Palo Alto-based StemCells filed a second lawsuit last week in a California federal court against Neuralstem alleging infringement of two patents related to human neural stem cells, reported the Associated Press. 

StemCells issued a press release following the filing of its complaint, which described the nature of its suit as follows:

The California action alleges that Neuralstem and its two founders infringed the Company’s U.S. Patent No. 7,115,418 (methods of proliferating human neural stem cells) and its recently issued U.S. Patent Number 7,361,505 (neural stem cell compositions of matter).  The two patents had not previously been asserted by StemCells against Neuralstem and are not part of the pending Maryland litigation initiated by StemCells in 2006, which is currently on hold by court order.   Further, the California action alleges that Neuralstem has engaged in a campaign of misinformation about StemCells’ patents and proceedings before the U.S. Patent Office.  StemCells is seeking compensatory and enhanced damages as well as injunctive relief.  

According to the Associated Press, StemCells previously filed another lawsuit against Neuralstem alleging infringement of two different patents, and Neuralstem just last week filed suit against StemCells in the same Maryland court seeking to invalidate one of the StemCells patents and alleging that StemCells committed fraud and misconduct in gaining that patent.  The Maryland case is currently on hold pending reexamination of the patents.

It goes without saying that the parties appear headed for a long and heated patent battle.  The California Biotech Law Blog will keep you posted on the legal developments as the suit  progresses.

Palo Alto-based StemCells filed a second lawsuit last week in a California federal court against Neuralstem alleging infringement of two patents related to human neural stem cells, reported the Associated Press. 

StemCells issued a press release following the filing of its complaint, which described the nature of its suit as follows:

The California action alleges that Neuralstem and its two founders infringed the Company’s U.S. Patent No. 7,115,418 (methods of proliferating human neural stem cells) and its recently issued U.S. Patent Number 7,361,505 (neural stem cell compositions of matter).  The two patents had not previously been asserted by StemCells against Neuralstem and are not part of the pending Maryland litigation initiated by StemCells in 2006, which is currently on hold by court order.   Further, the California action alleges that Neuralstem has engaged in a campaign of misinformation about StemCells’ patents and proceedings before the U.S. Patent Office.  StemCells is seeking compensatory and enhanced damages as well as injunctive relief.  

According to the Associated Press, StemCells previously filed another lawsuit against Neuralstem alleging infringement of two different patents, and Neuralstem just last week filed suit against StemCells in the same Maryland court seeking to invalidate one of the StemCells patents and alleging that StemCells committed fraud and misconduct in gaining that patent.

It goes without saying that the parties appear headed for a long and heated patent battle.  The California Biotech Law Blog will keep you posted on the legal developments as the suit progresses.

The U.S. Supreme Court has postponed making a decision on whether or not to grant review on a case challenging the right of universities to enforce their own patent rights whileremaining immune from patent infringement lawsuits by private companies, reported Bernadette Tansey for SFGate.  The Court is requesting input from the Bush Administration legal representative before making a decision.

SFGate reported on the case as follows:

The plaintiff in the case, Biomedical Patent Management Corp., is asking the high court for a sweeping decision that would strip California’s immunity to patent infringement suits on grounds that the University of California routinely submits to federal court jurisdiction when it pursues damages and settlements from the private sector for alleged violations of its own patent rights. UC’s use of the patent system amounts to a waiver of the state’s immunity, the company maintains.

That argument was rejected by a San Francisco trial court judge and a federal appellate court, which cited prior Supreme Court rulings upholding the immunity of states from federal suit. That "sovereign immunity" of the states is based on the 11th Amendment of the U.S. Constitution, which limits the authority of the federal government over the states.

Each side to this case interpreted the action by the Court to seek Bush Administration input on the issue differently.  SF Gate reported:

[Andrew Dhuey, an attorney for the plaintiff] said the Supreme Court’s request for advice from the U.S. solicitor general on the case is "a very positive development."

"To be in the situation we’re in has drastically shortened the odds" that the high court will take up the case, Dhuey said.

Supervising Deputy Attorney General Karin Schwartz, who represents the state in the case, said the high court’s action may only mean that a few justices wanted additional information. The Supreme Court could deny review even if the solicitor general recommends it, she said.

