A federal appeals court has reinstated a long-running MRI patent lawsuit that NeuroGrafix brought against Brainlab.

Santa Monica, Calif.-based NeuroGrafix claims that Brainlab (Munich, Germany) infringed on an MRI imaging patent. Two lower courts had dismissed the suit, but a three-judge U.S. Court of Appeals panel ruled yesterday that the latest ruling was “procedurally improper” and revived the dispute.

NeuroGrafix sued Brainlab for infringement in 2012 in the Northern District of Illinois. The case was later classified as multidistrict litigation (MDL) because of other defendants’ locations.

The patent in question describes methods and systems for creating detailed images of neural tissues by using an MRI application known as diffusion tensor imaging (DTI). In DTI, pulsed magnetic field gradients are applied in two orthogonal (perpendicular) directions in a region containing the nerve tissues for which a precise image is sought, according to the appeals court decision. NeuroGrafix alleged that users of Brainlab’s FiberTracking software directly infringed the patent and that BrainLab induced the software’s users to infringe it through statements in its manual and advertisements.

In May 2016, Brainlab filed the first of its two motions for summary judgment, relying on customer-protection provisions of settlement agreements that NeuroGrafix had made with MRI-equipment makers Siemens, GE and Philips. Brainlab argued that its FiberTracking software is used to process the output from MRI systems made by those manufacturers and that FiberTracking users do not infringe under the terms of the settlement agreements.

Brainlab filed a second motion for summary judgment in February 2018, arguing was that users of the software do not commit direct infringement and that therefore, Brainlab could not be liable for induced infringement. An MDL court in Massachusetts granted Brainlab’s second summary judgment motion in May 2018, concluding that although “FiberTracking is capable of both infringing uses and non-infringing uses,” NeuroGrafix had pointed to no evidence that any FiberTracking users actually used the software in an infringing manner.

In June 2018, the case ended up back in the Illinois court, which NeuroGrafix asked to reconsider the MDL court’s summary judgment order. The district court refused and dismissed Brainlab’s invalidity counterclaim without prejudice, producing a final judgment. Yesterday’s ruling is the result of NeuroGrafix’s latest appeal.

The appeals court panel decided that because the MDL court ultimately agreed that the FiberTracking software is capable of infringing and non-infringing uses, it should have granted NeuroGrafix summary judgment to dismiss Brainlab’s case.

NeuroGrafix is not off the hook, however. The company “must ultimately make a showing that the accused software was actually used in an infringing manner by Brainlab (for direct infringement case) or by one or more of Brainlab’s customers (for indirect infringement),” Appeals Court Judge Richard Taranto wrote for the panel.