Saturday, April 16, 2016

Professor Mark Lemley - Rethinking Assignor Estoppel - A Comment

In Rethinking Assignor Estoppel, Professor Mark Lemley argues assignor estoppel interferes with invalidating bad patents and employee mobility. I don't completely agree with Professor Lemley, but think this article is definitely worth reading.

Assignor estoppel bars an inventor who has assigned a patent from challenging its validity in a patent infringement suit. It is an issue an employee may face after filing a patent application(s) at a company and leaving for a competitor. The article argues that assignor estoppel should be granted less often in patent infringement cases.

As stated in the abstract, assignor estoppel may not make complete sense: "The Supreme Court and the Federal Circuit have repeatedly emphasized the public interest in testing the validity of patents, weeding out patents that should not have been issued. But there is one important group of people the law systematically prevents from challenging bad patents. Curiously, it is the very group patent law is supposed to support: inventors themselves. The century-old doctrine of assignor estoppel precludes inventors who file patent applications from later challenging the validity or enforceability of the patents they receive. The stated rationale for assignor estoppel is that it would be unfair to allow the inventor to benefit from obtaining a patent and later change her tune and attack the patent when it benefits her to do so. The Supreme Court has traditionally disfavored the doctrine, reading it narrowly. But the Federal Circuit has expanded the doctrine in a variety of dimensions, and applied it even when the benefit to the inventor is illusory. Further, the doctrine misunderstands the role of inventor-employees in the modern world. 

More important, the expansive modern form of assignor estoppel interferes substantially with employee mobility. Inventors as a class are put under burdens that we apply to no other employee. If they start a company, or even go to work for an existing company in the same field, they will not be able to defend a patent suit from their old employer. The result is a sort of partial noncompete clause, one imposed without even the fiction of agreement and one that binds anyone the inventor comes in contact with after leaving the job. Abundant evidence suggests that noncompetes in general retard innovation and economic growth, and several states prohibit them outright, while all others limit them. But assignor estoppel is a federal law doctrine that overrides those state choices.

It is time to rethink the doctrine of assignor estoppel. I describe the doctrine, its rationale, and how it has expanded dramatically in the past 25 years. I argue that the doctrine is out of touch with the realities of both modern inventing and modern patent law, and that it interferes with both the invalidation of bad patents and the goal of employee mobility. Should the Supreme Court take up the doctrine, it is unlikely to survive in its current form. Rather, it should – and will – return to its much more limited roots."

Yes, assignor estoppel may give an overly generous shield against a challenge to patent validity. and why bar a challenge to patent validity when an inventor's awareness of the prior art is many times incomplete when signing the inventor declaration? However, the argument that assignor estoppel substantially interferes with employee mobility seems like a real stretch.

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