DCT

2:20-cv-02226

Equistem Technology LLC v. Hilltop Biosciences Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:20-cv-02226, D. Ariz., 11/19/2020
  • Venue Allegations: Plaintiff alleges venue is proper in the District of Arizona because Defendant conducts business, offers and sells the accused products in the district, and a substantial part of the events giving rise to the claims occurred there.
  • Core Dispute: Plaintiff, a licensee, alleges that Defendant’s Regenaflex line of veterinary products infringes three patents related to acellular, amnion-derived therapeutic compositions and their methods of use.
  • Technical Context: The technology relates to regenerative medicine, specifically using processed, non-living materials from the amniotic sac to create therapeutic products for tissue healing, with a focus on the equine market.
  • Key Procedural History: Plaintiff asserts standing as the "sole licensee with the right to enforce" the patents-in-suit in the field of equine treatment. U.S. Patent 9,132,156, one of the patents-in-suit, was subject to an ex parte reexamination, with a certificate issued on December 8, 2016, confirming the patentability of all original claims (1-30).

Case Timeline

Date Event
2014-06-15 Earliest Priority Date for '903, '746, and '156 Patents
2015-09-15 U.S. Patent 9,132,156 Issues
2016-12-08 Reexamination Certificate for U.S. Patent 9,132,156 Issues
2017-11-14 U.S. Patent 9,814,746 Issues
2019-12-31 U.S. Patent 10,517,903 Issues
2020-08-01 Alleged First Marketing of Accused Products
2020-11-19 Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 10,517,903 - "Amnion Derived Therapeutic Composition and Process of Making Same" (issued Dec. 31, 2019)

The Invention Explained

  • Problem Addressed: The patent describes that while therapies using live amniotic cells are known for promoting tissue healing, they require special handling because the cells are fragile and sensitive to environmental conditions like temperature (Compl. Ex. A, '903 Patent, col. 1:24-37).
  • The Patented Solution: The invention is a process for creating a therapeutic composition that is "acellular," meaning it is essentially free of live or viable amniotic cells. The process involves taking amniotic fluid, removing or destroying the cells ("acellularizing"), filtering the result, and then optionally adding other components like non-amnion viable cells before cryopreserving the final product ('903 Patent, Abstract; col. 2:3-16). This creates a more stable product that retains beneficial growth factors and proteins without the fragility of live-cell therapies ('903 Patent, col. 4:20-30). Figure 5 of the patent illustrates a flowchart for this process, starting with receiving amniotic fluid and centrifuging it to remove cells ('903 Patent, p. 15, FIG. 5).
  • Technical Importance: This technology allows for the creation of an "off-the-shelf" regenerative product that is more stable and requires less stringent handling than its live-cell counterparts ('903 Patent, col. 4:20-30).

Key Claims at a Glance

The complaint does not specify which claims are asserted. The patent contains two independent process claims (1 and 11). A representative independent claim is Claim 1, which includes the following essential elements:

  • A process for forming a therapeutic composition, comprising the steps of:
  • Providing amniotic fluid from a mammalian donor containing cells, growth factors, and proteins.
  • "Acellularizing" the fluid to produce an "acellular amniotic fluid" with no more than about 750,000 intact cells/ml and no more than 1% viable cells.
  • Filtering the acellular fluid to remove debris.
  • Adding a plurality of "non-amnion derived viable cells" to the composition.
  • Cryopreserving the resulting composition.
  • Thawing the composition for use.

U.S. Patent No. 9,814,746 - "Method of Treatment Utilizing an Acellular Amnion Derived Therapeutic Composition" (issued Nov. 14, 2017)

The Invention Explained

  • Problem Addressed: As with the related patents, the technology addresses the need for a stable, amnion-derived therapeutic that avoids the handling difficulties of live-cell products ('746 Patent, col. 1:30-38).
  • The Patented Solution: This patent claims methods of treating a patient by applying a specific type of acellular composition. The composition consists of acellular amniotic membrane particles (described as "micronized") suspended in a carrier fluid, which itself is acellular amniotic fluid. The core inventive concept is the act of topically applying this specific cell-free composition to an external treatment location ('746 Patent, Abstract; col. 2:42-53). Figure 3B of the patent provides a scanning electron micrograph showing the "cryo-fractured amniotic membrane particles" that form a key part of the composition ('746 Patent, p. 47, FIG. 3B).
  • Technical Importance: The invention aims to protect the specific clinical or veterinary act of using the acellular composition, extending patent coverage beyond the product itself to its application ('746 Patent, col. 1:22-26).

