University of California Regents Waives Sovereign Immunity in Response to Inverse Condemnation Suit

Agrees to Appear in Federal Court to Answer NeuroGrafix Allegations of Patent Infringement

LOS ANGELES, CA (May 16, 2011) – NeuroGrafix, a Santa Monica, California company specializing in medical imaging technology announced today that NeuroGrafix and the University of California Regents have executed a stipulation in which the UC Regents agrees to appear in Federal District Court to respond to patent infringement allegations by NeuroGrafix.

NeuroGrafix is currently engaged in patent litigation against Siemens Medical Solutions and Siemens Aktiengesellschaft in the Central District Court of California. In that matter, Siemens is represented by lead counsel Gregg LoCascio of Kirkland and Ellis and NeuroGrafix is represented by lead counsel Marc Fenster of Russ August and Kabat. University of California Regents is represented by Carolyn Chang of Fenwick and West in responding to the inverse condemnation lawsuit in California Superior Court.

Senior Federal District Judge Mariana R. Pfaelzer issued a Markman Claim Construction Order in the NeuroGrafix v Siemens case on May 5th, 2011. Aaron G. Filler, MD, PhD, FRCS – CEO of NeuroGrafix says: “We didn’t get everything we hoped for in the Markman Order, but we are very pleased that the Judge has accepted our arguments on several important claim construction elements that describe inventive elements of our patent (US 5,560,360).”

Dr. Filler is the lead inventor for MR Neurography – the method that makes nerves visible in Magnetic Resonance Imaging scans and also for Diffusion Anisotropy Imaging which allows for fiber tracts inside the human brain to be visualized and avoided during brain surgery.

An inverse condemnation cause for action is typically asserted when a state seizes real property for the public good, but fails to employ due process in planning the seizure and fails to compensate the property owner for the seizure. The US Supreme Court’s support of sovereign immunity for the States has appeared to immunize them from liability for patent infringement. However, a number of legal scholars have pointed to comments by the Supreme Court suggesting that patent holders may be able seek an alternative remedy by asserting inverse condemnation when a State makes unauthorized use of intellectual property.

According to Dr. Filler: “There are a variety of unique aspects of this case that may have led the UC Regents to choose to answer for patent infringement in Federal Court as opposed to answering for inverse condemnation in State Court. However, this result proves that a carefully constructed and argued inverse condemnation action can be deployed as part of a viable strategy to hold States and State entities responsible for the type of egregious patent infringement that we complained of in this filing.”

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