Mentor Graphics Corporation v. Eve-Usa, Inc.

United States Court of Appeals
for the Federal Circuit
______________________

MENTOR GRAPHICS CORPORATION,
AN OREGON CORPORATION,
Plaintiff-Cross-Appellant

v.

EVE-USA, INC., A DELAWARE CORPORATION,
SYNOPSYS EMULATION AND VERIFICATION
S.A.S., FORMED UNDER THE LAWS OF FRANCE,
SYNOPSYS, INC., A DELAWARE CORPORATION,
Defendants-Appellants
______________________

2015-1470, 2015-1554, 2015-1556
______________________

Appeals from the United States District Court for the
District of Oregon in Nos. 3:10-cv-00954-MO, 3:12-cv-
01500-MO, 3:13-cv-00579-MO, Judge Michael W.
Mosman.
______________________

ON PETITION FOR REHEARING EN BANC
______________________

MARK E. MILLER, O’Melveny & Myers LLP, San Fran-
cisco, CA, filed a response to the petition for plaintiff-
cross-appellant. Also represented by ANNE E. HUFFSMITH,
LUANN LORAINE SIMMONS.

E. JOSHUA ROSENKRANZ, Orrick, Herrington & Sut-
cliffe LLP, New York, NY, filed a petition for rehearing en
2 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

banc for defendants-appellants. Also represented by
DANIEL A. RUBENS, ANDREW D. SILVERMAN; ROBERT M.
LOEB, ERIC SHUMSKY, Washington, DC; VICKI L. FEEMAN,
TRAVIS JENSEN, SCOTT T. LONARDO, Menlo Park, CA;
WILLIAM H. WRIGHT, Los Angeles, CA; INDRA NEEL
CHATTERJEE, Goodwin Procter LLP, Menlo Park, CA.

ERIC E. BENSEN, Garden City, NY, as amicus curiae.

PHILLIP R. MALONE, Stanford Law School, Stanford,
CA, for amici curiae Public Knowledge and Jeremy W.
Bock, et al. Also represented by JEFFREY THEODORE
PEARLMAN.
______________________

Before PROST, Chief Judge, NEWMAN, LOURIE, DYK,
MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN,
HUGHES, and STOLL, Circuit Judges.
STOLL, Circuit Judge, with whom NEWMAN, MOORE,
O’MALLEY, REYNA, and WALLACH, Circuit Judges, join,
concurring in the denial of rehearing en banc.
DYK, Circuit Judge, with whom HUGHES, Circuit Judge,
joins, dissenting from the denial of rehearing en banc.
MOORE, Circuit Judge, with whom CHEN, Circuit Judge,
joins, concurring in the denial of panel rehearing.
PER CURIAM.
ORDER
Appellants EVE-USA, Inc., Synopsys Emulation and
Verification S.A.S., and Synopsys, Inc. filed a petition for
rehearing en banc. A response to the petition was invited
by the court and filed by the cross-appellant Mentor
Graphics Corporation. Two motions for leave to file amici
curiae briefs were also filed and granted by the court.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 3

The petition, response, and briefs of amici curiae were
referred to the panel that heard the appeal, and thereaf-
ter were referred to the circuit judges who are in regular
active service. A poll was requested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
The petition for panel rehearing is denied.
The petition for rehearing en banc is denied.
The mandate of the court will be issued on September
8, 2017.
FOR THE COURT

September 1, 2017 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
 United States Court of Appeals
for the Federal Circuit
______________________

MENTOR GRAPHICS CORPORATION,
AN OREGON CORPORATION,
Plaintiff-Cross-Appellant

v.

