State, Sturm in treatment tug-of-war

28/07/2022 - 15:19

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The state’s health department and leading researcher Marian Sturm remain at loggerheads over the rights to a life-changing cellular treatment.

State, Sturm in treatment tug-of-war
Dr Sturm worked for WA Health for more than four decades, spearheading Royal Perth Hospital’s Cell and Tissue Therapies facility. Photo: Kerry Faulkner

The state’s health department and leading researcher Marian Sturm remain at loggerheads over the rights to a life-changing cellular treatment she developed while working for Royal Perth.

It has been 14 months since the East Metropolitan Health Service launched the lawsuit against Dr Sturm, claiming she was reaping rewards from the success of a treatment she created for the health department.

Dr Sturm worked for WA Health for more than four decades, serving as the head of Royal Perth Hospital’s Cell and Tissue Therapies facility up until her retirement last year.

She began developing the cellular treatment for those battling inflammatory illnesses at the hospital back in 2005 before founding public company Isopogen in order to raise capital for clinical trials.

The following year, it was awarded an Australian patent and formally registered in her name and that of her company Isopogen.

In the years since, the product has proven effective in the treatment of Crohn's disease and the company has received patent approval for its StemSmart technology in the US, South Africa, Japan, Israel, and Singapore.

But in a writ, the health department claims Dr Sturm and fellow employees Dawn Driscoll and Kathryn Shaw breached their employment contracts as shareholders of the company and by exploiting the intellectual property rights.

EMHS is now chasing compensation and confirmation it owns all rights to the patent, including any funds derived from Dr Sturm’s shareholding in the capital raising vehicle.

But the parties involved are also at odds over how the lawsuit should play out.

The latest dispute centres around the interpretation of a clause in an agreement EMHS signed with Isopogen, under which the pair allegedly agreed to resolve any disputes by private mediation.

In addition, lawyers for the state’s health department are pushing to amend the writ, which the defendants argue is designed to remove any reference to a covenant in the agreement that WA Health would not challenge ownership of the invention.

In a Supreme Court hearing before Justice Jeremy Curthoys this morning, Isopogen, which is being represented by high-profile lawyer Martin Bennett, sought to halt the proceedings.

Mr Bennett indicated his client did not oppose being sent to mediation, unlike other parties involved in the dispute, but did take issue with a move to amend the writ.

Lawyers for the state’s health department said they were not averse to mediation, highlighting that it had unsuccessfully attempted to do so before, but insisted a number of steps needed to take place before it could occur.

Mr Bennett argued that, under the terms of the agreement, all intellectual rights to the medicine were exclusively Isopogen’s and lobbied for the matter to be dealt with swiftly.

“In the field of scientific research, time is of the essence,” he said.

“The urgency of the resolution of this matter, coupled with the fact that the licenses cover the use of an invention designed to extend and save lives, means it ought to be dealt with in a commercial fashion.

“The plaintiff rushed to file the writ and now seeks to amend it in order to delete reference to the license agreement because it contains a covenant that it will not challenge ownership of the invention.

“It’s embarrassing to have it in the writ.”

But lawyers for WA Health submitted that the conclusion of the pleadings process was an essential prerequisite to moving to mediation, putting contentions and counter contentions on the table.

Justice Curthoys pointed out that if the parties were serious about mediation and getting a result, they would progress with or without particulars and pleadings.

He adjourned the hearing and reserved his decision.

A spokesperson for EMHS told Business News the organisation was restricted in what it could say about the matter publicly, but highlighted the treatment was researched and developed using company resources and time.

"EMHS funds, and operates medical research facilities which researches and develops a range of therapies for the benefit of all Western Australians," the spokesperson said.

"The intellectual property upon which the stem cell therapy advocated by Dr Sturm rests, was researched and developed at those facilities by employees of EMHS including Dr Sturm.

"EMHS at all times works for the betterment of Western Australia, and its people."

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