DCT

2:19-cv-02267

Vetstem Biopharma Inc v. Enso Discoveries LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:19-cv-02267, D. Kan., 05/30/2019
  • Venue Allegations: Venue is alleged to be proper in the District of Kansas because the corporate defendants maintain their principal places of business within the district and the individual defendants reside or have sufficient minimum contacts there. The complaint further alleges that the defendants make, use, and sell the accused products and services within the district.
  • Core Dispute: Plaintiff alleges that Defendants’ regenerative stem cell therapy services for veterinary and human applications infringe a patent on methods for preparing and using stem cell compositions derived from adipose tissue without subsequent culturing or isolation steps.
  • Technical Context: The technology involves methods of processing adipose (fat) tissue to create a therapeutic composition of regenerative cells for treating musculoskeletal injuries and diseases in a growing market for both veterinary and human medicine.
  • Key Procedural History: The complaint alleges that individual defendants Patrick Farley and Dr. James Corey Orava are former employees of Plaintiff VetStem who, in violation of their employment agreements, founded or joined competing companies. Plaintiff alleges it provided Defendants with actual notice of infringement, including a claim chart for the patent-in-suit, on June 28, 2018, and that subsequent settlement discussions stalled in late 2018, leading to the current lawsuit.

Case Timeline

Date Event
2003-10-08 U.S. Patent No. 9,453,202 Priority Date
2006-08-28 Defendant Orava begins employment with VetStem
2013-01-21 Defendant Farley begins employment with VetStem
2013-11-22 Defendant KRMC incorporated
2014-01-03 Defendant Farley's employment with VetStem ends
2014-04-01 Defendant VRP (later Enso Discoveries) founded
2015-03-31 Defendant Orava's employment with VetStem terminated
2016-09-27 U.S. Patent No. 9,453,202 issues
2018-06-28 VetStem sends notice letter and claim chart to Defendants
2019-05-30 Complaint filed

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

U.S. Patent No. 9,453,202 - Methods of Preparing and Using Novel Stem Cell Compositions and Kits Comprising the Same

Issued: September 27, 2016

The Invention Explained

  • Problem Addressed: The patent's background section describes the therapeutic use of adult stem cells as being limited by isolation and purification procedures that are "tedious and expensive" and can "result in cell death and loss of function," thereby limiting the availability of stem cell-based therapies (’202 Patent, col. 2:44-59).
  • The Patented Solution: The invention claims a method of preparing and using a therapeutic cell population from adipose tissue. The process involves obtaining adipose tissue from a mammal, processing it (e.g., through enzymatic digestion and centrifugation) to release and separate a population of cells from the fat, and then providing that cell population directly to a site of injury to treat inflammation ('202 Patent, col. 24:50-65). A key aspect of the patented method is that it "does not include isolating stem cells... from other cells" within the separated population, which avoids the costly and time-consuming culturing and purification steps that were common practice ('202 Patent, col. 24:15-18; Compl. ¶59).
  • Technical Importance: This streamlined approach was presented as a more efficient, less costly, and less time-consuming method for generating therapeutic cell populations compared to prevailing methods that required further culturing and expansion of stem cells before use (Compl. ¶59).

Key Claims at a Glance

  • The complaint asserts independent claim 1 against both Enso and KRMC (Compl. ¶¶61, 87).
  • The essential elements of independent claim 1 are:
    • A method of treating inflammation at a site of a musculoskeletal injury or disease in a mammal, comprising:
    • (a) preparing a cell population of adipose tissue-derived stem cells by (i) processing adipose tissue from the mammal to release cells and a fat layer, and (ii) separating the released cells from the fat layer;
    • (b) providing the resulting cell population directly to the site of injury to treat the inflammation;
    • The method explicitly "does not include isolating stem cells separated in (a)(ii) from other cells separated in (a)(ii)."
  • The complaint expressly reserves the right to assert additional claims ('202 Patent, ¶¶83, 94).