EVE-USA, INC., A DELAWARE CORPORATION,
SYNOPSYS EMULATION AND VERIFICATION
S.A.S., FORMED UNDER THE LAWS OF FRANCE,
SYNOPSYS, INC., A DELAWARE CORPORATION,
Defendants-Appellants
______________________

2015-1470, 2015-1554, 2015-1556
______________________

Appeals from the United States District Court for the
District of Oregon in Nos. 3:10-cv-00954-MO, 3:12-cv-
01500-MO, 3:13-cv-00579-MO, Judge Michael W.
Mosman.
______________________

STOLL, Circuit Judge, with whom NEWMAN, MOORE,
O’MALLEY, REYNA, and WALLACH, Circuit Judges, join,
concurring in the denial of rehearing en banc.
2 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

Because the panel’s decision is consistent with long-
standing patent law damages principles, 1 I concur in the
denial of rehearing en banc.
We have consistently held that where an infringing
product is a multi-component product with patented and
unpatented components, apportionment is required.
See VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326
(Fed. Cir. 2014) (“No matter what the form of the royalty,
a patentee must take care to seek only those damages
attributable to the infringing features.”); Commonwealth
Sci. & Indus. Research Org. v. Cisco Sys., Inc., 809 F.3d
1295, 1301 (Fed. Cir. 2015) (“[D]amages awarded for
patent infringement ‘must reflect the value attributable to
the infringing features of the product, and no more.’”)
(quoting Ericsson, Inc. v. D–Link Sys., Inc., 773 F.3d 1201,
1226 (Fed. Cir. 2014)); Ericsson, 773 F.3d at 1226
(“[A]pportionment is required even for non-royalty forms
of damages.”). The apportionment requirement dates
back to Garretson v. Clark, 111 U.S. 120 (1884), where the
Supreme Court held that “[t]he patentee . . . must in
every case give evidence tending to separate or apportion
the defendant’s profits and the patentee’s damages be-
tween the patented feature and the unpatented features.”
Garretson, 111 U.S. at 121.
Garretson, however, also holds that damages for pa-
tent infringement may be based on the value of the entire
infringing product if the patentee can show that “the
entire value of the whole machine . . . is properly and
legally attributable to the patented feature.” Id. In other

1 I also believe the panel decision to be consistent
with long-standing damages principles in property, tort
and contract. I do not agree with the dissent that there
should be a special rule for damages in patent cases which
is at odds with mainstream damages principles.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 3

words, “[i]f it can be shown that the patented feature
drives the demand for an entire multi-component product,
a patentee may be awarded damages as a percentage of
revenues or profits attributable to the entire product.”
LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d
51, 67 (Fed. Cir. 2012).
In this case, on the question of lost profits, the jury
was instructed to consider the Panduit factors, including
“demand for the patented product” (factor one) and an
“absence of acceptable noninfringing substitutes” (factor
two). See Panduit Corp. v. Stahlin Bros. Fibre Works,
Inc., 575 F.2d 1152, 1156 (6th Cir. 1978). As the panel
recognized, these two factors together “consider[] demand
for the patented product as a whole” and “consider[]
demand for particular limitations or features of the
claimed invention.” Mentor Graphics Corp. v. EVE-USA,
Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) (citing DePuy
Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d
1314, 1330–31 (Fed. Cir. 2009)). As the panel noted, the
jury found that “Intel would not have purchased the
[infringing] Synopsys emulator system without the two
patented features and that there were no other alterna-
tives available.” Id. at 1287. This undisputed fact finding
established that Mentor proved that the patented features
were what imbued the combined features that made up
the emulator with marketable value. Under these cir-
cumstances, further apportionment is unnecessary. See
Ericsson, 773 F.3d at 1227 (“[W]here the entire value of a
machine as a marketable article is ‘properly and legally
attributable to the patented feature,’ the damages owed to
the patentee may be calculated by reference to [the entire
value of the machine.]” (quoting LaserDynamics, 694 F.3d
at 67); VirnetX, 767 F.3d at 1326. Whether one views this
in terms of what imbues value to the ultimate combina-
tion of features or what is a driver of demand for those
combined features, the result is the same: the appor-
tionment required by Garretson is satisfied.
4 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

In my view, the dissent mischaracterizes the panel’s
holding in this case, suggesting the panel held that in all
cases where lost profits are awarded, apportionment is
not required. Dissent Op. 1. To the contrary, the panel
made clear that apportionment is typically necessary in
both reasonable royalty and lost profits analyses. See
Mentor Graphics, 851 F.3d at 1287–88. Under the narrow
facts of this case, however, the panel determined that
because the Panduit factors are satisfied, the damages
award properly accounted for apportionment. I do not
read the panel’s decision to apply broadly to all lost profits
analyses.
Accordingly, based on the jury’s undisputed fact find-
ings on the Panduit factors in this case, I agree with the
panel that Mentor properly accounted for apportionment
of lost profits between the patented and unpatented
features of the infringing emulator system. For this
reason, I concur in the denial of rehearing en banc.
 United States Court of Appeals
for the Federal Circuit
______________________

MENTOR GRAPHICS CORPORATION,
AN OREGON CORPORATION,
Plaintiff-Cross-Appellant

v.

