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Assignor Estoppel Does Not Relieve Patentee from Issue Preclusion After Affirmance of IPR Claim Cancellation

Hologic, Inc. v. Minerva Surgical, Inc., __ F.3d __, 2020 WL ___ (Fed. Cir. Apr. 22, 2020) (Wallach, Clevenger, STOLL (with additional views)) (D. Del.: Bataillon) (4 of 5 stars)

Fed Cir affirms judgment of liability as to one Hologic patent, and no liability as to another. Hologic’s patents relate to procedures and devices for endometrial ablation, used to treat menorrhagia. All claims of one patent (the ’183 patent) are now cancelled following the Fed Cir’s affirmance of a PTAB IPR decision.

Assignor estoppel: The district court did not err in applying collateral estoppel to deny Hologic’s request for a permanent injunction against further infringement of the ’183 patent, and various supplemental and enhanced damages relating to that patent. The opinion discusses the history of assignor estoppel and reasons that “assignor estoppel does not preclude Minerva from relying on the Hologic decision [i.e., the Fed Cir affirmance of the IPR decision] to argue that the ’183 patent claims are void ab initio.” Op. at 13. Per Arista, 908 F.3d 792 (Fed. Cir. 2018), an assignor may file an IPR petition; per XY, 890 F.3d 1282 (Fed. Cir. 2018), the affirmance of the Board’s decision “has an immediate issue-preclusive effect on any pending or co-pending actions involving the patent.” The opinion declines to be guided by American Fence, 710 F. Supp. .37 (D. Conn. 1989), noting inconsistencies between that opinion and Mentor Graphics, 851 F.3d 1275 (Fed. Cir. 2017).

The district court did not abuse its discretion in applying assignor estoppel to bar Minerva’s validity challenge against Hologic’s other patent. The opinion declines to treat assignor estoppel as abrogated by Lear, 395 U.S. 653 (1969), and cites past Fed Cir opinions doing the same. The opinion analyzes the record and concludes that the equities support application of assignor estoppel. That the claims were still pending at the time of the inventor’s departure from Hologic, and the possibility that Hologic may have broadened them during prosecution, did not require otherwise. The opinion notes that per Westinghouse, 266 U.S. 342 (1924), Minerva may still introduce evidence of prior art to narrow the claims’ scope during claim construction.

Claim construction: The district court did not err in its constructions of the claims, and the opinion discusses how the record supports each of the challenged constructions.

Damages (lack of apportionment): The district court did not reversibly err by awarding to Hologic the full amount of the jury’s award (which was unapportioned between the patents), notwithstanding that the ’183 patent claims were cancelled post-verdict. Per WesternGeco, 913 F.3d 1067 (Fed. Cir. 2019), such an award may be maintained if undisputed evidence establishes that “the sustained patent claim was necessarily infringed by all of the accused activity on which the damages award was based.” Op. at 22. The opinion describes how Hologic contended at trial that both patents covered all accused activity, and Minerva did not present contrary evidence.

Damages (supplemental damages): The opinion describes how the district court did not err in excluding sales of Minerva’s design-around (which Hologic had not accused), or in declining to increase the royalty rate post-verdict (because liability had been established pre-verdict, via summary judgment), or in declining to enhance the rate for ongoing infringement (where Hologic had not sought a finding of post-verdict willfulness).

Damages (judgment date): The district court erred in its computation of the judgment date for purposes of pre- and post-judgment interest on the supplemental damages award. The opinion describes how the district court did not enter an order quantifying supplemental damages until June 3, 2019, and this should have been the date used for purposes of interest computation. The date used by the district court (August 13, 2018, i.e., the date of entry of judgment on the jury’s verdict) was incorrect.

Additional Views (Stoll): Judge Stoll proposes that “it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office.” Op. at 2. She notes particularly the “odd situation where an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office but cannot do the same in district court.” Id. at 1.

KEYWORDS: ASSIGNOR ESTOPPEL; INFRINGEMENT (YES); INVALIDITY (NO); CLAIM CONSTRUCTION; DAMAGES; APPORTIONMENT; SUPPLEMENTAL DAMAGES; DATE OF JUDGMENT