Should patent assignment agreements include contractual provisions precluding assignors from pursuing post-issuance trials after board reaffirms decision that assignor estoppel is not a defense to a post-issuance trial proceeding?

The Board recently denied a request for rehearing of its decision denying a motion for additional discovery on the basis that assignor estoppel is not a defense that a patent owner can raise in a post-issuance trial proceeding. Specifically, inRedline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, Paper 40 (Oct. 1, 2013), the Patent Owner argued that “[t]here is no indication in the [the AIA] or its legislative history that Congress intended inter partes reviews to grant assignors an end run around the bar that they would face in district court litigation.” The fact that 35 U.S.C. 311(a) does not expressly reference assignor estoppel should not be dispositive, according to the Patent Owner. The Patent Owner further argued that the legislative history shows that the PTAB has the ability to make “equitable determinations” and that the PTAB already makes equitable determinations in other areas of its jurisdiction. The Board disagreed, explaining that the question to be answered was not “whether the Board has the authority to make equitable determinations or to recognize equitable defenses in inter partes reviews,” but instead “whether the Board has the authority to recognize the equitable defense of assignor estoppel in an inter partes review.”

The Board first noted that under 35 U.S.C. 311(a), Congress indicated that “a person who is not the owner of a patent” can petition for a post-issuance trial. “Here, we are presented with a clear expression of Congress’s broad grant of the ability to challenge the patentability of patents through inter partes review. Moreover, Congress has demonstrated that it will provide expressly for the application of equitable defenses when it so desires.” The Board further looked to statutes related to the International Trade Commission (“ITC”) which allows the ITC to consider all legal and equitable defenses. Under this authority, the ITC “concluded that it must consider the defense of assignor estoppel in cases in which a patent owner may seek to have infringing gods excluded from the United States.” Here, however, “Congress issued no similar statutory mandate to the Office in connection with AIA post-grant reviews, instead, making inter partes reviews widely available to ‘a person who is not the owner of a patent.’” Because assignor estoppel cannot be raised in post-issuance trials, the Board concluded that it had not abused its discretion when denying discovery into assignor estoppel issues.

This decision raises a number of questions for would be assignees including whether they should include in assignment agreements provisions that would preclude attacks on the patent in post-issuance trial proceedings. If advisable, how would such a provision be enforced? Would that leave the assignee with a remedy of seeking to enforce the agreement by filing for a TRO or injunction? It will be interesting to see if this issue is ultimately addressed by the Federal Circuit.