By Huan Zhu —

With recent developments in biotechnology, the legal issues surrounding its patent law since the 1980's have been a growing concern.  Among all the subcategories of biotechnology, hESCs (human embryonic stem cells), one of the most controversial categories, is receiving different patent system treatments in different countries.  The rules and regulations regarding patents, their applications, issuance, and litigations are studied and compared in the United States, the European Patent Organization (EPO), and China.  The analysis is based on the general theory and principles of patents along with the existing patent laws.

The essence of patent law is to reward inventors, through legal intellectual property protection, in order to both stimulate and promote innovation.  The main task of patent law is to protect a legal monopoly while maintaining a fair competition market.  With regard to hESCs, this task is more complicated than with other subjects.  There are obvious issues due to the close relation to human embryonic stem cells and human beings along with a symbolic component of human dignity.  People question both the legitimacy of human embryonic stem cell research and the state granted monopoly on related research findings.  In addition, it is questionable whether patent law, in its current form, can keep the perfect balance between stimulating hESC innovation in industry and ensuring that patients can benefit from inventions derived from hESC research.  Due to this collection of considerations, different countries have developed various, and sometimes competing, viewpoints on hESC patentability and patent protocol.

For instance, China explicitly opposes the patentablity of hESCs in its agency manual for morality consideration under the Chinese Patent Law because patenting hESCs is contrary to morality and public interest.

Similarly, the EPO, based on ambiguous language in the European Patent Convention (EPC), excludes hESCs' patentability during patent examination by broadly interpreting the morality clause under the EPC, as long as hESCs used in inventions are derived from human embryos.  A similar interpretation is issued in a recent case Brüstle v Greenpeace e.V before the Court of Justice of European Union, stating that any stem cells derived from human embryos are considered "human embryos," and therefore not patentable, regardless of whether the purpose is for business and industry or therapy and treatment.  Nevertheless, whether this interpretation will be adopted by the European Patent Office is still in question, the same as how national patent offices will respond to the decision.

In contrast to both China and the EPO, the United States has become the main progenitor of hESC patents, although debates on the validity of those patents have begun and continue to be of interest.  Instead of taking morality into account as in China and the EPO, people have questioned the validity of hESC patents on the grounds of their novelty and non-obviousness.  The novelty and non-obviousness clauses are believed by some to be an alternative method to exclude hESCs from patenting due to the lack of morality considerations in US patent law.

According to a survey on hESCs-related patents issued and patent applications filed before the US Patent and Trademark Office, the European Patent Office, and the State of Intellectual Property Office of the PRC, two elements may constitute the law and policy differences, especially between the US and China.  One factor is the development of hESC research.  The US owns more than half of the hESC-related patents issued in the three patent offices, which gives the US more motivation to protect the results and findings than other countries.  The other possibly influential element is the ownership types of patent holders.  In the US, individuals and companies are the primary owners of hESC-related inventions, while government-affiliated research institutes and public universities are the main owner types in China.  Whether inventions are circulated in the free market determines whether patent rights are needed to function as an innovation stimulus, which may ultimately affect the patentability policy adopted by these governments.

Huan Zhu is a policy research assistant with DB Capitol Strategies PLLC in Washington, D.C.  Prior to joining DB Capitol Strategies, she earned a Doctorate in Juridical Science from the University of Kansas School of Law in 2011 after completing her dissertation entitled "A Comparative Study on Human Embryonic Stem Cell Patent Law in the United States, the European Patent Organization, and China."  This article is based in part on a presentation Dr. Zhu gave at the Biolaw 5.0: Law at the Frontiers of Biology conference at the University of Kansas School of Law on October 21, 2011.

By Kevin E. Noonan —

In the aftermath of the European Court of Justice's decision last month that patent claims encompassing human embryonic stem cells (hESCs) were patent-ineligible in Europe on public order and morality grounds (see "European Court of Justice Renders Stem Cell Decision"), some commentators argued that the decision had a "silver lining":  hESC development unhampered by stem cell patents.  This view was challenged at the time, by several comments on an e-posting of the argument in a Nature News article, and today with regard to efforts to produce synthetic blood in the U.K.

