Source: https://propertyintangible.com/2012/04/missing-inventor.html
Timestamp: 2019-04-22 04:12:07+00:00

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I love cases where the defendant goes back and finds another potential inventor. Stemcells, Inc. v. Neuralstem, Inc. shows some of the ways this can play out – in this case, standing, and the rarely-invoked bona fide purchaser in good faith defense.
This letter is to indicate the allotment of interest to the inventors of the above invention.
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.
The last individual, Tetzlaff, is not listed as an inventor on either patent. On February 14, 2011, two weeks before the various motions were filed, Tetzlaff granted Neuralstem a “fully paid-up, retroactive, non-royalty-bearing, nonexclusive, worldwide, nonterminable and irrevocable license to the invention embodied in U.S. Patent Application Serial No. 07/726,812 [the original 1991 application to which both patents-in-suit claim priority], as well as all patent applications claiming priority to U.S. Patent Application Serial No. 07/726,812 ….” There isn’t a dispute, at least at this stage, that the memo describes the patents-in-suit.
One more nuance – StemCells was not the owner of the patents but rather an exclusive licensee. The patents are owned by a company called Neurospheres Holdings, Ltd., of which Weiss and Reynolds are 49% owners.
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.
Starting with standing, what interest does Dr. Tetzlaff have in the patent? In Neuralstem’s opinion the memo says that Dr. Tetzlaff is an inventor; in StemCells’ opinion the memo says only that Dr. Tetzlaff is entitled to a part of the profits from the patents. The court says the memo is ambiguous and could mean either. Extrinsic evidence, namely the IP policy that the 1991 Memo references, the testimony of co-inventors Weiss and Reynolds, and the absence of testimony from Tetzlaff, fails to clear up the ambiguity and neither party is granted its motion for summary judgment on standing.
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 ….
Further, if § 261 could be applied as StemCells claimed, summary judgment would still be denied because there is a question of fact about whether the 1991 Memo means that Tetzlaff is a co-inventor, in which case § 261 wouldn’t apply, or instead an assignment, the type of transaction to which § 261 applies.
Given that the court doesn’t know whether StemCells has standing, it declined to rule on an also-pending motion for a reconsideration of a claim construction and instead orderedthe parties to propose a joint scheduling order for additional discovery on standing.
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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