The patents in dispute are 7,115,418entitled “Methods of proliferating undifferentiated neural cells” and 7,361,505entitled “Multipotent neural stem cell compositions,” both of which claim priority in part to the same application filed on July 8, 1991. Accused infringer Neuralstem found a 1991 document (“1991 Memo”) with the subject line “Technique for Proliferation of Nerve Cells for Transplantation” which states the following:
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This letter is to indicate the allotment of interest 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
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The inventors are in agreement with this assignment which relates to 50% of any profits derived from the invention, the other 50% being assigned to the University of Calgary … per the current policy related to Intellectual Property.
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Neuralstem mounted an attack (both a motion to dismiss and a motion for summary judgment) based on the 1991 Memo, i.e., StemCells was not an exclusive licensee because of Tetzleff’s ownership interest, and therefore didn’t have standing.* StemCells retorted that the bona fide purchaser defense insulated it from the claim. Both parties filed motions to supplement the record with additional evidence: Neuralstem has evidence that StemCells was on notice of Tetzleff’s interest in the patent and StemCells has evidence that Tetzleff implicitly represented in a 1994 agreement with Neurospheres that he had no ownership interest in the patents, because he did not list them on a schedule.
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In this case, StemCells attempts to make impermissible offensive use of § 261. StemCells is the plaintiff and has sued Neuralstem for, inter alia, patent infringement. As plaintiff, StemCells bears the burden of proving standing. Therefore, in asserting the bona fide purchaser defense to Neuralstem’s standing challenge, StemCells effectively endeavors to use the bona fide purchaser defense to establish an essential element of its case. It well-established [sic], however, that the bona fide purchaser defense is only “a shield by which the purchaser of a legal title may protect himself against the holder of an equity, not a sword by which the owner of an equity may overcome the holder of both the legal title and an equity.” … StemCells has identified no authority proposing that a plaintiff may use § 261 to establish its constitutional capacity to sue ….
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StemCells, Inc. v. Neuralstem, Inc., Civ. Nos. 8:06–cv–01877–AW, 8:08–cv–02664–AW, 8:08–cv–01173–AW, 2012 WL 1184545 (D. Md. Apr. 5, 2012). The decision is not currently available on PACER – in the court’s April 6 order the court sealed it and gave the parties 14 days to oppose lifting the seal. But it’s on Westlaw.
*Neurostem took a license from Tetzlaff for the patents, but that wasn’t needed for the instant motions because the challenge is the absence of exclusivity of ownership. The role of an assignment/license is a defense against subsequent suits, to prevent the plaintiff from recapturing the rights from the heretofore missing inventor and suing again, or, in this case, at least to get a license to them for a license defense.
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