Assignor estoppel does not apply in inter partes review proceedings

While employed by the patent owner, an employee invented the subject matter of the patent-at-issue, and assigned the rights to that invention to the patent owner. The employee then left the patent owner’s company to co-found a competing company. He became the chief scientist of the company and a director, and was one of its largest stockholders. The company he co-founded later brought an inter partes review (IPR) petition to invalidate certain claims of the patent-at-issue. Although the International Trade Commission (ITC) had applied assignor estoppel to bar validity challenges, the Patent Trial and Appeal Board (PTAB) declined to apply the “assignor estoppel” doctrine. The PTAB held that the doctrine is unavailable in the IPR context. The patent owner appealed, and the Federal Circuit affirmed the PTAB’s decision.

The assignor estoppel doctrine prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. In affirming the PTAB’s finding that this doctrine did not apply in an IPR proceeding, the Federal Circuit explained that Section 311(a) of the Patent Act allows any person “who is not the owner of a patent” to file an IPR, and thus leaves no room for assignor estoppel in the IPR context. The Federal Circuit rejected the patent owner’s argument that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context, creates an inconsistency that invites forum shopping. The court reasoned this apparent inconsistency results from an intentional congressional choice that is consistent with the overarching goals of the IPR process. Thus, the Federal Circuit held that the Patent Act dictates that assignor estoppel not apply in IPR proceedings. 

A copy of the opinion can be found here