StemCells, Inc. has consented to a stay, on mutually acceptable terms, of its patent infringement lawsuit against Neuralstem, Inc., pending re-examination by the US Patent and Trademark Office (PTO) of the four patents that are the subject of the litigation. In its lawsuit,

StemCells alleges Neuralstem's contemplated stem cell products and drug screening and discovery services infringe the four patents. StemCells stated that Neuralstem's petition to the PTO to re-examine these patents was expected given the scope of the issued claims in these patents, which cover Neuralstem's current business, including the human spinal stem cells it uses.

StemCells noted that petitioning for patent re-examination and a stay is a procedural tactic often used by defendants to delay a trial. StemCells further noted that the PTO regularly grants such re-examination requests and often preliminarily rejects the re-examined patents, but then subsequently upholds patent claims in later stages of the review and appeals process.

Regardless of the outcome of the re-examination of these four patents, StemCells believes there will be no material effect on its patent portfolio. StemCells owns or has exclusive licenses to 53 issued or allowed US patents and more than 150 granted or allowed patents worldwide. StemCells' patent portfolio includes claims covering cultures containing either human or other mammalian neurospheres or neural stem cells, derived from any tissue source, whether cultured in suspension or adherent conditions.

"We have examined the prior art relied upon by Neuralstem in its petitions and cited by the PTO. We are confident that all of these patents will emerge from this process substantively unchanged," said Martin McGlynn, president and chief executive officer of StemCells. "We firmly believe that in time Neuralstem will be found by the courts to be infringing our patents."

StemCells, Inc. is a clinical-stage biotechnology company focused on the discovery, development and commercialization of cell-based therapeutics to treat diseases of the nervous system, liver and pancreas.