III. The Accused Instrumentality

Product Identification

  • Enso Discoveries LLC ("Enso"): "Adipose Derived Stem Cell Services" and "Validated Shipping System" kits for veterinary applications (Compl. ¶63).
  • Kansas Regenerative Medicine Center LLC ("KRMC"): Stem cell therapy services for human applications (Compl. ¶87).

Functionality and Market Context

  • The complaint alleges that Enso provides lab services to veterinarians. Vets collect adipose tissue from an animal patient and ship it to Enso's lab, where technicians process the tissue to isolate a "stromal vascular fraction ('SVF')" cell population described as a "heterogeneous mixture of cells which include adipose stem cells" (Compl. ¶¶43-44, 68). This SVF population is returned to the vet in a sterile vial for injection into the animal (Compl. ¶44). The complaint notes that Enso's marketing states that "culturing to increase cell numbers is not necessary" (Compl. ¶45).
  • The complaint alleges that KRMC offers stem cell therapies at its human clinics, where physicians collect adipose tissue via liposuction (Compl. ¶¶47-48). The tissue is then processed using "enzymatic digestion" and "centrifugation" to prepare an SVF cell population, which is injected into the patient at the site of injury (Compl. ¶¶49-51, 90-91). The complaint alleges this process is completed without "further isolating techniques, such as culturing" (Compl. ¶52). Both Enso and KRMC are alleged to offer these services commercially for profit (Compl. ¶¶46, 54).

IV. Analysis of Infringement Allegations

U.S. Patent No. 9,453,202 - Infringement Allegations (Enso)

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A method of treating inflammation at a site of a musculoskeletal injury or disease in a mammal... Enso's services are for treating musculoskeletal injuries in animals, and the treatment is stated to "provide long-term anti-inflammatory effects and decrease pain." ¶69 col. 24:50-54
(a)(i) processing adipose tissue obtained from the mammal to release cells therein... Lab technicians at Enso process adipose tissue collected from an animal patient to release and separate cells. This is alleged to involve treating the tissue with an enzyme and using centrifugation. ¶¶67-68 col. 7:18-24
(a)(ii) separating the cells released in (i) from the fat layer... Enso processes the adipose tissue and "separates the SVF from the adipose tissue." The separated cell population is then loaded into syringes. ¶44 col. 14:1-2
(b) providing the cell population... directly to the site of the musculoskeletal injury or disease... Enso instructs veterinarians to inject the processed cell population into the animal patient at the site of injury, such as an "affected joint." The complaint references a video demonstrating the injection of a horse's joint. ¶¶69, 76, 82 col. 12:59-62
wherein said method does not include isolating stem cells separated in (a)(ii) from other cells... The complaint alleges Enso's processed product is a "heterogeneous mixture of cells" and that Enso's own materials state that "culturing to increase cell numbers is not necessary." ¶¶43, 45, 68 col. 24:15-18

U.S. Patent No. 9,453,202 - Infringement Allegations (KRMC)

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A method of treating inflammation at a site of a musculoskeletal injury or disease in a mammal... KRMC's therapies are for treating human musculoskeletal conditions and are alleged to "promote healing and reduce pain and inflammation." ¶¶48, 51 col. 24:50-54
(a)(i) processing adipose tissue obtained from the mammal to release cells therein... KRMC personnel process harvested lipoaspirate using "enzymatic digestion... to release the stem cells" and growth factors. ¶¶49, 90-91 col. 7:18-24
(a)(ii) separating the cells released in (i) from the fat layer... Following enzymatic digestion, KRMC uses centrifugation "to separate the released cells to prepare an SVF cell population." ¶¶50, 91 col. 14:1-2
(b) providing the cell population... directly to the site of the musculoskeletal injury or disease... The prepared SVF cell population is "injected into the patient's body at the site of the musculoskeletal injury or disease being treated." ¶51 col. 12:59-62
wherein said method does not include isolating stem cells separated in (a)(ii) from other cells... The complaint alleges that the SVF cell population used by KRMC is "not obtained using further isolating techniques, such as culturing." A video on Enso's YouTube channel documents the use of the accused products to treat a horse suffering from navicular disease (Compl. ¶82). ¶52 col. 24:15-18

