Neuralstem Accusation Touches Nerve with StemCells
By Donald Zuhn --
Earlier this week, we reported on two recently filed patent cases: the first by StemCells, Inc. against Neuralstem, Inc., asserting infringement of U.S. Patent Nos. 7,115,418 and 7,361,505, and the second being filed by Neuralstem, seeking a declaratory judgment of noninfringement, unenforceability, and invalidity of the '505 patent. The '505 patent, which is directed to multipotent neural stem cell compositions, was issued on April 22, 2008.
In a May 7th press release concerning its declaratory judgment filing, Neuralstem stated that StemCells "intentionally withheld crucial information highly material to the patentability of StemCells' 'new' patent," and did so with an intent to deceive the USPTO. In particular, Neuralstem asserts in its complaint that StemCells failed to disclose "pending litigation with Neuralstem, the reexaminations filed by Neuralstem, and the prior art cited in those reexaminations" (the litigation and reexaminations are discussed below). With respect to the prior art cited in the reexaminations, Neuralstem contended that the art was cited, but only after the issue fee for the '505 patent had been paid. Neuralstem President and CEO Richard Garr contended that while "it is clear that we are not infringing this patent, . . . the threatening statements in [StemCells'] press release of April 23rd leave the misleading impression that we would require a license from them as a result of the issuance of this patent," and "[n]othing could be further from the truth."
The newly filed cases do not mark the first time that the two companies have squared off in court. In 2006, StemCells filed suit against Neuralstem, asserting infringement of four other neural stem cell patents. Neuralstem responded to that suit by filing requests for ex parte reexamination of all four of the asserted patents. Last month, the U.S. Patent and Trademark Office issued a Notice of Intent to Issue an Ex Parte Reexamination Certificate for two of the four StemCells patents. The two companies quickly issued competing press releases asserting that the USPTO had upheld the patents with only minor changes (according to StemCells) or with "numerous substantial changes" (according to Neuralstem).
On May 6th, Neuralstem announced that it had filed a motion to reopen the 2006 lawsuit, which had been stayed pending the outcome of the reexamination proceedings. Neuralstem CEO Richard Garr contended that "the recent actions of the U.S. Patent Office now entitle [Neuralstem] to summary judgment in the case," and that "[c]ompletely contrary to the public statements made by StemCells, Inc., the Patent Office actions have destroyed the basis for the infringement suit filed by StemCells, Inc." In a May 12th press release, Neuralstem reiterated its position "that actions of the Patent Office have destroyed the basis for [StemCells'] infringement assertions against [Neuralstem]."
In response to Neuralstem's May 7th press release, StemCells issued its own statement, announcing that it had filed suit against Neuralstem in the Northern District of California with claims for patent infringement, libel, and unfair competition. In its statement, StemCells contended that "Neuralstem’s repeated false statements and public accusations over the past year, culminating in its allegations on the procurement of the ‘505 patent this month, together with its continued and willful infringement of StemCells’ intellectual property, necessitated the Company’s California action." In response to Neuralstem's assertion that StemCells was unwilling to reopen the 2006 (implying that the reexamination result had been less than favorable for StemCells), StemCells President and CEO Martin McGlynn stated that "[o]nce the reexaminations of all [four] patents have been fully settled, we will move to reopen the Maryland litigation and have our day in court." For now, it appears that the battle between the two companies is far from over.
For additional information about this and other related topics, please see:
• "Neuralstem Announces Grant of European Patent for Neural Stem Cells," April 30, 2008
• "StemCells Announces Issuance of Human Neural Stem Cell Patent," April 24, 2008
• "StemCells' Patents Survive Reexam -- StemCells and Neuralstem Differ on Extent of Changes," April 22, 2008
The U.S. Patent and Trademark Office filed a 
It is unlikely that the matter will be finally resolved
for several months, and quite possibly not until the change of
administration. Additionally, Judge
Cacheris made his decision on only one of several grounds raised by the
plaintiffs, Dr. Tafas and GlaxoSmithKline, making it likely that the Federal Circuit
will remand the case to the District Court for further proceedings. It is
unlikely that the injunction barring implementation of the rules will be lifted
before the District Court has ruled on these alternative grounds for relief.
