On Monday, January 31, 2022 at 1:00 pm, we will discuss the following cases.
The first, from the Supreme Court, Minerva Surgical, Inc. v. Hologic, Inc., 141 S. Ct. 2298 (2021) (Justice Kagan), revisits the assignor estoppel doctrine. “That doctrine, rooted in an idea of fair dealing, limits an inventor’s ability to assign a patent to another for value and later contend in litigation that the patent is invalid.” Assignor estoppel has been the law at least since Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342 (1924). The patent in Minerva teaches a device to treat abnormal uterine bleeding. Csaba Truckai invented the device and assigned the application and future continuations to Novacept. In 2004, Novacept sold its portfolio of patents to another company, which later sold its patents to respondent Hologic, Inc.
Truckai founded petitioner Minerva where he developed another device to treat abnormal uterine bleeding, which Minerva patented. It differed from the device he patented at Novacept. In 2013, Hologic filed a continuation application adding claims that were broad enough to cover Minerva’s device. Hologic sued Minerva in Delaware where the trial court found infringement and invoked assignor estoppel to uphold validity. The Federal Circuit affirmed.
The Supreme Court began by discussing Westinghouse, where the Court said, “If one lawfully conveys to another a patented right…” “fair dealing should prevent him from derogating from the title he has assigned.” But assignor estoppel has limits. In an employment agreement where an inventor assigns future inventions, the assignment cannot contain a representation that a patent is valid because “the invention itself has not come into being.” A second example limiting estoppel occurs if the law changes. The third example occurs when the assignor changes the patent claims. Any “new claims resulting from that process may go beyond what ‘the assignor intended’ to claim as patentable.” “If Hologic’s new claim is materially broader” than those Truckai assigned, “Truckai could not have warranted its validity in making the assignment. And without such a prior inconsistent representation, there is no basis for estoppel.” The Court remanded the case to the Federal Circuit to address “whether Hologic’s new claim is materially broader than the ones Truckai assigned.”
Justices Alito and Barrett filed one dissent and Justices Barrett. Thomas and Gorsuch filed another dissent. The first one was based on stare decisis. If the court overruled Westinghouse, it needed to explain why stare decisis did not apply. The second dissent argued Westinghouse is not good law because intermediate cases already limited it.
The second case, Arunachalam v. IBM, 989 F.3d 988 (Fed. Cir. 2021) (Judges Lourie, Wallach, and Chen), affirmed an award of attorney fees against plaintiff Arunachalam for her vexatious and wanton litigation conduct. This is one of many lawsuits she brought. She sued IBM pro per for infringing her Pat. No. 7,340,506, “Value-added network switching and object routing” and for RICO violations. Then she amended her complaint by adding as defendants Judge Andrew, the judge assigned to the case, and SAP and JPMorgan. After defendants move to dismiss the RICO claims, Arunachalam moved to recuse Judge Andrews and for entry of default judgment against him. Judge Andrews referred the motion to dismiss to Chief Judge Stark, so Arunachalam moved to recuse him too. That was denied, and the case against Judge Andrews was dismissed. The court also dismissed the RICO claims. Arunachalam then filed a 102-page second amended complaint, which the court dismissed because she failed to move to file it.
Meanwhile the PTAB found her patent claims unpatentable. IBM then moved to dismiss her patent claims for relief. She opposed by arguing the PTAB engaged in “lawless misconduct and Constitutional public breach and fraud” “in a blatant civil rights discrimination against [her]”).
Defendants moved for attorney fees, and the district court awarded about $57,000 to JPMorgan, $52,000 to SAP, and $40,000 to IBM. Arunachalam argued on appeal the Federal Circuit cannot “affirm the District Court’s sanctions and attorneys’ fees without offending the Constitution,” specifically, her rights under the First, Fifth, Eighth, and Fourteenth Amendments. The court also struck Arunachalam’s briefing’s “scandalous and baseless allegations.” She alleged defendants and “all counsel” have “collusively engaged in obstruction of justice, aided and abetted by Judges Stark and Andrews,” have “knowingly, willfully, intentionally, recklessly, [and] negligently ma[de] False Official Statements, causing damage to [Dr. Arunachalam’s] patents and her pristine character/reputation,” and have “us[ed] the courts as a vehicle to propagate libel.”
Even according Arunachalam “wider latitude because of her pro se status, her baseless, outlandish, and irrelevant invective degrades the dignity and decorum of the court and hampers ‘the orderly and expeditious disposition of cases.’ Sanctions are appropriate to address and discourage such abusive conduct.”
But the Federal Circuit refused to award monetary sanctions for the appeal.