StemCells, Inc. v. Neuralstem, Inc.

115 F. Supp. 3d 623, 2015 U.S. Dist. LEXIS 95886, 2015 WL 4478519
CourtDistrict Court, D. Maryland
DecidedJuly 22, 2015
DocketCase No. 06-cv-1877-RWT
StatusPublished

This text of 115 F. Supp. 3d 623 (StemCells, Inc. v. Neuralstem, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
StemCells, Inc. v. Neuralstem, Inc., 115 F. Supp. 3d 623, 2015 U.S. Dist. LEXIS 95886, 2015 WL 4478519 (D. Md. 2015).

Opinion

MEMORANDUM OPINION

ROGER W. TITUS, District Judge.

Three scientists walk into a lab. They emerge with an important scientific discovery but, as is frequently the case, a contentious patent dispute later arises. After nearly a decade of litigation that has spanned two federal judges, and produced enough pages of memoranda to clear a forest, Plaintiffs still have not officially unlocked the doors to the courthouse. The discovery by Defendants of a terse, one-page document threw a monkey wrench into this high-stakes litigation, as it called into question whether Plaintiffs had standing to bring their patent infringement claims. The Court held a bench trial to determine the issue of standing, and as [626]*626more fully explained below, concludes that Plaintiffs lack standing to bring their patent infringement claims. Accordingly, the Complaint will be dismissed.

Background1

A. Drs. Tetzlaff, Weiss, Reynolds, and the Initial Discovery

In July of 1989, Dr. Wolfram Tetzlaff, a specialist in spinal cord injuries who is a Ph.D. and a licensed physician, was offered a position as a faculty member at the University of Calgary, and began setting up his laboratory. ECF No. 476 at 41-43, Dec. 12, 2014 Tr. Trans. 41:8-43:4. Brent Reynolds, then a Ph.D. candidate, was hired to work in Dr. Tetzlaffs lab.2 ECF No. 474 at 48-49, Dec. 9, 2014 Tr. Trans. 48:24-49:2.

, Dr. Reynolds’, work was supported by a studentship funded by the Pharmaceutical Manufacturer’s Association of Canada and the Medical Research Council of Canada. ECF No. 478-11 at 4; ECF No. 476 at 55-56, Dec. 9, 2014 Tr. Trans. 55:19-56:7. Dr. Reynolds asserted that Dr. Tetzlaff initially paid his salary from the budget he received to start his lab. ECF No. 474 at 62, Dec. 9, 2014 Tr. Trans. 62:11-22. However, there is no evidence that Dr. Reynolds’ salary was ever paid by Dr. Tetzlaff personally, and Dr. Reynolds admitted on cross-examination that he was unaware of the. specific details of how his work was funded. Id, at 139-142, Dec. 9, 2014 Tr. Trans. 139:7-142:8.

Next door to Dr. Tetzlaffs.lab was the lab of Dr. Samuel Weiss, another young professor who was working with tissue culture. ECF. No. 476 at 43-44, Dec. 12, .2014 Tr. Trans, 43:25-44:24; ECF No. 474 at 51, Dec.- 9, 2014 Tr. Trans. 51:16-19. Although Dr. Reynolds had been, hired to work under Dr.1 Tetzlaff, he eventually began working in Dr. Weiss’ lab; Dr. Reynolds had developed an increasingly severe animal allergy, and unlike Dr. Tetzlaff, Dr. Weiss did not work with live animals. ECF No. 474 at 51, Dec. 9, 2014 Tr. Trans. 51:1-25.' However, because of the proximity of their labs, and due to the fact that they were essentially the 'only faculty in their wing of the building, the three scientists encountered each other frequently and collaborated on projects. ECF No. 476 at 44 — 45, Dec. 12, 2014 Tr. Trans. 44:8-45:5. ... ...

Dr. Reynolds came into possession of gangliocytes, a naturally occurring chemical compound in the body, that he obtained from a company in Italy. ECF No: 474 at 50, Dec. 9, 2014 Tr. Trans. 50:15-25. He decided to put the gangliocytes, along with an epidermal growth factor, into a tissue culture with neurons to see if the combination resulted in more neurons surviving. ECF No. 474 at 52, Dec. 9, 2014 Tr. Trans. 52: 2-10. The results were unexpected. Not only.did the combinatiqn result in more neurons surviving, but also it resulted in the massive proliferation of neurons. ECF No. 474 at 53, Dec. 9, 2014 Tr. Trans. 53:8-10.

