The future may be getting brighter for stem cell researchers in the United States as restrictions for funding of stem cell research have been loosened, but efforts to commercialize stem cell technologies have faced a new hurdle with a recent decision by a European court regarding the patentability of human embryonic stem cells. In October 2011, the Court of Justice of the European Union (CJEU) issued a decision ruling that inventions related to human embryonic stem cells are unpatentable in the European Union.1 An aspect of the court’s decision that is particularly troublesome to stem cell practitioners is the court’s ruling that even if claims in a patent application do not require destruction of a human embryo per se, if the claim is construed to use cells that had to have been obtained by the destruction of a human embryo, then the claim is not patentable. The court ruling does not prohibit stem cell research in Europe but limits patent protection for human embryonic stem cells, methods that use human embryonic stem cells, and cells that are derived from human embryonic stem cells. This European court decision will have major implications for stem cell companies when formulating a global patent protection strategy and should be considered as part of the business plan.
The European court decision
The current CJEU decision stems from German Patent DE197586864 awarded to Oliver Brüstle of the University of Bonn. Claims of the Brüstle patent are generally directed toward populations of neural precursor cells derived from embryonic stem cells and are potentially useful for the treatment of neurodegenerative diseases such as Parkinson’s disease. It is noteworthy that the claims of the Brüstle patent do not specifically recite the use of human embryos to obtain human embryonic stem cells. Greenpeace brought the Brüstle patent to the German courts citing that the Brüstle patent was against the morality provisions of German patent law.
The German court held that the Brüstle patent was invalid in so far as it covers precursor cells obtained from human embryonic stem cells and processes for the production of these precursor cells. Brüstle appealed the German court decision. The German court stayed the proceedings and instead referred the case to the European court on the premise of an article of the Convention on the Grant of European Patents (CGEP) which states that “European patents shall not be granted in respect of: (a) inventions the commercial exploitation of which would be contrary to “ordre public” or morality; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States.”2 Although the Convention provides for the patentability of any invention, in all fields of technology, it should be noted that ethical or moral principles supplement the standard legal examination under patent law regardless of the technical field of the invention.3
Three questions posed to the European court
In passing Brüstle’s appeal to the European court, the German court posed three questions to the CJEU with regard to the patentability of human embryonic stem cells and with regard to the scope of human embryonic stem cells that might fall under such a ban. The answers to these questions provide insight into how the European court views the patentability of human embryonic stem cells. These insights should be taken into account by stem cell practitioners when developing strategies for protection and commercializing their technology in Europe.
Question 1 – The first question answered by the European court dealt with what is meant by the term “human embryos.” The German court provided some examples in an effort to help clarify the question.4
The European court answered that based on its interpretation of directives issued by the European parliament, any human ovum must, as soon as fertilized, be regarded as a human embryo.5 The court made it clear that this classification also applies to a non-fertilized human ovum into which a cell nucleus of a mature human cell has been transplanted and this classification applied to a non-fertilized human ovum that has been stimulated to division and development by parthenogenesis.6 With this approach, the court has essentially encompassed any cell capable of commencing to the development of a human being in the court's definition of “human embryo.”
As such, the European court has included a broad range of cells that fall under the scope of human embryo. Essentially, the court is including any totipotent cell that has the capacity to differentiate into a human being as a human embryo. This would include totipotent cells that are not generated by fertilization of an egg. Examples of potentially totipotent cells that may fall under the European court’s interpretation of a human embryo include stem cells generated by parthenogenesis, a method by which an egg is stimulated to replicate in the absence of fertilization, and cells generated by nuclear transfer, a process where the DNA of an egg is replaced with the DNA of a mature somatic cell.7 Nuclear transfer, referred to as Somatic Cell Nuclear Transfer (SCNT), is the process that was used to make Dolly the sheep. Clearly, the definition of a human embryo put forth by the European court will impact the scope of cells that fall under the guideline of cells that require the destruction of a human embryo or the previous destruction of a human embryo. In this regard, any technology that utilizes totipotent stem cells may be interpreted as utilizing human embryos.
In posing its first question, the German court specifically asked about cells obtained from a blastocyst, a stage at which stem cells are often obtained from embryos.8 The European court ruled that it was up to referring the court (i.e., the German court) to ascertain if cells derived from human embryos at the blastocyst stage are capable of commencing the process of development into a human being and therefore are included in the concept of “human embryo” within the meaning and for the purposes of European law.9 It is unclear if human egg cells, stimulated to replicate by parthenogenesis or nuclear transfer, are capable of forming a human being. Moreover, it is unclear how “commencing” the process of development of a human being will be defined. For example, how far along a development pathway will cells still be considered to be capable of developing into a human being? It will be interesting to see how the referring court rules on this issue. Clearly, this ruling will shape what sorts of stem cells will or will not be patentable in Europe.