EVE-USA, INC., A DELAWARE CORPORATION,
SYNOPSYS EMULATION AND VERIFICATION
S.A.S., FORMED UNDER THE LAWS OF FRANCE,
SYNOPSYS, INC., A DELAWARE CORPORATION,
Defendants-Appellants
______________________

2015-1470, 2015-1554, 2015-1556
______________________

Appeals from the United States District Court for the
District of Oregon in Nos. 3:10-cv-00954-MO, 3:12-cv-
01500-MO, 3:13-cv-00579-MO, Judge Michael W.
Mosman.
______________________

DYK, Circuit Judge, with whom HUGHES, Circuit Judge,
joins, dissenting from the denial of rehearing en banc.
I respectfully dissent from the court’s decision to not
rehear this case en banc. In my view, the panel decision
here improperly holds that when lost profits are awarded
for patent infringement, there is no requirement for
apportionment between patented and unpatented fea-
tures, contrary to longstanding Supreme Court authority.
2 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

For over a century, it has been established by both the
decisions of the Supreme Court and this court that
awards of lost profits or reasonable royalties for patent
infringement must be apportioned between patented and
unpatented features. See, e.g., Dowagiac Mfg. Co. v. Minn.
Moline Plow Co., 235 U.S. 641, 646–48 (1915); Dobson v.
Hartford Carpet Co., 114 U.S. 439, 443–44 (1885); Blake
v. Robertson, 94 U.S. (4 Otto) 728, 733–34 (1876); Garret-
son v. Clark, 111 U.S. 120, 121 (1884); Seymour v.
McCormick, 57 U.S. (16 How.) 480, 489–90 (1853); Erics-
son, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1226 (Fed.
Cir. 2014). Indeed, the panel opinion acknowledges that
“apportionment is . . . necessary in both reasonable royal-
ty and lost profits analysis.” Mentor Graphics Corp. v.
EVE-USA, Inc., 851 F.3d 1275. 1287 (Fed. Cir. 2017). At
the same time, the case law is also clear that any award of
lost profits is not appropriate unless the patentee estab-
lishes that it would have sold the item but for the in-
fringement. See, e.g., Grain Processing Corp. v. Am.
Maize-Prods. Co., 185 F.3d 1341, 1349 (Fed. Cir. 1999).
This but-for requirement is encapsulated in the first and
second Panduit factors, which are “demand for the pa-
tented product” and the “absence of acceptable noninfring-
ing substitutes,” i.e., alternatives that could have
prevented the patentee from itself making the sale. 1

1 In Panduit Corp. v. Stahlin Bros. Fibre Works,
Inc., 575 F.2d 1152 (6th Cir. 1978), the Sixth Circuit held
that a patentee can recover lost profits only if it can prove
“(1) demand for the patented product, (2) absence of
acceptable noninfringing substitutes, (3) his manufactur-
ing and marketing capability to exploit the demand, and
(4) the amount of the profit he would have made.” Id. at
1156. However, Panduit did not deal with apportionment
since the patent in Panduit is directed to an electrical
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 3

