United States: Board Reaffirms That Assignor Estoppel Does Not Bar Assignor From Filing IPR Petition

In Frameless Hardware Co. LLC v. C.R. Laurence Co., Inc.,¹ the Board declined to apply assignor estoppel to deny a petition, citing precedential Federal Circuit and Board decisions.

CRL's Assignor Estoppel Argument

Petitioner Frameless Hardware Company LLC (FHC) challenged claim 8 of U.S. Patent No. 9,074,413 (the '413 patent), owned by C.R. Laurence Co., Inc. (CRL). In its preliminary reply, Patent Owner CRL invoked the doctrine of assignor estoppel based on Petitioner's employment of Gary Sprague, the sole inventor of the '413 patent, who signed both a declaration during prosecution attesting that he was the original inventor of the claimed inventions and an assignment conveying his rights in the patent to CRL. In addition, the Patent Owner put forth evidence that Mr. Sprague had knowledge when he executed the declaration and assignment to CRL of the two primary references asserted in the petition. CRL also cited Mr. Sprague's deposition testimony from related district court litigation between the parties in which Mr. Sprague stated that he believed the '413 patent was patentable over the asserted prior art until he abruptly changed his mind after seeing an earlier IPR petition prepared by FHC. Based on this set of facts, CRL alleged that FHC, through its employment of Mr. Sprague, was estopped from contradicting Mr. Sprague's implied assurance at the time of filing the '413 patent that it was patentable over the prior art he was aware of, which included the prior art references FHC now attempts to assert.

Doctrine of Assignor Estoppel

35 U.S.C. § 311(a) provides that “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.” In considering the Patent Owner's assignor estoppel argument, the Board cited two key presidential decisions: the Federal Circuit's holding in Arista Networks, Inc. v. Cisco Sys. Inc.,² which is binding upon the Board, and the Board's own precedential decision in Athena Automation Ltd. v. Husky Injection Molding Sys. Ltd.³ The Arista Networks  Court held that 35 U.S.C. § 311(a) “unambiguously leaves no room for assignor estoppel in the IPR context.”⁴ Similarly, in Athena Automation, the Board explained that, under § 311(a), an assignor of a patent who is no longer an owner of the patent at the time of filing may file a petition requesting inter partes  review.

The Board also considered the recent Supreme Court decision Minerva Surgical, Inc. v. Hologic, Inc.,⁵ which Patent Owner cited in support. But the Board distinguished Minerva, noting that it involved an assignor estoppel issue raised in an infringement suit at the district court, not an inter partes review at the Board. According to the Board, the Minerva  Court “determined 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.'”⁶ “[A]bsent that kind of inconsistency,” the Board concluded that “an invalidity defense raises no concern of fair dealing—so assignor estoppel has no place.”⁷ The Board thus declined to apply assignor estoppel to deny the petition.

Footnotes

1 Frameless Hardware Co. LLC v. C.R. Laurence Co., Inc., IPR2022-00620, Paper 8 (PTAB Sept. 13, 2022).

2 908 F.3d 792 (Fed. Cir. 2018).

3 IPR2013-00290, Paper 18 at *12–13 (PTAB Oct. 25, 2013) (precedential).

4 Arista, 908 F.3d at 801–04.

5 141 S. Ct. 2298 (2021).

6 Frameless, IPR2022-00620, Paper 8 at *9 (emphasis in original).

7 Frameless, IPR2022-00620, Paper 8 at *9-10.

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