Options for invoking assignor estoppel in IPR

The bifurcation of legal processes related to intellectual property prosecution can be frustrating. This was highlighted in a post late last year. It reported on a decision by the U.S. Court of Appeals for the Federal Circuit in which the panel said that a doctrine that prevents inventors granted a patent from later challenging the validity of that patent in federal court or before the International Trade Commission does not necessarily prevent such a challenge through inter partes review (IPR).

Language in the federal law that created IPR through the Patent Trial and Appeal Board says any person who doesn’t own a patent can initiate a challenge against it. And in the case we discussed in that post, the appeals court said the challenger fit that bill because he had assigned the patent to his former employer.

What’s a patent holder to do?

That open window of opportunity leads to the question, what can a patent-holding company do to minimize the risk of such patent litigation? Legal observers examining the question suggest there’s no easy answer, noting that some potential solutions lead to a potential conflict with other laws.

For example, it might be possible to change patent assignment agreements to bar employees from bringing IPR challenges after they leave the company. The right to seek an IPR would remain, but it would create possible action by the company for a breach of contract claim.

That solution would provide cover with future employees, but it raises possible issues if a company tries to amend agreements with existing employees. Labor laws in most jurisdictions require that such revisions be accompanied by some form of consideration to each employee, financial or otherwise.

This might be possible for a small company to undertake, but large players might find it more difficult to justify. Many experts agree the chances of such IPR patent challenges are small, while the cost of a wholesale agreement revision would be great.

At the same time, a prospective employee could make job acceptance conditional on the contract having a clause that protects his or her right to launch an IPR challenge in the future under certain conditions.

The balance of interests requires a clear understanding of risks and rewards. And in that regard, in either circumstance, wisdom would emphasize the value of having an experienced attorney examine the situation.

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