Last month, the Federal Circuit in Husky Injection Molding Systems Ltd. v. Athena Automation Ltd., Nos. 2015-1726, 2015-1727 (Fed. Cir. Sep. 23, 2016) addressed the issue of whether assignor estoppel may bar a party from filing a petition for inter partes review (“IPR”) at the USPTO. Assignor estoppel is an equitable doctrine that bars a patent assignor from subsequently attacking the validity of the patent in litigation.
In this case, a former owner and president of Husky Injection Molding Systems (“Husky”), who was also a co-inventor of a patent at issue (U.S. Pat. No. 7,670,536), left Husky to form a new company Athena Automation (“Athena”). Athena later filed the petition for inter partes review challenging the patentability of all claims of the ‘536 patent. Husky filed a preliminary response, arguing only that assignor estoppel barred Athena from filing the petition. The Patent Trial and Appeal Board (the “Board”) rejected the argument and instituted review. The Board later issued its final written decision in which certain claims were found to be anticipated. Husky timely appealed the Board’s decision with regard to the claims found to be anticipated and Athena cross-appealed regarding the remaining claims.
Husky’s appeal solely focused on whether assignor estoppels may bar a party from of filing an IPR. Husky contended that Athena was in privity with its former CEO, the assignee of the ‘536 patent, and as such was estopped from challenging the claims of the ‘536 patent under the equitable doctrine of assignor estoppel.
The Federal Circuit ultimately rejected Husky’s appeal for lack of jurisdiction in a split decision. The majority of the panel determined that none of the three categories the Supreme Court specifically mentioned as reviewable applied in this case. These categories include whether the challenge at issue is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” or if it instead “implicate[s] constitutional questions,” “depend[s] on other less closely related statutes,” or “present[s] other questions of interpretation that reach, in terms of scope and impact,” “well beyond ‘this section.’”.
At the second step of the inquiry, the panel determined whether the challenge was grounded in a “statute closely related to that decision to institute”. The majority panel determined that assignor estoppel only limits challenges by the assignor of a patent application and, as such, does not foreclose all challenges to a patent’s validity from the remainder of the general public. The panel continued that to that end, assignor estoppels does not prevent a tribunal from evaluating the validity of any challenged claims generally, but rather simply limits the parties that may ask the tribunal for such an evaluation. The panel concluded that they lacked jurisdiction to review the Board’s determination on whether equitable defenses such as assignor estoppel precludes it from instituting inter partes review. The Federal Circuit therefore dismissed Husky’s appeal, and additionally expressed no opinion on the merits of the Board’s conclusion that assignor estoppel may not bar an assignor or his or her privies from petitioning for inter partes review.
The Federal Circuit additionally vacated the decision of the Board as to the non-anticipated claims and remanded this issue to the Board for further evaluation.