Cord Blood Registry Wins Legal Battle in Patent Dispute With PharmaStem Therapeutics, Inc. Largest Newborn Stem Cell Bank Announces Victory in Delaware Patent Case

SAN BRUNO, Calif., Sept. 20 /PRNewswire/ -- Cord Blood Registry(TM)-CBR, the nation's leading newborn stem cell bank, announced today that it has won a decisive legal victory against PharmaStem Therapeutics, Inc.'s attempts to assert claims for alleged patent infringement relating to the cryopreservation of newborn "cord blood" stem cells.

In Delaware on September 15, 2004, U.S. District Court Judge Gregory Sleet issued an Order and Judgment, overturning the jury verdict against CBR that was entered in October 2003. The Court found that "there is simply no evidence in the record to support the jury's affirmative answer" that CBR infringed on a patent claimed by PharmaStem regarding preservation and storage of umbilical cord blood, and entered a judgment against PharmaStem and in favor of CBR.

Additionally, the Court overturned the jury's finding that CBR infringed another patent asserted against it by PharmaStem, and ordered a new trial, holding that the jury's finding "was against the great weight of the evidence." "We have always held to the belief that the jury verdict was wrong," says Tom Moore, CEO and founder of CBR. "We appreciate Judge Sleet's careful consideration of the evidence in this trial."

The judge also denied a number of PharmaStem's motions, including an injunction and monetary damages. Importantly, the judgment outlined that patent infringement cannot be claimed against physicians because they are not involved in "selling or offering to sell the cord blood units." PharmaStem currently has a number of lawsuits filed against obstetricians and hospitals for patent infringement.

"This decision validates our longstanding position that under no circumstances, can obstetricians, midwives or hospitals be held liable for patent infringement in regards to cord blood collection for patient families," says Moore. Derived from the blood remaining in the umbilical cord following birth, newborn stem cells are proven effective in treating a variety of cancers and blood disorders, and have demonstrated ability to regenerate other tissue in the human body. There is a fast growing market for expectant families wishing to preserve these cells for their families' future benefit. CBR is the industry's largest bank, with approximately 250,000 cryopreserved units at its Tucson facility.

The patents in question, U.S. Patent No. 5,192,553 and 5,004,681, which involve the cryopreservation of newborn stem cells for use in transplant medicine, were found to be invalid both in Europe and Asia as far back as 1999, but were issued in the U.S. Both patents are currently under re-examination by the Patent and Trademark Office.

About CBR
Cbr Systems, Inc. "Cord Blood Registry," is the industry leader in newborn stem cell cryopreservation for familial use in transplantation therapy and regenerative medicine. Once cryopreserved, the stem cells may be used in treatments for the newborn, siblings and any compatible genetic family member, with no (or significantly decreased) rejection, which minimizes the need for immune suppression in the recipient. To date, CBR has provided stem cells for 34 client treatments, which is more than all other family cord blood banks combined. The remarkable cells may also be expanded (using new technology) to very high numbers in culture creating the potential for multiple uses from a single cord blood unit. CBR's current focus includes the processing of newborn stem cells to; improve outcomes in patients being treated for cancers such as leukemia; promote cardiac repair resulting from heart attack or congestive heart failure, and provide treatment for autoimmune diseases such as multiple sclerosis and rheumatoid arthritis. CBR operates a web site http://www.cordblood.com, or may be contacted at 888-CORD-BLOOD (888-267-3256).

Contact: Stephen Grant, VP, Corporate Communications, of Cbr Systems, Inc., +1-650-635-4235, or cell, +1-650-678-4999, or sgrant@cordblood.com.

Web site: http://www.cordblood.com

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