Key Claims at a Glance

The complaint does not specify which claims are asserted. The patent contains numerous independent method claims (1, 18, 26, 31, 36). A representative independent claim is Claim 1, which includes the following essential elements:

  • A method of topically treating an external body treatment location, comprising the steps of:
  • Providing a therapeutic composition that includes: (i) "acellular amniotic membrane particles" and (ii) a "carrier fluid comprising an acellular amniotic fluid."
  • The particles must "consist essentially of micronized amniotic membrane."
  • The overall composition must be "essentially free of any viable amniotic membrane cells or viable amniotic fluid cells."
  • Applying the composition topically to the treatment location.

Multi-Patent Capsule

  • Patent Identification: U.S. Patent No. 9,132,156, "Acellular Amnion Derived Therapeutic Compositions," issued Sep. 15, 2015 ('156 Patent).
  • Technology Synopsis: The '156 patent claims the therapeutic composition itself, comprising "acellular amniotic membrane particles" and a "carrier fluid" that includes "acellular amniotic fluid." The composition is defined as "essentially free of any viable amniotic membrane cells or viable amniotic fluid cells" ('156 Patent, Claim 1). This patent protects the core product, complementing the process ('903 patent) and method of use ('746 patent) claims of the other patents-in-suit.
  • Asserted Claims: The complaint does not specify which claims are asserted. The independent claims of the '156 patent are 1, 21, 22, and 30.
  • Accused Features: The complaint alleges that Defendant's Regenaflex and Regenaflex-C products infringe by being "cell-free compositions comprising amniotic fluid and micronized amnion particles" (Compl. ¶9, ¶12).

III. The Accused Instrumentality

  • Product Identification: Regenaflex and Regenaflex-C (the "Infringing Products") (Compl. ¶9, ¶12).
  • Functionality and Market Context: The complaint alleges, upon information and belief, that the accused products are "cell-free compositions comprising amniotic fluid and micronized amnion particles" (Compl. ¶9, ¶12). The complaint does not provide further technical detail about the products' composition or manufacturing process. The products are marketed for the "treatment of equines" (Compl. ¶8). Plaintiff alleges Defendant markets and sells these products through its website and in the District of Arizona, interfering with Plaintiff's own commercial efforts (Compl. ¶6, ¶13, ¶15).

IV. Analysis of Infringement Allegations

The complaint provides high-level, conclusory allegations of infringement without specific factual support mapping product features to claim elements. The central factual assertion is that the accused products are "cell-free compositions comprising amniotic fluid and micronized amnion particles" (Compl. ¶9, ¶12). The complaint does not contain claim charts or detailed infringement contentions.

The infringement theories for the lead patents appear to be as follows:

  • '903 Patent (Process Claim): The complaint alleges infringement by the "manufacture, sale and offer for sale" of the accused products (Compl. ¶10). For the asserted process claims, such as claim 1, the unstated theory must be that Defendant's manufacturing process in the U.S. utilizes all steps of the claimed method, or that the products are manufactured abroad using the patented process and then imported. The complaint does not, however, plead any specific facts about Defendant's actual manufacturing methods.

  • '746 Patent (Method of Use Claim): The complaint alleges direct, induced, and contributory infringement (Compl. ¶18, ¶22). Since Defendant is a product manufacturer, the primary theory for infringement of method-of-use claims, such as claim 1, would likely be indirect infringement. This would require showing that Defendant actively encourages or enables end-users (e.g., veterinarians) to use the accused products in a manner that performs the steps of the claimed method. Figure 9 of the '746 patent depicts a syringe injecting a therapeutic composition into a knee joint, illustrating one potential method of use the patent covers ('746 Patent, p. 53, FIG. 9). However, the complaint pleads no facts regarding user manuals, marketing materials, or other instructions that would support a claim of inducement.