Question 2 – The German court asked the European court what is meant by the expression “uses of human embryos for industrial or commercial purposes”? Specifically, does the use of human embryos for industrial use include any commercial exploitation within the meaning of Articles of the European convention, especially the use of human embryonic stem cells for the purposes of scientific research?10
The court answered that the use of human embryos for industrial or commercial purposes also covers the use of human embryos for purposes of scientific research.11 As outlined in the answer to Question 1, the use of human embryonic stem cells may be included in the use of human embryos for industrial or commercial purposes including scientific research. This answer may have implications for a wide variety of stem-cell-based patent applications ranging from applications directed toward therapeutics to diagnostics to research tools.
The court suggested that the only use of human embryos that may be patentable is for therapeutic or diagnostic purposes where the embryo is kept alive.12 This use would include human embryonic stem cells, for example, a use by which stem cells are removed from an embryo, treated ex vivo, and put back into the embryo for the treatment of genetic disorders.
This leads to an interesting possibility where certain human embryonic stem cells, or cells derived from human embryonic stem cells, may be patentable. Dr. Robert Lanza of Advanced Cell Technology has proposed a process to establish human embryonic stem cell lines by removing a single cell from an embryo during an in vitro fertilization.13 The embryo is not destroyed in this process, but rather, can be implanted in a mother.
Question 3 – Arguably the most important question asked of the European court is whether a stem cell technology is unpatentable pursuant to the court’s Directive even though the use of human embryos is not explicitly claimed in the patent, but the use of human embryos is a necessary precondition for the application of that teaching. For example, if the patent concerns a product whose production necessitates the prior destruction of human embryos, or because the patent concerns a process for which such a product is needed as base material. As noted above, claims of the Brüstle patent did not recite any cells or methods explicitly requiring the destruction of human embryos, but rather, relied on embryonic stem cell lines.
The court answered that the Directive excludes an invention from patentability where the technical teaching of the patent application requires the prior destruction of human embryos or their use as a base material, whatever the stage at which that takes place and even if the description of the patent application does not refer to human embryos.14
It will be interesting to see how broadly the European courts interpret the meaning of requiring the prior destruction of human embryos. For example, would a cell line be considered unpatentable if it could be generated by a process where embryos are not destroyed, for example, the process proposed by Dr. Lanza? Similarly, is the use of a gene unpatentable by the mere fact that the gene was identified in a human embryonic stem cell even if one can practice the use on other types of cells (e.g., induced pluripotent stem cells or adult stem cells)?
The impact of the European court decision on the European Patent Office
A key question that remains is how the European Patent Office (EPO) will react to the European court’s decision. The European Patent Office was formed as a result of the European Patent Convention and is not a part of the European Union. As a result, unlike the EU member nation courts, the EPO is under no obligation to follow Directives of the European court. Thus far, the EPO has not issued any directives in response to the European court’s decision. This could potentially lead to a bizarre situation where a stem-cell-related patent may issue from the EPO but will not be enforceable in most European nations.
In the past, the EPO has allowed patent applications directed toward differentiation of pluripotent stem cells to more mature phenotypes in cases where one could start with the established human embryonic stem cell lines. The EPO has taken the stance that human embryonic stem cells were publically available on or after May 9, 2003, the earliest date that human embryonic stem cells were deposited with the United States National Institutes of Health. Therefore, the EPO has allowed stem-cell related patents that have a priority date on or after May 9, 2003. For example, under current EPO practice, a patent application filed in January of 2004 and directed toward differentiation of human embryonic stem cells to a mature phenotype, such as a liver cell or a neuron, may be considered patentable if the invention could have been practiced with an established human embryonic stem cell line at the filing date of the application. Under the European court’s decision, however, such a patent application may be considered unpatentable because obtaining the starting material, a human embryonic cell, would have required the destruction of a human embryo at some point in time.
How will the European Patent Office react to the Brüstle decision?
It is hard to predict how the EPO will react to the European court’s Directive, but one can get a glimmer of the EPO’s thoughts on this matter by looking at the EPO’s “WARF Decision.”15 The WARF decision is based on a European patent application filed by the Wisconsin Alumni Research Foundation (WARF) and naming James Thomson as inventor. The patent relates to Dr. Thomson’s development of methods to culture human embryonic stem cells. In the WARF decision, the Enlarged Board of Appeal of the EPO ruled that a patent application filed by WARF was unpatentable in view of Article 6 of the European convention which states that “European patents shall not be granted in respect of: (a) inventions the commercial exploitation of which would be contrary to “ordre public” or morality; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States.” This is the essentially the same legal standard held against Brüstle.
