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B-splines are a convenient tool for nonrigid registration, but ensuring invertibility can be challenge. This paper describes a new penalty method that is devised to enforce a sufficient condition for local invertibility and smoothness of nth order B-spline based deformations. Traditional direct Jacobian penalty methods penalize negative Jacobian determinant values only at grid points. In contrast, our new penalty method enforces the sufficient condition for invertibility directly on the B-spline coefficients by using a modified quadratic penalty function so that it enforces invertibility globally over a 3D continuous domain. This approach also saves computation time and memory compared to using Jacobian determinant values. We apply this method to 3D CT images of a thorax at inhale and exhale.