Identified Points of Contention

  • Scope Questions: A central dispute may arise over the negative limitation "does not include isolating stem cells... from other cells." The question for the court will be whether the defendants' processes for creating a "heterogeneous" SVF population, which necessarily involve some separation of cell types via centrifugation, constitute "isolating" as prohibited by the claim. The defendants may argue their process is a form of isolation, while the plaintiff will likely contend that "isolating" in the context of the patent refers to subsequent, affirmative steps (like culturing or antibody selection) aimed at creating a homogenous stem cell culture.
  • Technical Questions: Claim 1 requires processing via one of several enumerated techniques, including enzymatic treatment. The complaint alleges both defendants use enzymes (Compl. ¶¶68, 90). A technical question will be what evidence demonstrates that the specific enzymes, concentrations, and procedures used by the defendants fall within the scope of the "treating... with an enzyme" limitation as understood from the patent's specification and examples.

V. Key Claim Terms for Construction

  • The Term: "isolating stem cells... from other cells separated in (a)(ii)"
  • Context and Importance: This negative limitation is central to the patent's purported point of novelty and is critical to the infringement analysis. Infringement requires that this step is not performed. Practitioners may focus on this term because its construction will likely determine whether the defendants' production of a heterogeneous SVF mixture avoids infringement or is encompassed by the claim's prohibition.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (of what is prohibited): A defendant may point to language in the specification that describes purifying cells using "density gradients, centrifugation, and filtration" and using "negative separation methods... to remove one or more particular types of cells" ('202 Patent, col. 8:15-24). They could argue that their own centrifugation process, which separates cell populations, is a form of "isolating" that the patent describes, and thus their method is not covered by the claim.
    • Evidence for a Narrower Interpretation (of what is prohibited): The plaintiff may argue that "isolating" should be interpreted in light of the problems the patent sought to solve, namely avoiding "tedious and expensive" processes like "culturing the cells" or using "antibodies specific to stem cell surface markers" ('202 Patent, col. 2:44-53). Under this view, "isolating" would refer only to these subsequent, purity-enhancing steps, not the initial bulk separation of a mixed cell population from fat and other tissue debris.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Enso induces infringement by providing its veterinarian customers with instructions, protocols, training, and support materials that direct and encourage them to perform the patented method (Compl. ¶¶69-70, 76). It further alleges contributory infringement, stating that Enso's products and services are not staple articles of commerce and have no substantial non-infringing uses (Compl. ¶79).
  • Willful Infringement: The complaint alleges willful infringement against both Enso and KRMC based on their continued infringing activities after receiving actual notice via a letter and claim chart from VetStem on June 28, 2018 (Compl. ¶¶85, 97).

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

  • A core issue will be one of definitional scope regarding the negative limitation: How will the court construe the claim phrase "isolating stem cells... from other cells"? The case will likely turn on whether this phrase is interpreted narrowly to mean only affirmative, subsequent steps to create a pure stem cell line (e.g., culturing), or more broadly to encompass the defendants' standard process of using centrifugation to produce a heterogeneous stromal vascular fraction (SVF).
  • A key evidentiary question will be one of process and proof: Can the plaintiff demonstrate through discovery that the defendants' actual, day-to-day laboratory procedures for creating their cell therapies align with the allegations in the complaint and meet every element of the asserted claim, including the specific processing steps and the crucial negative limitation?
  • The case presents a question of intertwined liability: How will the parallel allegations of breach of contract and trade secret misappropriation by former employees influence the patent infringement analysis? Evidence of intent and copying from the contract claims could potentially impact the court's view on issues such as claim interpretation and willfulness for the patent claims.