Ruling Ends Core Patent Dispute Between Cross-Town Rivals, SkinMedica and Histogen

11/28/11Follow @bvbigelow

A federal court ruling issued before the Thanksgiving holiday appears likely to end nearly three years of patent litigation between Histogen, a San Diego regenerative medicine startup, and Carlsbad, CA-based SkinMedica, which provides cosmetics and skin-care products.

“We are happy to now have this matter officially behind us,” Histogen founder and CEO Gail Naughton says in a statement issued today by the San Diego startup.

The Nov. 21 ruling issued by U.S. District Judge Janis Sammartino concludes that Histogen is not infringing on two key SkinMedica patents. “The cloud has lifted for us,” Histogen spokeswoman Eileen Naughton Brandt told me this afternoon.

A spokeswoman for SkinMedica declined to comment today.

In its patent infringement lawsuit, SkinMedica alleged that Histogen and its cosmetics subsidiary, Histogen Aesthetics, were infringing on the patents covering its “NouriCel” product line and related proprietary technology for culturing human cells in growth media.

Histogen is focused on the long-term development of living tissue skin grafts and related products that would require regulatory approval. To generate revenue in the meantime, however, the startup formed Histogen Aesthetics to develop its own brand of skin care and dermatology products. Histogen says it also has begun early tests of a hair replacement product made of growth factors and other compounds expressed by fibroblasts, the cells that form connective tissue.

In her 14-page ruling, Sammartino distinguishes between SkinMedica’s patented process for growing a three-dimensional matrix of living human cells and Histogen’s approach, which encourages living cells to grow on the surface of microscopic beads. The cell-covered beads eventually clump together, and also grow into a three-dimensional matrix. By drawing a clear distinction between the two processes, Sammartino rejects SkinMedica’s arguments that the two approaches were equivalent.

The judge’s Nov. 21 ruling was preceded by a related ruling in May that addressed the meaning of more than a dozen disputed terms used in the companies’ patent filings. The patent infringement allegations formed the core part of SkinMedica’s case, but its complaint also includes other allegations, such as misappropriation of trade secrets and breach of contract.

Brandt says the issues that remain constitute “a very small piece of the case that does not affect our ability to do business or provide skin care services.” Still, it’s unclear whether SkinMedica intends to appeal the ruling or press ahead on other aspects of its complaint. SkinMedica’s lawyers did not immediately respond to my queries earlier today.

Histogen, which was founded in 2007, was still in startup mode when SkinMedica filed its patent suit in early 2009. At that time, Histogen’s CEO told me the allegations prompted a group of angel investors to withdraw their planned $2.4 million investment, triggering a funding crisis that forced Histogen to lay off all 36 of its employees.

Histogen’s workforce is now back to 21 employees, Brandt says, and the company has restarted negotiations with potential strategic partners. She says Histogen also has restarted early stage clinical trials of its treatment for hair loss in Asia, but she’s reluctant to say how long it will be before the company is ready to launch a hair restoration product in the U.S. market. Because Histogen’s product must be injected in the scalp, Brandt says the experimental hair loss treatment would be regulated as a biologic that requires FDA approval.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • Jonathan

    Good for Histogen. SkinMedica pulled a sneaky move filing their lawsuit when they did. Histogen should get millions for the damage that SkinMedica did to them.