The panel here holds that applying the first and sec-
ond Panduit factors results in the required apportion-
ment. See Mentor, 851 F.3d at 1285 (“[T]he absence of
non-infringing alternatives ties lost profit damages to
specific claim limitations and ensures that damages are
commensurate with the value of the patented features.”).
But calling the first and second Panduit factors appor-
tionment “ignore[s] the ancient wisdom that calling a
thing by a name does not make it so.” City of Madison,
Joint Sch. Dist. No. 8 v. Wis. Emp. Relations Comm., 429
U.S. 167, 174 (1976). In my view, the panel opinion simply
does not apportion—even though it purportedly recogniz-
es apportionment’s importance.
The panel cites cases from the Supreme Court and
other circuits holding that but-for causation is necessary
both for lost profits generally and for an award of lost
profits damages in the patent area. See Mentor, 851 F.3d
at 1283-84 (citing, inter alia, Aro Mfg. Co. v. Convertible
Top Replacement Co., 377 U.S. 476 (1964) and Livesay
Window Co. v. Livesay Indus., Inc., 251 F.2d 469 (5th Cir.
1958)). Cases outside the patent area shed little light on
this issue, since contracts and tort cases involving lost
profits generally do not require apportionment. Although
the patent cases relied upon by the panel hold that but-for
causation is required, none remotely suggests that but-for
causation and apportionment are the same thing. And
they are not.
Rather, the Supreme Court’s patent cases make quite
clear that more than but-for causation is required for
apportionment. The claimed damages must be appor-
tioned between patented and unpatented features. This
principle was established by Supreme Court cases involv-
ing both the disgorgement of the defendant’s profits

wiring duct that constituted the entire product in dispute.
Id. at 1155.
4 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

(allowed before 1946) and the recovery of the patentee’s
own lost profits (the current rule). As the panel recogniz-
es, both types of cases are pertinent because “the basic
principle of apportionment which they espouse applies in
all of patent damages.” Mentor, 851 F.3d at 1283 n.3.
In Seymour v. McCormick, the Court held that
one who invents some improvement . . . could not
claim that the profits of the whole [invention]
should be the measure of damages for the use of
his improvement. . . . [Likewise,] [w]hen he has
himself established the market value of his im-
provement, . . . he can have no claim . . . to make
the profits of the whole machine the measure of
his demand.
57 U.S. (16 How.) at 489–90. In Garretson v. Clark the
Court further explained that “[w]hen a patent is . . . not
for an entire[] . . . machine or contrivance, the patentee
must . . . give evidence tending to separate or apportion
the defendant’s profits . . . between the patented feature
and the unpatented features.” 111 U.S. at 121 (emphasis
added) (internal quotation marks omitted). And in Dobson
v. Hartford Carpet Co., the Court held that it was error to
conclude “that the price per yard allowed as damages was
the entire profit to the plaintiffs, per yard, in the manu-
facture and sale of carpets of the patented designs, and
not merely the value which the designs contributed to the
carpets.” 114 U.S. at 443–44. Finally, in Blake v. Robert-
son, the Court held that
[t]he complainant made a profit of forty dollars . . .
[on] the numerous machines he had sold. But in-
ventions covered by other patents were embraced
in those machines. It was not shown how much of
the profit was due to those other patents . . . . The
complainant was, therefore, entitled only to nomi-
nal damages. . . . It would have been error to give
more.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 5

94 U.S. (4 Otto) at 733–34. 2
So too does our own case law require apportionment
for lost profits recovery—particularly where, as here, the
patented feature is only part of the infringing product. In
Ericsson, we held that “apportionment is required even
for non-royalty forms of damages,” including lost profits.
773 F.3d at 1226 (citing Garretson, 111 U.S. at 121).
The panel decision is therefore directly contrary to
these cases, the logical foundation for which is readily
apparent. Thus, for example, even if “but for” a patented
feature the item would not have been purchased, it could
be equally true that but for an unpatented feature (or a
feature covered by another patent) the item would not
have been purchased. Apportionment between features
covered by the asserted patents and other features makes
eminent sense. The panel makes no such apportionment.
Nor do the Panduit factors.

