United States: Assignor May Challenge Validity Of A Patent It Assigned By Using Patent Office IPR Proceedings Despite Being Precluded From Challenging Validity In Court


The Federal Circuit held that it has no jurisdiction to review the U.S. Patent and Trademark Office's decision to institute an inter partes review (IPR) proceeding allowing an assignor to challenge the validity of a patent that it previously assigned. The assignee argued the IPR should not have been instituted based on the legal doctrine of "assignor estoppel" that prevents an assignor of a patent from attacking the validity of the patent it assigned. In concluding that it did not have jurisdiction to review the institution decision of the USPTO, the Federal Circuit permitted the assignor to avoid application of assignor estoppel.

The America Invents Act permits any person who is not the owner of a patent to challenge the validity of the patent using an inter partes review (IPR) proceeding at the U.S. Patent and Trademark Office (PTO). The law further provides that the PTO's determination whether to institute the proceeding is final and non-appealable. In contrast, the legal doctrine of "assignor estoppel" prevents an assignor who assigned a patent from later attempting to invalidate that patent in court.

In Husky Injection Molding Systems, Ltd. v. Athena Automation Ltd., an assignee of a patent appealed the PTO's final written decision finding claims in the patent were invalid, arguing that the PTO should not have instituted the IPR proceeding in the first place because the challenge to the patent's validity was filed by a company formed by the assignor. The Federal Circuit held it did not have jurisdiction to review the institution decision relative to assignor estoppel.


U.S. Patent No. 7,670,536, directed to a molding machine with a clamp assembly, names two co-inventors, one of whom was the owner and president of Husky Injection Molding Systems, Ltd. The inventors of the '536 patent assigned their patent rights to Husky, which is the original assignee on the patent. One of the inventors was also the owner and president of Husky. He sold the Husky business to a private equity group and formed a new company, Athena Automation Ltd.

Athena then filed an IPR petition at the PTO, challenging the validity of all claims in the '536 patent. Husky responded that the doctrine of assignor estoppel barred Athena from filing its petition for inter partes review. The PTO's Patent Trial and Appeal Board ("Board") disagreed and instituted the IPR proceeding. In a final written decision, the Board found most of the claims were invalid over prior art. Husky appealed the final written decision with respect to the Board's failure to apply the doctrine of assignor estoppel to bar institution of the IPR proceeding.

The Husky Decision

The Husky decision provides a test for determining whether the Federal Circuit may review a particular challenge to the Board's IPR institution decision. According to the test, the Federal Circuit may review a challenge to the institution decision if it (1) implicates constitutional questions, (2) depends on other less closely related statutes, or (3) presents other questions of interpretation that reach well beyond this section of the statute. However, the Federal Circuit may not review the challenge if it is closely related to the application and interpretation of statutes related to the PTO's decision to initiate inter partes review, unless it is directed to the Board's ultimate invalidation authority with respect to a specific patent.

In this case, the Federal Circuit concluded it did not have jurisdiction to review the Board's decision to institute the IPR despite Husky's argument that assignor estoppel should apply because (1) Husky's appeal did not implicate any constitutional questions; (2) assignor estoppel is a doctrine created by the courts, not by statutes, and its application depends on an interpretation of a closely-related America Invents Act statute for determining who may file IPR petitions; (3) the relevant statutory section pertains to arguments concerning patentability and the strength of such arguments, and the question of assignor estoppel does not present questions of statutory interpretation that reach well beyond those same concerns; and (4) assignor estoppel does not impact the Board's ultimate invalidation authority for the patent, since the patent could be challenged by petitioners who are not subject to assignor estoppel.

Strategy and Conclusion

This case illustrates a useful defense strategy for an assignor that has been sued for infringing a patent it had previously assigned. The assignor may use an IPR proceeding in the U.S. Patent and Trademark Office to challenge the validity of the patent it assigned even though the assignor may be precluded from challenging the patent's validity in court under the doctrine of assignor estoppel.

The Husky opinion can be found here.

Previously published in LES Insights

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