In rendering its decision in 
Instead of granting a permanent injunction, Judge Young of the District of Massachusetts granted a preliminary injunction on February 28, 2008, based on his application of the rubrics set forth by the Supreme Court in eBay for granting injunctions in patent cases. In Amgen, Judge Young held that Amgen had clearly fulfilled three of the four factors mandated for consideration by the Supreme Court in eBay: Amgen's asserted claims were infringed and not invalid; Amgen's injury would not be adequately compensated merely with money damages; and the balance of the hardships weighed in favor of granting the injunction. However, the District Court did not decide in Amgen's favor as to the fourth prong, the public interest, particularly in view of Roche's representations of the advantages of its Mircera® product over Amgen's version of EPO (including inter alia less frequent dosing; see "
On March 20, Roche complied with the requirements the District Court imposed in order for the Court to consider lifting the injunction (see "
Innogenetics and Abbott have agreed to settle their dispute over Innogenetics' patented methods for genotyping HCV. Abbott will shell out $9.5 million, including on-going royalty payments for each test sold by Abbott.
We have previously discussed developments in the litigation between Innogenetics and Abbott over U.S. Patent 
Before Hoffmann-LaRoche filed its Notice of Appeal in the Court of Appeals for the Federal Circuit last week, appealing the preliminary injunction Judge William Young entered that prevents Roche from selling its Mircera® drug product (a form of recombinant EPO that has been covalently linked to polyethylene glycol), Roche filed a brief with the District Court regarding its interpretation of the Federal Circuit's recent decision in Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. This filing was in part a response to Amgen's brief, filed in the District Court on March 14th regarding the effect of the Federal Circuit's Pfizer decision on the propriety of the preliminary injunction and the underlying competence of Amgen's verdict that its claims are not invalid (see 
The argument is straightforward: the statute only encompasses divisional applications. This is in direct contradiction to Amgen's position, which was that this decision has no bearing on the District Court's decision that Amgen's patents-in-suit are not invalid under the judicially-created obviousness-type double patenting doctrine. Amgen argued that its applications were not CIPs, but continuations, and that the Pfizer decision was limited to precluding the § 121 safe harbor from encompassing CIP applications. Amgen also argued that its patents-in-suit were continuation applications in name only, and satisfied the conditions of the statute for benefiting from the safe harbor ("later application[s] carved out of a pending application," containing claims to "a distinct and independent invention" and "disclosing and claiming only subject matter disclosed in the earlier or parent application"). Roche's brief does not deign to address these contentions directly, taking the more direct route of asserting sub silentio that Amgen's arguments were irrelevant in the face of the Pfizer decision's simple holding.
Hoffmann-LaRoche has apparently given up its attempts to convince Judge William Young to lift an injunction preventing it from selling its Mircera® drug product (a form of recombinant EPO that has been covalently linked to polyethylene glycol), and has filed a Notice of Appeal with the Court of Appeals for the Federal Circuit.
On October 23, 2007, Amgen procured a jury verdict that Mircera® infringed several Amgen patents (see "
The District Court set five conditions that Roche needed to fulfill before it would lift the injunction, and Roche ultimately agreed to all the Court's conditions (see "
Last week, 
Under the terms of the settlement, Codon has granted Blue Heron a release with respect to past activity as well as a perpetual, fully-paid sublicense to continue to use error correction technology as currently employed in Blue Heron’s commercial gene synthesis activities. Additionally, Codon is to request that the Court dismiss the complaint with prejudice. No financial terms were disclosed.
