Assignor Estoppel & Inter-Partes Review: Arista Networks, Inc. v. Cisco Systems, Inc.

Posted on 11/13/2018 by William Reid, in Articles, News and Events, Patent Related Court Rulings

Arista Networks, Inc. (Arista) petitioned for an IPR of Cisco Systems, Inc.’s (“Cisco”) patent, U.S. 7,340,597, relating to protecting computer network systems from outside attack using a logging module.[1] Claims 1 and 29 are as follows:

1.An apparatus comprising:
a communications device comprising:
a subsystem; and
a logging module, coupled to said subsystem, and configured to detect a change to a configuration of said subsystem of said communications device, and communicate information regarding said change to said configuration of said subsystem of said communications device.

29.The communications device of claim 1, wherein the logging module is configured to communicate the change to the configuration of the subsystem by broadcasting the change to the configuration of the subsystem.

The Board upheld some claims and invalidated others.[2] Arista appealed as to claim construction, Cisco cross-appealed as to failure to apply the doctrine of Assignor Estoppel.[3] With regard to the contested claim construction, the dispute revolved around the term “broadcasting,” with both parties rejecting the Board’s construction.[4] In the end, the Federal Circuit rejected all three constructions, and developed its own.[5] However, because the Board had performed its patentability analysis using the wrong construction, the Federal Circuit remanded the case to the Board and moved on to the issue of assignor estoppel.[6]

What is assignor estoppel? Well, assume the Acme Company employs a person who developed an improved device to affix human beings to railroad tracks. Let’s call the inventor, Snidely Whiplash (SW). The device is patented, and SW properly assigns the invention to Acme, but subsequently leaves Acme, and starts a new company called “D-Do-Right Track Supplies Inc.” (Do-Right). The doctrine of assignor estoppel stands for the notion that both SW and anyone in privity with him (e.g, Do-Right) is estopped from later claiming that what was assigned is invalid. Here, Dr. David Cheriton was the named inventor employed by Cisco at the time of the invention[7], so for the purposes of the scenario above is the embodiment of SW. Later Dr. Cheriton and other Cisco employees left Cisco and founded Arista.[8]

The Federal Circuit first evaluated whether the question of assignor estoppel can be reviewed under Cuozzo Speed Technologies v. Lee[9] and the en banc application of Cuozzo in Wi-Fi One, LLC v. Broadcom Corp.[10] Ultimately, the Federal Circuit found that it could review the Board’s decision as to whether §311(a) envisioned application of assignor estoppel.[11]

Looking to the merits of the assignor estoppel question, the Federal Circuit acknowledged Cisco’s argument that, as a well-established equitable doctrine, assignor estoppel should be applied absent a statutory indication to the contrary.[12] However, in reaching its decision, the Federal Circuit looked to the text of §311(a):

Section 311(a) states, in relevant part: “(a) In General. – Subject to the provisions of this chapter, 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….” §311(a) (emphasis added).[13]

The Federal Circuit thus found that the plain text of the statute precluded the use of assignor estoppel in IPR proceedings.[14]

One takeaway from this case, as suggested by Cisco, is that because the use of assignor estoppel is allowed in ITC proceedings and in district court, prohibiting them in the case of IPR’s invites a form of forum shopping.[15] This may be true, but the Federal Circuit found that it was the clear intention of Congress.[16] In any event, counsel planning on arguing assignor estoppel in a patent dispute should keep this in mind when deciding where the patent will be contested. Otherwise, they could find themselves mumbling, “Curses! Foiled Again!”

-William Reid

[1] Arista Networks, Inc., v. Cisco Systems, Inc., 2017-1525, 2017-1577, Slip op. at 2 (Fed. Cir. November 9, 2018).[2] Slip op. at 2.

[3] Slip op. at 2.

[4] Slip op. at 6.

[5] Slip op. at 11.

[6] Slip op. at 11.

[7] Slip op. at 4.

[8] Slip op. at 4.

[9] 136 S. Ct 2131 (2016)

[10] 878 F.3d 1364 (Fed. Cir. 2018) (en banc).

[11] Slip Op. at 16-17.

[12] Slip Op. at 19.

[13] Slip op. at 21.

[14] Slip op. at 23.

[15] Slip op. at 22.

[16] Slip op. at 22.


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