This case, of course, raises an interesting public policy question: should universities be able to sue when they can’t themselves be sued by the same party they are suing?  While of course there is an argument that a state university is for the public good and is funded with taxpayer dollars, and therefore should be immune, but at the same time it seems fundamentally unfair and to permit the same immune institution to enforce its own intellectual property rights against third party private companies.  Aren’t technology transfer offices essentially acting as commercial institutions  engaging in commercial activities when they enter into licensing and other related transactions with private companies? Shouldn’t they be governed by the same rules as private companies?

I would be interested in hearing blog reader thoughts on this issue.  If you have an opinion that you would like to share, please write me and I’ll make your remarks available to all blog readers.

A new biotech infringement decision as issued this week by the U.S. Court of Appeals for the Federal Circult, which ruled in favor of ViaCell against Pharmastem in PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Circuit 2007).

The press release issued by ViaCell following the ruling stated as follows:

The Federal Circuit upheld an earlier decision by the U.S. District Court for the District of Delaware that ViaCell, through its marketing of ViaCord®, a product offering through which families can preserve their baby’s umbilical cord blood at the time of birth for possible future medical use, does not infringe PharmaStem’s U.S. Patent No. 5,192,553 (‘553) and U.S. Patent No. 5,004,681 (‘681), which relate to certain aspects of collection, cryopreservation, storage and use of hematopoietic stem cells from umbilical cord blood. The court also found the ‘553 and the ‘681 patents invalid based on prior art.

Peter Zura’s 271 Patent Blog discussed the infringement issues:

One of the sticking points in the litigation was language in the claims that required that the recited composition contained stem cells “in an amount sufficient to effect hematopoietic reconstitution of a human adult.”

Each of the defendants are in the business of servicing families with newborn infants in which blood from the infant’s umbilical cord is collected and cryopreserved for possible later use. The problem was that PharmaStem could not show enough evidence that the defendants’ cord blood contained a “sufficient” supply of stem cells to effect successful reconstitution of an adult. An expert provided testimony based on the defendants’ marketing materials, but did not consider any data regarding the composition of the cord blood units. Accordingly, the expert’s testimony was excluded.

In a more interesting move, the CAFC also determined that the method claims could not be infringed because all the steps were not performed by the same party – the defendants were responsible for collecting and cryopreserving cord blood samples, while transplant physicians unrelated to the defendants thawed the cord blood and used it for transplanting. Also, since the defendants never “owned” the blood, there was no contributory infringement. . .

Patent Docs further addressed the obviousness issues:

In finding there was not substantial evidence, the Federal Circuit stated that the obviousness standard required a “reason” the skilled worker would make the claimed device or carry out the claimed process, and have a reasonable expectation of success in doing so.  The Court found strong evidence in the prior art that the first prong of this test was satisfied.  As to the second prong, the Federal Circuit was not persuaded by evidence that it was unknown in the art that cord blood contained hematopoietic stem cells.  The Court cited portions (as characterized by Judge Newman’s dissent, by “simply reweigh[ing] selectively extracted evidence”) of the art to show that cord blood was known to contain such stem cells.  It appears that the Federal Circuit interpreted the art based on its understanding that the existence of progenitor cells in the blood was evidence for underlying stem cells, although elsewhere in the opinion the Court appears to conflate the two cell types.  The Federal Circuit’s explication of the biological underpinnings suggests that it believed that a production of such progenitor cells was accompanied by persistence (and thus the presence of) stem cells in the blood.  In discounting PharmaStem’s expert testimony, the Court relied upon what it considered contrary statements made by the inventors, and refused to credit the expert’s explanation that the cited art used the term “stem cell” inaccurately.

Patently O described the rationale for the decision:

Invention is Obvious: When asserting obviousness based on a combination of prior art references, the patent challenger must show that a PHOSITA “[1] would have had reason to attempt to … carry out the claimed process, and [2] would have had a reasonable expectation of success in doing so.”

Reason to attempt: In view of the prior art references, the first part of that test is plainly satisfied here. The idea of using cryopreserved cord blood to effect hematopoietic reconstitution was not new at the time [of filing]. Two of the prior art references…suggest using cord blood for that purpose. Two others…suggest cryopreservation and storage of the cord blood until needed. Accordingly, this is not a case in which there is any serious question whether there was a suggestion or motivation to devise the patented composition or process.

Expectation of Success: The inventors appear to have conclusively proven that umbilical cord blood is capable of hematopoietic reconstitution.  Unfortunately for them, completing a proof is not necessarily inventive. Rather, prior scientists strong suspicion of the capability creates an expectation of success so strong that “no reasonable jury” could find the patent valid.

While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution—and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.