B. Collaboration and Agreement

All three scientists, including Dr. Tet-zlaff, collaborated to confirm and refine the discovery. Dr. Tetzlaff provided key assistance in confirming-that proliferation of cells was in fact taking place, in determining what type of cells were being proliferated, in' designing and executing the first human experiments, and in demon[627]*627strating the potential utility of the technol-. ogy in the human adult brain. ECF No. 474 at 126, Dec. 9, 2014 Tr. Trans. 126:1-127:8 (Dr. Reynolds testifying that Dr. Weiss assisted with identifying a method to confirm proliferation of cells); ECF No. 476 at 52, Dec. 12, 2014 Tr. Trans. 52:3-53:3; ECF No. 478-9 at 2, 5-7.

The collaboration of all three scientists is strongly corroborated by a number of contemporaneous documents. One is a grant application jointly submitted by Drs. Weiss and Tetzlaff in 1990 detailing the extent of their collaborative efforts with regard to the discovery (the “1990 Grant Application”). ECF No. 478-11. This grant application states that Dr. Tetzlaff will be a “co-ordinator of all phases of molecular biology experiments.” Id. at 32. The others are various abstracts and articles on which all three scientists are credited with authorship.3 ECF No. 478-3; ECF No. 478-4; ECF No. 478-5.

The three scientists, recognizing the potential commercial value of the invention, agreed to divide ownership amongst themselves. ECF No. 476 at 57, Dec. 12, 2014 Tr. Trans. 57:15-58:8. Consistent • with their understanding, Drs. Weiss, Tetzlaff and Reynolds signed a document on January 3,1991 (the “1991 Memo”) that stated:

This letter is to indicate the allotment of interests to the inventors of the above invention.
45% — Dr. Samuel Weiss, Dept, of Pathology
45% — Mr. Brent Allan Reynolds, Dept, of Pathology 10% — Dr. Wolfram Tetzlaff, Dept, of Anatomy
The inventors are in agreement with this assignment which relates to 50% of any profits derived from this invention, the other 50% being assigned to the. University of Calgary through their agent University Technologies International, Inc. per the current policy relating to Intellectual Property.4 (emphasis added)

ECF No. 478-8. This document, dated January 2,1991, was addressed to Beverly A. Sheridan of University Technologies, Inc. (“UTI”). Id.. UTI was the entity responsible for commercializing, inventions made by faculty and staff at the University of Calgary. ECF No. 474 at 86-87, Dec. 9, 2014 Tr. Trans. 86:25-87:2.

On January 3, 1991, Drs. Weiss and Reynolds, but not Dr. Tetzlaff, signed an agreement (the “1991 Assignment”) purporting to assign their interest in the inr vention to UTI; the document represented that no other party had a claim to the invention. ECF No. 478-10. UTI ultimately failed to successfully commercialize the invention, and it was purportedly reassigned to Drs. Weiss and Reynolds, who set about attempting to commercialize the invention themselves. ECF No. 474 at 108; Tr. Tran. 108:9-109:1.

C. The Patent Application

Drs. Weiss and Reynolds filed Patent Application 07/726,812 (the “812 Application”) on July 8, 1991. ECF No. 402-2 at 46-121. On February 2, 1994, the United [628]*628States Patent and Trademark Office (“PTO”) rejected several claims in the '812 Application for failing to list Dr. Tetzlaff as an inventor, even though he was listed as an author on Abstract 474.2 in Volume 16 of the Society for Neuroscience Abstracts. ECF No. 299-4 at 12.

Faced with this rejection by the PTO, Jan Brunelle, the attorney prosecuting the '812 Application, contacted Dr.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lujan v. Defenders of Wildlife
504 U.S. 555 (Supreme Court, 1992)
Mars, Inc. v. Coin Acceptors, Inc.
527 F.3d 1359 (Federal Circuit, 2008)
Israel Bio-Engineering Project v. Amgen Inc.
475 F.3d 1256 (Federal Circuit, 2007)
Microsoft Corp. v. i4i Ltd. Partnership
131 S. Ct. 2238 (Supreme Court, 2011)
Filmtec Corporation v. Allied-Signal Inc., and Uop Inc.
939 F.2d 1568 (Federal Circuit, 1991)
1337523 Ontario, Inc. v. Golden State Bancorp, Inc.
163 F. Supp. 2d 1111 (N.D. California, 2001)
Stoneeagle Services, Inc. v. Gillman
746 F.3d 1059 (Federal Circuit, 2014)
General Electric Company v. Wilkins
750 F.3d 1324 (Federal Circuit, 2014)
Pannu v. Iolab Corp.
155 F.3d 1344 (Federal Circuit, 1998)
Beech Aircraft Corp. v. EDO Corp.
990 F.2d 1237 (Federal Circuit, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
115 F. Supp. 3d 623, 2015 U.S. Dist. LEXIS 95886, 2015 WL 4478519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stemcells-inc-v-neuralstem-inc-mdd-2015.