2 To be sure, Dobson and Garretson both also hold
that recovery for all of the profits for a product is permit-
ted if it can be shown that consumer demand is attributa-
ble to the patented feature. See Dobson, 114 U.S. at 444;
Garretson, 111 U.S. at 121. This rule has become known
as the entire market value rule. For the entire market
value rule to apply, “the patentee must prove that ‘the
patent-related feature is the “basis for customer de-
mand.”’” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d
1301, 1336 (Fed. Cir. 2009) (quoting Rite-Hite Corp. v.
Kelley Co., 56 F.3d 1538, 1549 (Fed. Cir. 1995)(en banc)).
When the entire market value rule applies, no apportion-
ment is required. LaserDynamics, Inc. v. Quanta Comput-
er, Inc., 694 F.3d 51, 67–68 (Fed. Cir. 2012). Here,
however, the panel opinion does not invoke the entire
market value rule, and the accused infringer was preclud-
ed by the district court from introducing evidence that the
entire market value rule is inapplicable. See J.A. 42,241.
6 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

Four other issues reinforce the appropriateness of en
banc review.
First, EVE-USA properly raised the issue of appor-
tionment in district court by seeking to present evidence
of apportionment, which the district court excluded. See
Appellant Br. 19–20; Appellee Br. 29–30 n.3. Specifically,
the district court sustained an objection to exclude the
appellant’s damages expert from presenting “a slide about
how other features of the sold products were important to
customers . . . [because] it is really just an apportionment
argument when it comes to lost profits.” J.A. 42,241. The
district court held that it is “not appropriate . . . to say
that 90 percent of the purchase price really had nothing to
do with the patented feature. That’s apportionment. You
can’t do that . . . on lost profits.” Id.
Second, in denying a post-trial motion for a new trial,
the district court recognized that its failure to apportion
was in error. The district court agreed that determining
lost profits is “a two-step process,” that satisfying the but-
for test of the Panduit factors is only step one, and that
“there was an error in the trial on that score” to subse-
quently not determine whether the entire value of the
product is attributable to the patented feature. J.A.
42,600. 3
Third, unlike the panel, the patentee did not suggest
that applying the Panduit factors is equivalent to appor-
tionment. Quite to the contrary, the patentee explicitly
argued that “the value of the patent is considered as part
of the ‘but for’ analysis, not in . . . apportionment,” Appel-
lee Br. 33, that “lost profits should not be apportioned,”
id. at 32, and that “apportioned lost profits can never
adequately compensate a patentee for sales lost as a

3 The district court deemed this error harmless.
J.A. 42,601.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 7

result of infringement,” id. at 30. In other words, the
panel’s effort to equate but-for causation and apportion-
ment is a new theory not even adopted by the patent
holder in this case.
Finally, apportionment is an important issue that will
likely arise in every future lost profits case.
*****
Respectfully, Judge Stoll’s opinion (joined by various
others) does nothing to rehabilitate the panel opinion.
First, the theory that the panel found the application of
the Panduit factors to be the same as the entire market
value rule is not tenable. Judge Stoll Concurrence at 3–4.
The combination of consumer demand and but-for causa-
tion (i.e., that customers would not have purchased the
product without the two patented features) is not remote-
ly the same as the entire market value rule. Consumer
demand for the patented feature and but-for causation
may exist (and satisfy the Panduit factors), but this does
not mean that other features do not contribute to consum-
er demand. The entire market value rule only applies if
consumer demand is driven by the patented feature.
Consumer demand for the patented feature and but-for
causation do not establish that consumer demand is only
attributable to the patented feature. Consumer demand
may also be driven by other features in the product, which
may be just as necessary to purchasing decisions, leading
to the required apportionment. The panel never says or
even suggests that the Panduit factors and the entire
market value rule are the same. And the accused infring-
er here never had the opportunity to address the entire
market value rule on the facts of this particular case.
Second, Judge Stoll suggests that the dissent “mis-
characterizes” the majority opinion by suggesting that it
does not require apportionment when it does. To be sure,
the panel says that it is requiring apportionment. But in
fact it does not. Instead, it equates consumer demand and
8 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

but-for causation with apportionment, contrary to the
clear holding of the Supreme Court that the apportion-
ment must be between patented and unpatented features,
an apportionment that the panel here rejects. Since the
factual findings necessary to satisfy the Panduit factors
are a necessary predicate for lost profits, the result here is
that true apportionment will never be required for lost
profits.
I respectfully dissent from the court’s decision to not
rehear this case en banc.
 United States Court of Appeals
for the Federal Circuit
______________________

MENTOR GRAPHICS CORPORATION,
AN OREGON CORPORATION,
Plaintiff-Cross-Appellant

v.

