitter #SCOTUS #Minerva 118/
This is probably the question that suggests the most receptiveness so far to overruling the doctrine entirely. 119/
Justice Kavanaugh asks about the differences between Hologic's position and the government's position. #AppellateTwitter #SCOTUS #Minerva 120/
Wolf says that the government's proposal has stare decisis problems and is also more strict ("materially identical") than the written-description standard itself. 121/
He also says it would be a difficult test to administer. 122/
Justice Barrett asks if this is a "reenactment canon" case, or a case where Congress legislated against a common-law background, and does it matter? 123/
Wolf's succinct reply: "Both, and no." 124/
Justice Barrett pushes back: doesn't the reenactment canon (i.e., the idea that if a doctrine has been read into a statute and Congress reenacts it, Congress is presumed to have reenacted the doctrine) require a stronger showing that the doctrine is firmly established? 125/
Wolf notes that lower courts have consistently applied assignor estoppel; Justice Barrett responds that they were under an obligation to do so until #SCOTUS firmly overrules it. 126/
And now for #Minerva's rebuttal. Hochman emphasizes that "claim 31" (the broad one in the original application) was not obtained--it was cancelled. 127/
Interesting that Hochman is emphasizing the facts so heavily, instead of the broad argument about how assignor estoppel has no place in the law. 128/
It suggests to me that Hochman may think his best bet to win is to obtain a ruling that assignor estoppel shouldn't apply, e.g., when the assignee dramatically expands the scope of the invention after assignment. 129/
He does close with the point that equitable estoppel and common-law fraud principles could equally provide any benefits that assignor estoppel does. #AppellateTwitter #SCOTUS #Minerva 130/
And that is all for today! Thank you for joining us. 131/
I will stress again that reading #SCOTUS tea leaves is a risky business. But a good many questions today seemed to be searching for a workable and fair way to limit the doctrine of assignor estoppel while not discarding it entirely. #AppellateTwitter #SCOTUS #Minerva 132/end
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