The Nature News article, by Ewen Callaway, cited several European stem cell researchers on the negative impacts of the ban, including Oliver Brüstle at the University of Bonn, Germany (it was his patent that was invalidated by the ECJ's ruling) ("European ban on stem-cell patents has a silver lining").  This reaction was characterized as akin to saying that "the sky is falling," and the article contrasted this sentiment with the "more moderate view" that the ruling had positive aspects; for example, a "physician scientist," Chris Mason of University College London was quoted as saying that "[i]f anything the ruling is an opportunity.  It's not the end of stem cells in Europe."  A genuinely more moderate view was voiced by Nick Bassil, from Kilburn and Strode, who simply said that "[t]ime will tell how serious [the impact of the ruling] is going to be."  In addition, the article cited alterative aspects of stem cell technology that remain patentable including "[g]rowth media, equipment and chemicals that help scientists work with stem cells," citing Julian Hitchcock of Field Fisher Waterhouse, as well as methods for using stem cells rather than the stem cells themselves (although patent claims on such methods may also be suspect under the Court's ruling, depending on how such methods are claimed).  Finally, other types of intellectual property protection, such as trade secret, was cited, depending on the complexity of the techniques and methodologies needed to properly grow hESCs (paradoxically advocating non-disclosure of the "manufacturing processes" used as a beneficial alternative to the disclosure of such methods in patents and neglecting the societal consequence that non-disclosure promises to impede rather than promote progress).  And finally, the article suggests that many of the hESC patents will have expired by the time the therapies are ready for the clinic, again citing Dr. Mason, who suggests that the lack of patents could promote an "anything goes" climate for stem cell research.

Comments on the article rebutted this rosy view, noting that the ban was "far-reaching" and extended to "any downstream products" of hESCs (Comment #28580).  Others noted that the principles invoked by the ECJ in banning hESC patenting (the dignity of the individual) could be applied to protecting the dignity of other individuals, patients (Comment #28589), and that the Court "invent[ed] moral standards" for Europe unnecessarily (Comment #28617).

But the question remains whether the ruling will foster or hinder innovation, and while it will take perhaps a generation to understand the full extent of the ban, it is worthwhile noting its effects as they develop.  One such effect involved efforts by U.K researchers to create synthetic blood from stem cells.  As reported last month by FierceBiotech, The Daily Mail, and The Independent, the effect on the ban on these efforts may not be as beneficial as some have hoped (or posited).  The goal is to produce O-negative blood cells, which as the "universal donor" type would satisfy the unmet demand for blood.  Despite some successes, notably by Edinburgh University's Marc Turner, it is reported that researchers are considering "moving away from embryonic stem cells to iPS" (induced pluripotent stem cells, derived from mature human cells) in light of the ECJs ruling.  The reason is simple "[w]ithout patents . . . no private company would ever touch their work, let alone gamble the money needed to launch commercial operations."  As Dr. Turner told The Independent:

The NHS is not in the business of developing products and to see this technology going forward we would need private investment.  In the broadest sense, the patent ruling will have an impact on possible investment by the private sector.

As noted by Fiona MacRae in The Daily Mail, artificial blood is "the holy grail," having the potential to alleviate chronic blood shortages (particularly in acute situations like battlefields and car crashes) as well as providing an assured pathogen-free blood supply.  While teams from Edinburgh and Bristol Universities have made "thousands of millions" of red blood cells from bone marrow stem cells, this is mere proof of concept in view of the "2.5 million million" red blood cells contained in the amount of blood used in a typical blood transfusion.  The promise is in hESCs, which "are easier to multiply in large numbers," she says.

These efforts are threatened by the ECJ's ruling; as quoted in The Independent, Professor Sir Ian Wilmut (who cloned the sheep Dolly) expressed the widely-held opinion that "[u]nfortunately [the ruling] will make it less likely that companies in Europe will invest in the research to develop treatments to use embryonic stem cells for treatment of human diseases."  The Independent article also noted that over 100 "spare" in vitro fertilization (IVF) embryos from fertility clinics have been used to generate hESC lines and that one of them, RC-7, had been used to produce mature human red blood cells (albeit not O-negative cells).

This is just one data point in what can be expected to be a long experiment on the effects of patenting on innovation.  It has the benefit that these effects can be evaluated in "real time" and not retrospectively.  Whether the negative effects of the ECJ's ruling outweigh those benefits cannot be predicted.

For additional information regarding this topic, please see:

• "No More Patents for Cells Derived from Human Embryos in EU," October 18, 2011
• "European Court of Justice Renders Stem Cell Decision," October 18, 2011
• "European Court of Justice Considers Embryonic Stem Cell Ban," May 11, 2011