On October 23, 2007, Amgen procured a jury verdict that Hoffman-LaRoche's Mircera® drug product infringed several Amgen patents. That verdict found Mircera® infringed claims 3, 7, and 8 of Amgen's U.S. Patent No. 
Since then, Amgen has moved in the District Court for a permanent injunction against Roche to prevent Mircera® from being sold in the U.S. until the last of Amgen's infringed patents has expired; Roche has opposed. Such an injunction is necessary to prevent Mircera® from going on the market, since the U.S. Food and Drug Administration last November 
The District Court also set forth five conditions that, if fulfilled by Roche, might persuade the Court to lift the injunction. First, Roche would pay Amgen a royalty of 22.5% (Amgen having already rejected an offer for a 20% royalty from Roche). Second, Roche could be introduced to the Medicare patient population at a cost no more than the average sales price of Amgen's EPO products (sold under the names Epogen® and Aranesp®) (a requirement that would prevent Roche from passing its royalty obligations onto patients, but would not prevent Roche from selling Mircera® at a bargain price relative to Epogen®). Third, Roche would have to provide clinical evidence to permit the Court to determine a "dosage conversion factor" between Mircera® and Epogen®. Fourth, Roche would pay for an independent agency to monitor sales and determine royalty payments owed to Amgen. Finally, Roche would agree to supply Mircera® to any patient needing it, at or below the authorized price (presumably, this is a provision that would prevent Roche from abandoning the Medicare market once it has entered it).
The Federal Circuit's decision in Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. (issued March 7, 2008; see 
Obtaining an injunction against an adjudged infringer has become much more difficult for patentees since the Supreme Court's decision in 
Nowhere, perhaps, is this difficulty illustrated more starkly than in the U.S. District Court for the District of Massachusetts (Judge William G. Young, presiding) concerning Amgen's motion for permanent injunction to prevent Roche from launching its Mircera® drug product. Amgen procured a jury judgment on October 23, 2007 that Mircera® infringed several Amgen patents. That verdict found Roche's Mircera® infringed claims 3, 7, and 8 of Amgen's U.S. Patent No. 
The District Court entered a preliminary injunction on February 28, 2008 foreclosing Roche from launching Mircera®; Roche had been 
Roche agreed to these conditions in its court filing last week (see "
It seems that these arguments did nothing to help the District Court come to a decision on whether it should modify its preliminary injunction. Instead, in an order entered today, the Court decided it needed to appoint a special master to consider the question of how dosing and pricing of Amgen's and Roche's products should be compared. This question is not related to the public interest directly, but should further inform the Court of whether it will be practicable for the Court to conform its injunction (or compulsory license) to the economic realities of the marketplace for ESAs. The Court gave the parties fifteen days to submit a list of "agreed" candidates to be appointed special master, and then the Court intends to give that candidate another sixty days to make the inquiries necessary to provide his or her findings to the Court. Presumably, the Court will then make its ruling.
It is difficult to understand the Supreme Court's eBay decision as intending (or anticipating) that a District Court would undertake setting out the type of modified "injunction" that Judge Williams is contemplating here, as being in the nature of a compulsory license. Importantly, of course, all the District Court's ruling will do is to refuse to prohibit Roche from marketing Mircera® provided that it complies with the pricing and other affirmative provisions of the Court's order. This is not a license, however, but simply the limits to which the Court is willing to enjoin Roche (i.e., it will not enjoin Roche under the terms of the injunction). But whatever Judge Williams does, Amgen's intention to press its damages and willful infringement claims are certain to place before the Federal Circuit (and perhaps ultimately the Supreme Court) the issue of how far a District Court may go in fashioning a remedy having the properties of a compulsory license. There is some poetic justice in the possibility that the Supreme Court may have to address, and right soon, the consequences of eBay and its philosophical inclination to be parsimonious with regard to patent rights. In view of the Supreme Court's recent track record, however, any such thirst for justice should be strongly tempered with trepidation about how much further the Supreme Court may be willing to restrict a patentee's right to exclude.
