Regents of the University of California Suit Announced
NeuroGrafix Challenges the Sovereign Immunity that Allows the State of California to Engage Freely in Patent Infringement – Suing The Regents of the University of California Under a Theory of Inverse Condemnation
October 15, 2010 – Today NeuroGrafix, a Santa Monica, California company specializing in advanced medical imaging technology – announces that it has filed suit today in California Superior Court (Central District) asserting Inverse Condemnation in connection with an aggressive program of patent infringement that it alleges was intentionally and willfully carried out by the University of California system.
In the United States of America, the 50 states are immune from prosecution for patent infringement because they cannot be forced to appear in Federal Court to answer charges of patent infringement.
The Regents of the University of California have gone into Federal Court to sue various infringers of the Regents’ own patents, winning nearly a billion dollars of damages for patent infringement against the University of California over the past two decades. However, due to the one way street of sovereign immunity, the University has gone to the US Supreme Court (see reference 1 below) to confirm that it cannot be touched when it infringes patents held by others.
Legal scholars such as University of California law professors Eugene Volokh (ref 2) and Peter Menell (ref 3) have pointed out that the State law of Inverse Condemnation may provide an opportunity for relief on behalf of patent holders whose intellectual property is being infringed by a State. The US Supreme Court has also suggested this remedy (ref 4) although its use remains unproven.
NeuroGrafix CEO Aaron G. Filler, MD, PhD, FRCS is the lead inventor on two technologies that have revolutionized medical imaging – Magnetic Resonance Neurography (MRN) – which makes it possible to reliably see nerves in an MRI scan and DTI (diffusion tensor imaging) – which makes it possible to see neural tracts in the human brain or muscle fibers in the heart.
Inverse Condemnation is related to the law of Eminent Domain. A State may take a citizen’s property for reasons of public benefit (classically -‐ seizing a property to put through a needed highway). However under guarantees of Life, Liberty and Property in the Constitution of the United States (5th Amendment) and under similar protections in the Constitution of the State of California (Article I, Section 19) – the State must employ due process to plan a seizure and it must fairly compensate the property owner for the property that it takes. When a State seizes the property of a citizen without due process and without compensation – that State becomes liable to suit for Inverse Condemnation by the citizen seeking to gain compensation for the property seized.
The patent at issue – US 5,560,360 – is owned by the University of Washington but is under exclusive license to NeuroGrafix. The lawsuit alleges that profits from the use of the invention are due in part to the People of the State of Washington but that these rights have been seized without compensation to unlawfully redirect the benefits to the People of the State of California instead. Base on information filed by NeuroGrafix in a patent infringement lawsuit against Siemens earlier this year, tens of millions of dollars may be at stake.
Dr. Filler says: “A major part of the invention was done in the UK at the University of London (St. Georges Medical School) and another part was done in Washington State. The abusive action by the Regents under cover of the sovereign immunity of the State of California takes the benefit away from the UK and away from the State of Washington. Not only is this unjust, but it flies in the face of efforts by the United States to force countries like China to respect our patents. How can we expect other countries to respect American innovation, when our own States carry out aggressive programs of violation of patent rights? As an inventor and owner in a small technology company it is very difficult to compete against the commercial power of a State that operates as a pirate entity outside the law of the United States.”
References
1 – US Supreme Court – “Regents of University of California v. Genentech, (119 S.Ct. 2388 (1999))
2-‐ Volokh, Eugene -‐ Sovereign Immunity and Intellectual Property (73 Southern California Law Review 1161 (2000))
3-‐ Menell, Peter -‐ Economic Implications of State Sovereign Immunity from Infringement of Federal Intellectual Property Rights (Federalism Symposium, Loyola of Los Angeles Law Review, 14 March, 2000)
4-‐ US Supreme Court -‐ “Florida Prepaid Postsecondary Education Expense Board, Petitioner v. College Savings Bank and United States” (527 U.S. 627, 119 S.Ct. 2199, 144 L.Ed.2d 575 (1999))
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