Neuralstem strikes back in patent suit Seeks to reopen litigation to combat plaintiff claims BRENDAN KEARNEY Daily Record Legal Affairs Writer May 6, 2008 7:42 PM Stung by stock losses that followed a competitor news release, a Rockville biotech company is fighting back with an unusual move in court.
Neuralstem Inc., which was sued for patent infringement by California-based StemCells Inc., has asked a judge who put the case on hold last year to now let it go forward.
It a move that Neuralstem technically had no right to make under the terms of the court order, but one the company says is necessitated by “incorrect public statements made by StemCells after the U.S. Patent and Trademark Office approved amended versions of two of the four patents involved in the litigation.
“We basically calling their bluff Richard Garr, president of Neuralstem, said of Tuesday filing in U.S. District Court in Greenbelt. “We had no choice but to go public with it and demonstrate that not the case.
In its April 15 news release, StemCells characterized the amendments as “minor and said the patent office approval “preserves intact the basis of our infringement action against Neuralstem.
Neuralstem stock price, which opened that day at $2.25, closed at $1.77 on heavy trading, according to financial reports.
StemCells CEO Martin McGlynn did not return calls seeking comment. David Barmak, an attorney for StemCells, declined to comment.
Neural stem cells
The patents concern the cultivation of stem cells and their transplantation to treat degenerative conditions in humans.
In its motion, Neuralstem notes several “substantial amendments that StemCells made to its patent claims in order to secure approval upon re-examination, including additional language that specifies the cells destination host be human. (continued in part II)
A company that is run by lawyers just keeps suing and wasting time, if they are so sure of technology produce some results. Instead they have people just pump pump the stock on the message boards. They must feel very theatened .
Includes study conducted at J Hopkins with stunning survival and integration of neural stem cells in animal model of ALS. (Koliatsos)
Includes UCSD study that had multiple successes treating paralyzed rats made them walk while the control group did not recover at all. (Marsala)
Eva Feldman and the Taubman Foundation for ALS signed on to Neuralstem cells to treat ALS. Why did this premier ALS researcher and the Taubman foundation settle on CUR cells when they had years to try to make STEM Inc cells work? Excellent question.
CJ the Korean giant ($8B /year revenues) signed on with CUR cells.....why not STEM Inc cells? Again excellent question.
The litigation was initiated again and again by STEM Inc and it will be ended by Neuralstem. A shame STEM believed they had to bully and litigate their way to a viable business in possibly a below board way but it's probably just an indication of their troubles which in my opinion are starting to become apparent.
Due to these changes, any infringement claims alleged under the old patents must fail as a matter of law, Neuralstem argues in the motion.
“They trying to assert that they own the whole neural stem cell world, Garr said, denying his company techniques are claimed by StemCells patents. “Their cells, I could list 11 different characteristics that are different, from how they grow them to what they do with them after they get them.
StemCells filed its infringement suit in July 2006. Neuralstem filed a motion to dismiss the case that October and then counterclaimed, alleging StemCells patents were invalid and that its suit constituted sham litigation in violation of the Sherman Antitrust Act.
In February 2007, the Patent and Trademark Office ordered re-examination of two of the four patents implicated in the litigation, and that May, the office ordered the re-examination of the remaining two. Both sides then asked U.S. District Judge Alexander Williams Jr. to stay the case pending the outcome of the re-examinations.
Williams did so in June 2007, giving StemCells the right to seek to restart the proceedings.
In its motion Tuesday to reopen the case and lift the stay, Neuralstem argues that Williams issued the stay to give the patent office time to re-examine the patents, that the re-examinations are nearly finished and that they shown the basis of the lawsuit to be invalid.
The first two re-examinations triggered StemCells news release, and the other two notices are likely forthcoming because the claim amendments for those patents were similar and “were made to allegedly distinguish over the same prior art, wrote Sanjay K. Murthy, an attorney for Neuralstem, who deferred to Garr for comment.
“Because the reexamination is almost complete for the patents-in-suit, the stay in this case should be lifted, wrote Murthy, of Bell, Boyd & Lloyd in Chicago. “Lifting the stay will allow Neuralstem to file motions for summary judgment that will dispose of all of StemCells claims for damages or injunctive relief.
Garr said he expects the motion to be “completely dispositive of the case, including Neuralstem counterclaims.
Both Neuralstem and StemCells use brain and spinal cord stem cells derived from fetuses. StemCells has begun human testing for its first product candidate, a treatment for a pediatric neurodegenerative disorder called Batten disease.
Pending approval from the Food and Drug Administration, Neuralstem plans to conduct human clinical trials later this year for stem-cell transplantations meant to treat amyotrophic lateral sclerosis (ALS), sometimes called Lou Gehrig Disease.