In an Op-Ed piece appearing in last Saturday's edition of The Boston Globe, Alnylam Pharmaceuticals Inc. Chief Executive Officer 
Alluding to 
On Tuesday, Roche filed its brief in support of U.S. District Court
for the District of Massachusetts (Judge William G. Young, presiding)
modifying its preliminary injunction granted on February 28th, barring
Roche from launching its FDA-approved Mircera® drug product. The
Court's preliminary injunction was entered pursuant to a jury judgment
on October 23, 2007 that Mircera® infringed several Amgen patents. That verdict found Roche's Mircera® infringed claims 3, 7, and 8 of
Amgen's U.S. Patent No. 
Absent this jury verdict, Roche would be in a position
to launch Mircera®, because the U.S. Food and Drug Administration
The Court put the parties on notice that, in the absence of
appellate jurisdiction by the Federal Circuit, it was inclined to at
least consider modifying the injunction within 30 days (i.e., by March
30th), provided that Roche was willing to agree to the following
conditions. First, Roche would pay Amgen a royalty of 22.5% (Amgen
having already rejected an offer for a 20% royalty from Roche (see
"
For its part, Amgen countered by casting the proposed
modification as a compulsory license in favor of Roche. Amgen argued
that it would be inequitable to "reward" Roche, an adjudged infringer,
with such a license. Moreover, Amgen argued that compulsory licensing
was not within the province or the power of the Court to impose, but
that it could either grant or deny the injunction and nothing more. Congress, Amgen argued, had several times considered introducing
compulsory licensing provisions into the patent statute but had not,
and Amgen argued that the Court did not have the power to impose such a
license in the face of Congressional disapproval, citing in support of
this argument the Federal Circuit's decision in 
Last Friday, the U.S. District Court for the District of Massachusetts (Judge William G. Young, presiding) granted a preliminary injunction to Amgen against Hoffman La-Roche, preventing Roche from selling its Mircera® drug product, a form of recombinant EPO that has been covalently linked to polyethylene glycol. Last November, the U.S. Food and Drug Administration 
The Court's injunction is pursuant to a jury judgment on October 23, 2007 that Mircera® infringed several Amgen patents. That verdict found Roche's Mircera® infringed Claims 3, 7, and 8 of Amgen's U.S. Patent No. 
The Court did not make the injunction permanent, however, and announced that it "may modify" the injunction in 30 days, unless the Federal Circuit exercises jurisdiction by accepting an appeal (presumably from Roche). The District Court did indicate that it would impose the following conditions if it were persuaded (presumably by its considerations of the public interest) not to make the injunction permanent. First, Roche would pay Amgen a royalty of 22.5%; on February 20th, Amgen rejected an offer for a 20% royalty from Roche (see "
If you have been reading the reports placed by John White and Bob Spar over at the 
Late last week, U.S. District Court Judge Mary Pat Thynge (D. Del.) granted leave to Amgen Inc. to amend and supplement its reply to ARIAD Pharmaceuticals Inc.'s counterclaims to include new claims of inequitable conduct. In her order, Judge Thynge noted that Amgen pled affirmative acts of misconduct and evidence of intent sufficient to support its claim.
ARIAD did eventually submit Dr. Kadesch’s Roche deposition testimony to the USPTO, however Amgen asserts that it was included with a number of other items, with no attempt to advise the USPTO of any potential misrepresentations. ARIAD opposed Amgen’s motion as moot, asserting that they had submitted Dr. Kadesch’s deposition testimony within a day of receiving clearance under the protective order in the Roche case. Additionally, ARIAD asserted that Dr. Kadesch’s deposition testimony was not material to the reexam proceedings. In granting Amgen’s motion, Judge Thynge noted that the issues of whether the testimony was material, or whether there was misrepresentation and the requisite intent, were questions of fact to be addressed by the Court.
District Court Judge James C. Cacheris of the Eastern District of