EVE-USA, INC., A DELAWARE CORPORATION,
SYNOPSYS EMULATION AND VERIFICATION
S.A.S., FORMED UNDER THE LAWS OF FRANCE,
SYNOPSYS, INC., A DELAWARE CORPORATION,
Defendants-Appellants
______________________

2015-1470, 2015-1554, 2015-1556
______________________

Appeals from the United States District Court for the
District of Oregon in Nos. 3:10-cv-00954-MO, 3:12-cv-
01500-MO, 3:13-cv-00579-MO, Judge Michael W.
Mosman.
______________________

MOORE, Circuit Judge, with whom CHEN, Circuit Judge,
joins, concurring in the denial of panel rehearing.
Synopsys, Inc., Synopsys Emulation and Verification
S.A.S., and EVE-USA, Inc. (“EVE”) (collectively, “Synop-
2 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

sys”) 1 petition for rehearing, arguing our court should
abolish assignor estoppel. We recognize that assignor
estoppel may arise in multiple fact patterns, each of
which would result in a unique balancing of the equities.
We may be inclined to reconsider the breadth of the
doctrine of assignor estoppel, but this case is not a proper
vehicle to do so. Synopsys devoted approximately one
page of its brief to this court to the issue of assignor
estoppel where it argued nothing other than we should
eliminate the doctrine because in Lear, Inc. v. Adkins, 395
U.S. 653 (1969), the Supreme Court “demolished the
doctrinal underpinnings of assignor estoppel.” Synopsys
Br. 42. Synopsys’ petition for rehearing was no more
detailed. In a little over two pages it argues that the
doctrine of assignor estoppel should be abolished. Synop-
sys PFR Br. 13–15.
To be clear, Synopsys has made no arguments to this
court regarding the scope of the assignor estoppel doctrine
or its applicability to this particular case. For example, it
makes no arguments in any briefing that applying the
doctrine to this case would be improper because of rules of
privity, the facts of this case, the nature of the employ-
ee/employer relationship, the nature of the compensation
conveyed for the assignment, or that the assignment was
not knowing or voluntary. It has asked this court to take
the case en banc to answer a binary question: abolish or
not. It has not argued that the doctrine is too broad as
applied in this case. Because we do not believe we can or
should eliminate the doctrine in its entirety, we decide not
to rehear this case.
An amicus brief (the “Professors Brief”) argues we
should rehear this case en banc because “there is no basis

1 EVE is a subsidiary of Synopsys. References to
Synopsys refer to all the Synopsys and EVE entities
unless otherwise noted.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 3

for expanding assignor estoppel outside the narrow cir-
cumstances addressed in the Supreme Court’s cases.”
Professors Br. 7. The Professors Brief does not argue that
we can or should abrogate assignor estoppel but rather
that our court has expanded it in ways which undermine
important public policy goals and interfere with employee
mobility. Id. at 5–7; see also Mark Lemley, Rethinking
Assignor Estoppel, 54 HOUS. L. REV. 513, 540–42 (2016)
(recognizing the wisdom of a continued role for the doc-
trine). There may someday be a case which argues these
points to this court (which Synopsys has not) and presents
a record which would allow us to consider these issues in
the context of an actual case, but this is not such a case.
The Professors Brief complains that the Federal Cir-
cuit has expanded privity notions beyond appropriate
bounds, 2 Professors Br. 5–7, and “has expanded the
doctrine beyond cases where an inventor knowingly and
voluntarily transfers a patent.” Id. at 6. The Professors
Brief does not suggest, nor does the party briefing sug-
gest, that any such expansion has occurred in this case.
Synopsys made arguments related to privity before the

