McDermott Defeats Summary Judgment on Libel and California Unfair Competition Claims in a Patent Infringement Action
WASHINGTON, D.C. (August 4, 2009) — McDermott Will & Emery LLP is pleased to announce that on August 4, 2009, Judge Alexander Williams, Jr. of the Southern Division of the Maryland District Court denied a summary judgment motion to dismiss libel and California unfair competition claims in a patent infringement lawsuit. McDermott represented StemCells, Inc.
StemCells, Inc., is involved in a multi-patent infringement battle with Neuralstem, Inc. Following initiation of a reexamination of several of the patents, Neuralstem's CEO, an attorney, stated that the U.S. Patent and Trademark Office (USPTO) "ruled that all of the patents [StemCells] accused us of infringing are invalid." Neuralstem also issued a press release characterizing the litigation as having been dismissed and claiming StemCells intentionally withheld material information from the patent office.
Neuralstem filed a declaratory judgment action and within hours, McDermott filed a complaint in the Northern District of California, alleging patent infringement and trade libel and California unfair competition causes of action. Neuralstem filed a summary judgment motion attempting to get the non-patent causes of action dismissed. McDermott argued that the asserted causes of action were not protected by the First Amendment because they constituted false or unlawful speech. The litigation privilege and California Anti-SLAPP statute were also argued not to be applicable because the press releases were not written to achieve the objectives of the litigation, but instead written to Neuralstem investors for the purpose of obtaining investment. McDermott noted that these statements were made to potential and existing investors, which gave rise to the causes of action.
The court denied Neuralstem's request for summary judgment on these two causes of action and is allowing them to go to trial. In resolving the matter in StemCells' favor, the court found the statement to be false in that initiation of reexamination only means there is a question of validity, the case was stayed, not dismissed and the patent office does not address inequitable conduct in reexaminations.
The McDermott team included partners Steve Shahida, Bill Gaede and associates Amanda Koenig and Jennifer Belcher.
McDermott Will & Emery is a leading international law firm with a diversified business practice. The Firm represents a wide range of commercial, industrial and financial enterprises, both publicly and privately held. Clients include some of the world’s largest corporations, small and medium-sized businesses, and individuals.
