The Board’s recent Final Written Decision in Arista Networks, Inc. v. Cisco Systems, Inc., Case IPR2016-00303, confirms that assignor estoppel remains unavailable to patent owners.
Assignor estoppel is an equitable remedy that prohibits a patent assignor, or one in privity with an assignor, from later challenging the validity of an assigned patent. See, e.g., Mag Aerospace Industries, Inc. v. B/E Aerospace, Inc. (Fed. Cir. 2016). Courts have reasoned that an assignor should not be permitted to sell a patent and later assert that it is worthless, all to the detriment of the assignee. The AIA, however, 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.” 35 U.S.C. § 311(a). The Board has interpreted the statute as allowing an assignor of a patent, who is not an owner of the patent at the time of filing, to file a petition requesting inter partes review. The Board has explained that “Congress has demonstrated that it will provide expressly for the application of equitable defenses when it so desires.” Redline Detection, LLC v. StarEnvirotech, Inc., Case IPR2013-00106, Paper 40 at 4 (PTAB Oct. 1, 2013) (citation omitted).
In Arista v. Cisco, Cisco argued that the Board’s rejection of the assignor estoppel defense works an injustice by allowing a prior assignor an end run around the assignor estoppel doctrine. The Board considered Cisco’s arguments for application of assignor estoppel, and noted that it is “cognizant of the specter of forum shopping,” but declined to apply the equitable defense to the IPR proceeding because Congress had not expressly provided for the application of equitable defenses.
Litigation defendants often file IPRs to benefit from the technical expertise of the Board, lower evidentiary burden, and potentially broader claim construction. The Board’s recent decision exemplifies that, at least for now, petitioners may also invalidate a patent in an IPR when they would be estopped from doing so in litigation.