The idea of a scenario as presented in the blog title might seem silly, but the reality is that, based on legal decisions made by the Patent Trial and Appeal Board and more recently by the U.S. Court of Appeals for the Federal Circuit, it could happen. In fact, it has, specifically in the context of inter partes review (IPR).
If you have read our previous posts about this area of patent adjudication, you know that IPR has been the center of some of contention since it’s institution under the America Invents Act of 2012 (AIA). But earlier this year, the U.S. Supreme Court ruled that IPR does not violate a patent holder’s rights to due process, even if it results in patents being revoked without federal court oversight.
Decisions set aside traditional doctrine
At issue in the decisions mentioned at the start of this post is a common law rule (rather than one set by statute) that says that prior owners of patents, including inventors who assign patents to an employer, can’t later seek to invalidate the patent. This is called the doctrine of assignor estoppel.
In the case before the appeals court, a former employee of Cisco Systems, Inc. had invented a computer network security system and assigned the patent to Cisco. He later started a competing company and challenged the patent through IPR.
Cisco argued that assignor estoppel, typically recognized in such forums as the International Trade Commission and district courts, should apply before the PTAB. The company said allowing the assignor to proceed with the IPR would effectively create judicial inconsistency and encourage forum shopping.
The appeals court, however, said the AIA specifically says that, subject to certain provisions, “A person who is not the owner of a patent may file with the (Patent) Office a petition to institute an inter partes review of the patent.” Because the inventor in this case doesn’t own the patent, the court says he can ask for IPR and the PTAB can hear the case.
Since that appellate ruling, legal observers have started to debate the implications. Many suggest it does create a means for patent assignors to try to erode patent value later through IPR. And that raises the question of whether employment contracts need adjustment to mitigate such risks.
Such questions are valid and exploration of options is something to discuss with experienced intellectual property counsel.