  • Identified Points of Contention:

    • Evidentiary Questions: A principal issue will be whether Plaintiff can produce evidence in discovery to support its allegations. This includes evidence of Defendant's specific manufacturing process to support infringement of the '903 patent's process claims, and evidence of instructions or other acts to support inducement of infringement of the '746 patent's method claims.
    • Technical Questions: What is the precise composition of the Regenaflex products? The allegation that they are "cell-free" and contain "micronized amnion particles" will be subject to discovery and expert testing to determine if they meet the specific quantitative and qualitative limitations of the patent claims.

V. Key Claim Terms for Construction

  • The Term: "acellular"

    • Context and Importance: This term is central to all three patents and defines the core nature of the invention as distinct from live-cell therapies. Whether the allegedly "cell-free" accused products meet this limitation will be a critical issue for infringement.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The plain meaning of the word suggests simply "lacking cells."
      • Evidence for a Narrower Interpretation: The patents provide an explicit definition, stating that an "acellular material ... is defined as a material having essentially no viable cells wherein no more than 1% of the total number of cells in the material are viable" ('903 Patent, col. 2:17-21). The specification provides further quantitative limits for "essentially cell free," such as "no more than about 750,000 intact cells per ml of material" ('903 Patent, col. 21:19-20). A party could argue these definitions control and narrow the term's scope.

  • The Term: "micronized"

    • Context and Importance: The complaint alleges the accused products contain "micronized amnion particles" (Compl. ¶12). The scope of this term will be important for determining whether the particles in Defendant's products are the same as those required by the claims.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: A party may argue the term simply refers to particles of a size in the micron range, without regard to the method of their creation.
      • Evidence for a Narrower Interpretation: The specification repeatedly describes creating the particles via "cryo-fracturing," including with a "blunt object" to create "irregularly shaped" particles with a higher surface area ('903 Patent, col. 7:1-10). A party could argue that "micronized" as used in the patent is implicitly limited to particles created by this specific method and having these properties.

  • The Term: "consist essentially of"

    • Context and Importance: This transitional phrase appears in claims of the '746 and '156 patents (e.g., '746 Patent, Claim 1, requiring particles to "consist essentially of micronized amniotic membrane"). Its construction determines what, if any, unlisted ingredients are permitted in the particles without avoiding infringement. Practitioners may focus on this term because it opens the door to arguments about whether any additives in the accused product "materially affect" the invention's properties.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: A plaintiff would argue that only additives that change the fundamental therapeutic and structural character of the amniotic membrane particles would be excluded.
      • Evidence for a Narrower Interpretation: A defendant might point to the patent's emphasis on the purity and specific layers of the amnion (e.g., "particles consist essentially of epithelium") ('746 Patent, col. 6:50-52) to argue that the "basic and novel properties" are tied to this specific composition, and that other components would materially alter it.

VI. Other Allegations

  • Indirect Infringement: The complaint makes conclusory allegations of induced and contributory infringement (Compl. ¶18, ¶22). It does not, however, plead specific underlying facts, such as the existence or content of product instructions, user manuals, or marketing materials that would be necessary to substantiate a claim for inducement.
  • Willful Infringement: The complaint alleges that Defendant acted "intentionally and/or willfully," "knowing that the Patents exist and remain in force" (Compl. ¶20). The complaint does not specify whether this knowledge was acquired pre- or post-suit and provides no facts regarding any pre-suit notice or other circumstances that would support a finding of willfulness or egregious conduct.

VII. Analyst’s Conclusion: Key Questions for the Case

  1. A Threshold Question of Standing: As Plaintiff EquiStem is a licensee, not the patent assignee, an initial question for the court will be whether its license agreement grants it sufficient rights to have constitutional standing to sue for infringement in its own name, or whether the patent owner is a required party to the litigation.
  2. An Evidentiary Question of Fact: The complaint currently lacks specific factual allegations detailing Defendant's manufacturing process or any actions that would support a claim for indirect infringement. A central question will be what evidence Plaintiff can develop during discovery to demonstrate that Defendant's actions meet the limitations of the asserted process and method claims.
  3. A Core Issue of Definitional Scope: The case will likely turn on claim construction, particularly the meaning of "acellular." The dispute will focus on whether Defendant's "cell-free" products meet the specific quantitative thresholds (e.g., <1% viable cells) that the patentee used to explicitly define the term in the specification.