2 The question of privity and the extent to which
assignor estoppel ought to prohibit a future employer of
the inventor/assignor from challenging the validity of the
patent is an interesting one not raised by the parties on
appeal in this case. This court has held that whether the
assignor estoppel doctrine ought to apply to a future
employer is a case specific determination that depends on
the equities and the nature of the employee’s role in the
new company. See, e.g., Shamrock Tech., Inc. v. Med.
Sterilization, Inc., 903 F.2d 789 (Fed. Cir. 1990). Given
that Synopsys has made no arguments at any stage of
this appeal challenging the extension of the inventor’s
assignor estoppel to it, this case does not provide a vehicle
for consideration of these privity issues.
4 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

district court, which it lost. And it chose not to appeal
those issues. As already explained, there is no dispute
presented to this court which causes us to consider
whether the equities in this case warrant application of
the assignor estoppel doctrine to Synopsys. We are not an
academic tribunal. Our job is to decide cases based on
their facts. And in this case, Synopsys did not argue
applying assignor estoppel to the facts of this case is
unjust, unfair, or in any manner inequitable.
Synopsys’ argument that we should eliminate assign-
or estoppel is foreclosed by Westinghouse, where the
Supreme Court held that an assignor could be estopped
from challenging the validity of a patent in certain situa-
tions. See Westinghouse Elec. & Mfg. Co. v. Formica
Insulation Co., 266 U.S. 342, 353 (1924). We are bound by
this precedent. Cf. Rodriguez de Quijas v. Shearson/Am.
Express, Inc., 490 U.S. 477, 484 (1989) (“If a precedent of
this Court has direct application in a case, yet appears to
rest on reasons rejected in some other line of decisions,
the Court of Appeals should follow the case which directly
controls, leaving to this Court the prerogative of overrul-
ing its own decisions.”).
In particular, the Supreme Court analogized assignor
estoppel to estoppel by deed in Westinghouse. 266 U.S. at
349–50; see also Gottfried v. Miller, 104 U.S. 21 (1881).
Estoppel by deed prevents the grantor from later denying
the truth of the deed. The Supreme Court applied this
principle from the law of real property to intellectual
property in Westinghouse:
The analogy between estoppel in conveyances of
land and estoppel in assignments of a patent right
is clear. If one lawfully conveys to another a pa-
tented right to exclude the public from the mak-
ing, using and vending of an invention, fair
dealing should prevent him from derogating from
the title he has assigned, just as it estops a gran-
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 5

tor of a deed of land from impeaching the effect of
his solemn act as against his grantee. The gran-
tor purports to convey the right to exclude others,
in the one instance, from a defined tract of land,
and in the other, from a described and limited
field of the useful arts.
Westinghouse, 266 U.S. at 350. Thus, the Supreme Court
has endorsed at least one application of assignor estoppel,
and we are therefore precluded from doing away with the
doctrine in its entirety.
Synopsys’ primary criticism of assignor estoppel is
that fifty years ago the Supreme Court eliminated licen-
see estoppel in Lear, and according to Synopsys, the same
logic ought to result in the elimination of assignor estop-
pel. In Lear, the Supreme Court ultimately held that the
public interest in the free use of ideas in the public do-
main outweighed the unfairness of potentially depriving
the licensor of the full value of his contractual rights. Id.
at 670–71. However, the issue of assignor estoppel was
not squarely before the Court in Lear.
When an inventor/assignor assigns his patent rights
to someone else for value, he may make an implicit repre-
sentation that what he sold has value. See Diamond
Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224–25
(Fed. Cir. 1988). This implicit representation may war-
rant application of assignor estoppel. Id. at 1225. A
licensee has not made a similar representation. The
licensee did not sell the patent itself to the licensor. The
licensee did not sign oaths or declarations or make asser-
tions implicitly or explicitly about the patent’s validity
before inducing another to make an investment based on
the perceived worth of the patent. Thus, the Supreme
Court’s abolition of licensee estoppel in Lear does not
directly bear on the continued vitality of assignor estop-
pel. Diamond Scientific, 848 F.3d at 1224 (“Unlike the
licensee, who, without Lear might be forced to continue to
6 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.

pay for a potentially invalid patent, the assignor who
would challenge the patent has already been fully paid for
the patent rights.”).
Because the record in this case and the arguments put
forth by the parties do not convince us that we can or
should entirely abolish the doctrine of assignor estoppel,
we decide not to rehear this case.