Assignor estoppel is not applicable to an AIA proceeding. Thus, an assignor of a patent may challenge the validity of that patent in an AIA proceeding.
Husky’s former owner and president, Robert Schad, is also a co-inventor of the patent being challenged in an inter partes review. While at Husky, Schad assigned the patent to Husky. Later, Schad sold Husky to a private equity group, and left to form Athena. Athena filed a petition for inter partes review requesting that the claims of the patent be cancelled.
“Assignor estoppel is an equitable doctrine that prohibits an assignor of a patent or patent application, or one in privity with him, from attacking the validity of that patent when he is sued for infringement by the assignee. . . . Assignor estoppel is thus a defense to certain claims of patent infringement.“ Semiconductor Energy Laboratory Co., Ltd. v. Nagata, 706 F.3d 1365, 1369 (Fed. Cir. 2013) (citations omitted). Husky asserted that the doctrine estopped Athena (who was in privity with Schad, the assignor) from challenging the patentability of the assigned patent.
The Board held that under 35 U.S.C. § 311(a), “a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent” which clearly would include Athena. The Board noted that assignor estoppel is a defense to certain claims of patent infringement,
and that there was no statutory exception to § 311(a) for assignor estoppel. The Board found a comparison to 17 U.S.C. § 1337(c) instructive, in that Congress provided in International Trade Commission (ITC) investigations that “[a]ll legal and equitable defenses may be presented in all cases.” The Board also noted that assignor estoppel does not apply in reexamination proceedings. Hence, an assignor may under 35 U.S.C. § 311(a) file a petition to institute an inter partes review of its assigned patent.
On appeal, the Federal Circuit found it lacked jurisdiction to hear Husky’s challenge to institution. The Court held that 35 U.S.C. § 314(d) provides that “the determination by the Director whether to institute inter partes review under this section shall be final and nonappealable.” The Court held that the Supreme Court in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2141 (2016) did leave open the possibility for appellate review of institution decisions that “implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’” However, the Court found that the exception was not applicable to the case at hand.
U.S. Circuit Judge S. Jay Plager dissented from the court’s decision, saying the court did have the power to review whether the PTAB was within its bounds when it ruled assignor estoppel out as a defense.