Athena Automation Ltd. v. Husky Injection Molding Sys. Ltd.

When a patent owner argues in a preliminary response that the petitioner is barred by assignor estoppel because a named inventor is in privity with the petitioner, the Board cannot deny the petition on that basis. Section 311(a) provides that "a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent," and the equitable doctrine of assignor estoppel is not an exception to that statutory grant. No prior precedent directly addressed this issue. The Board noted that Husky conceded the Office does not apply assignor estoppel in reexamination, and it contrasted 19 U.S.C. § 1337(c), which makes all legal and equitable defenses available in ITC investigations. A petitioner who assigned the patent, or is in privity with a named inventor such as a founder or CEO, may file an IPR petition and will not be turned away at institution on assignor estoppel grounds. A patent owner cannot use a preliminary response to block institution on that doctrine, and an argument resting on the adjudicative nature of IPR does not engage the language of § 311(a). The Board relied on Semiconductor Energy Laboratory Co., Ltd. v. Nagata, 706 F.3d 1365 (Fed. Cir. 2013), to describe assignor estoppel as a defense to infringement claims, and on Lannom Mfg. Co. v. Int'l Trade Comm'n, 799 F.2d 1572 (Fed. Cir. 1986), for the ITC contrast. LEGAL TEST OR STANDARD: The Board applied a statutory-text analysis, not a multi-factor test. Under 35 U.S.C. § 311(a), any person who is not the owner of the patent may petition. An assignor is no longer an owner at filing, so it may petition. Because the Board was not persuaded that the equitable doctrine of assignor estoppel provides an exception to that statutory mandate, it declined to deny the petition on that basis. TRIGGERING FACTS: The Patent Owner's only preliminary response argument was assignor estoppel. It said named inventor Robert Schad was the founder, co-owner, President, CEO and one of two directors of Petitioner Athena and was therefore in privity with Athena. The Patent Owner conceded that the Office does not apply assignor estoppel in reexamination, and argued it should apply in IPR because of the adjudicative nature of the proceedings. KEY QUOTE: "Because we are not persuaded that assignor estoppel, an equitable doctrine, provides an exception to the statutory mandate that any person who is not the owner of a patent may file a petition for an inter partes review, we decline to deny this Petition based on the doctrine of assignor estoppel." (Paper 18, p. 13) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board cited Semiconductor Energy Laboratory Co., Ltd. v. Nagata, 706 F.3d 1365, 1369 (Fed. Cir. 2013), on assignor estoppel being a defense to infringement claims, and distinguished Lannom Mfg. Co. v. Int'l Trade Comm'n, 799 F.2d 1572, 1579 (Fed. Cir. 1986), because the ITC statute expressly allows all legal and equitable defenses. PRACTICE TIP: Patent owners should not make assignor estoppel the centerpiece of a preliminary response, because it will not prevent institution. Argue the merits instead, such as claim construction and the sufficiency of the petition's showing. If you do raise it, address the text of § 311(a) directly, since the Board found that Husky's arguments did not.