By Kevin E. Noonan --
On June 9, 2008, the University of Pittsburgh obtained a judgment correcting inventorship of U.S. Patent No. 6,777,231 under 35 U.S.C. § 256. The U.S. District Court for the Central District of California determined that several of the inventors, who had assigned their rights to the Regents of the University of California, were not properly named as inventors, thus extinguishing the Regents' rights and nullifying a license from the University of California to Cytori Therapeutics, Inc. As a consequence, the Pittsburgh licensee, Artecel Inc., became the sole licensee of the '231 patent.
The '231 patent is directed to adipose-derived stem cells. Claim 1 of the '231 patent reads as follows:
1. An isolated adipose-derived stem cell that can differentiate into two or more of the group consisting of a bone cell, a cartilage cell, a nerve cell, or a muscle cell.
As granted, the '231 patent named Adam J. Katz, Ramon Llull, William J. Futrell, Marc H. Hedrick, Prosper Benhaim, Hermann Peter Lorenz, and Min Zhu as inventors, and the patent is assigned to both the University of Pittsburgh and the Regents of the University of California. The District Court determined in its findings of fact that Katz, Llull, and Futrell worked only at the University of Pittsburgh; Benhaim, Lorenz, and Zhu worked only at UCLA; and Hedrick worked first at Pittsburgh and later at UCLA.
The University of Pittsburgh filed suit to remove the UCLA inventors from the '231 patent under 35 U.S.C. § 256, and the UCLA inventors counterclaimed to remove the University of Pittsburgh inventors. (Curiously UCLA does not seem to be a party to the suit even though a determination that the Defendants were not inventors would destroy any rights UCLA has in the '231 patent.)
On June 9th, Judge Consuelo B. Marshall issued the District Court's Findings of Fact and Conclusions of Law; the Court had earlier granted summary judgment that Drs. Katz and Llull were properly named as inventors. The Court found that Dr. Katz had isolated adipose-derived stem cells, and that Drs. Katz and Llull conceived that these cells could be induced to differentiate into cells from multiple mesodermal lineages, "including bone, cartilage, fat and muscle." The Court credited evidence from laboratory notebooks that Drs. Katz and Llull showed their adipose-derived stem cells could differentiate into several different cell types, including adipose cells, nerve cells, and muscle cells. Dr. Katz also "appreciated" the capacity of these adipose-derived stem cells for self-renewal, according to the Court. The Court found that the earliest date of conception for the invention claimed in the '231 patent was several years before work began at UCLA.
Based on these factual findings, the District Court concluded that the University of Pittsburgh had carried its burden of showing by clear and convincing evidence that the UCLA inventors (Benhaim, Hedrick, Lorenz, and Zhu) were not inventors of the invention claimed in the '231 patent. According to the Court, the evidence established that Dr. Hedrick's work regarding differentiation of adipose-derived stem cells into nerve cells occurred after Drs. Katz and Llull conceived of the claimed invention, i.e., adipose-derived stem cells that could be induced to differentiate into multiple cell types (adipose and muscle cells). The Court concluded that the UCLA inventors' work merely "confirmed the operability of the invention." Thus, only Drs. Katz and Llul are properly named as inventors of the '231 patent.
The UCLA inventors had previously attempted to correct inventorship during prosecution of the corresponding application, asserting that the inventors were properly named upon filing but that claim amendments had changed inventorship. The first petition, filed before the '231 patent issued, was never acknowledged by the Office, while the second (accompanied by a Certificate of Correction) was denied. Also denied was another petition supported by a copy of Pittsburgh's complaint. The Court did not rule on the question of whether filing any of these petitions constituted inequitable conduct; this question should be mooted as to the UCLA scientists by the inventorship determination (since if the inventors were not inventors, Rule 56 should not apply). The question of the culpability of Defendants' patent counsel is another matter, including an allegation on Arcetel's website that the last filed petition was filed during the litigation and without notice to Pittsburgh or its named inventors. These activities could provide one avenue for an accused infringer to challenge the enforceability of the '231 patent.
Cytori Therapeutics, the University of California's licensee, had this to say on its website regarding the District Court's decision:
Cytori believes the recent decision on the '231 patent is in error and that work completed at the University of California was critical to obtaining this patent. Cytori recognizes that [the] '231 [patent] may have value in the long term in areas unrelated to the Company's existing product pipeline, and consequently Cytori and the UC Regents are reviewing their legal alternatives to this ruling, including that of appealing this decision to the Federal Circuit. It is Cytori's intention to aggressively protect its business, its intellectual property and its investors.
However, the company also asserts that losing its rights to the technology claimed in the '231 patent is not critical to its business:
The Court's decision [in the '231 inventorship lawsuit] does not impact Cytori's primary ongoing business activities or product development pipeline because Cytori's products do not practice the '231 patent. Cytori's Celution® System yields an output comprising a diverse mixture of cells found in adipose tissue whereas the '231 patent covers a narrowly defined population of adipose derived adult stem cells in an environment substantially free of other cellular materials found in adipose tissue. The output that is covered by the '231 patent requires different isolation or processing techniques, which are unnecessary for therapeutic efficacy, and which the Celution System, by design, does not perform.
Cytori's Celution® System device is protected, according to the company, by U.S. Patent No. 7,390,484.
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