It is noteworthy, however, that the WARF patent application was filed before the May 9, 2003 date when established human embryonic stem cells were publically available. As such, cells recited in the claims of the WARF patent required the destruction of human embryos, and the WARF decision does not contradict current EPO practice. But given the European court’s Directive, particularly with regard to the unpatentability of cells that required prior destruction of human embryos, it is quite possible that the EPO will no longer allow human embryonic stem cell cases filed after May 9, 2003.
We note that European patent examiners are requiring provisos to the effect that claimed stem cells are not derived from human embryos or are not human embryonic stem cells. For example, the EPO granted a patent to Dr. Brüstle based on the German patent, but the claims include the phrase “with the proviso that the method does not include the destruction of human embryos.”
What about patent protection for other types of stem cells and stem cell technologies?
On a more positive note for stem cell scientists and practitioners, the European court decision inpacts only human embryonic stem cells. It does not cover a number of other types of stem cells, such as induced pluripotent stem cells (iPS) and adult stem cells. iPS cells are generated by taking mature somatic cells and forcing them to dedifferentiate to pluripotent cells. For example, skin cells from a patient can be dedifferentiated to produce pluripotent stem cells which, in turn, can be differentiated into a different type of cell such as a liver cell. As no embryos are involved in this process, iPS cells do not fall under the directive of the European court decision. All in all, iPS cells show great potential as an alternative to human embryonic stem cells.
Adult stem cells also do not fall under the Directive of the European court. Adult stem cells are cells that are obtained from nonembryonic sources, like adults, and are pluripotent and/or multipotent for a particular subclass of cells. For example, blood stem cells are cells that can differentiate into any of the many types of blood cells including red blood cells, T cells, B cells, etc. Other adult stem cells that show promise for the development of therapeutics include liver stem cells, pancreatic stem cells, skin stem cells, and neural stem cells.
It is important to note that the European decision only affects human embryonic stem cells. Other stem cell technologies, such as mouse embryonic stem cells, do not fall under the court's Directive.
Additionally, the European decision arguably does not affect the ability to patent the technologies themselves that are needed for effectuating human ES cells into treatments, provided that the claims are carefully crafted to be directed to these technologies themselves. These types of technologies could include cell culture media, growth factor formulations, incubators, and other equipment for growing cells.
Patentability of human embryonic stem cells in other countries
Although the prospects of earning protection for human embryonic stem cell technologies in Europe does not look very promising, the protection of human stem cell technologies is available in a number of countries including the United States, Canada, and Australia. Patent protection for stem cell technologies also is available in Japan, although Japanese patent law does include morality limitations. So far, the patentability for human embryonic stem cells has not reached the courts in Japan. In China, on the other hand, human embryonic stem cells are not patentable according to Chinese patent laws.16
In the United States, three patents awarded to WARF were challenged using the United States Patent and Trademark Office’s reexamination procedures. These patents are based on Dr. Thomson’s work and correspond to the technology that was subject to the EPO’s WARF Decision. Two of the WARF U.S. patents survived the reexamination procedure with relatively few changes. The third WARF U.S. patent was deemed invalid during the reexamination procedure and is now under appeal by WARF. It is noteworthy however, that in the U.S., the WARF patents were challenged based on prior art rather than for morality issues.
Moving forward in the EU
The CJEU decision is sure to have an impact on companies wishing to commercialize stem cells. Stem cell patentees will have to reassess their portfolios as the national courts and EPO react to the CJEU decision. Stem cell practitioners should consider alternatives to embryonic stem cells, such as iPS cells. On a broader note, stem cell companies will have to assess their business strategies in view of weaker patent protection in Europe compared to other jurisdictions where patents directed toward human embryonic stem cells are permitted, such as the U.S. and Japan. Chris Mason of the University of London has even suggested that the European decision may be a “boon” for stem cell science by lifting restrictions on the use of certain cells or methods.17 In the meantime, stem cell practitioners should keep a watch on how the European national courts treat the CJEU decision and what changes the EPO will make in view of the CJEU decision.
Moving forward globally with other alternatives
Companies and investors who are involved with stem cell technology should weigh the varying degrees of patent protection available for human embryonic stem cell technologies in different countries when developing a legal and business strategy for commercializing human embryonic stem cells. Is it better to practice the technology in a jurisdiction that affords strong protection or is it better to practice the technology in a jurisdiction where there are few intellectual property restrictions? Where is the market demand for this particular stem cell technology? Would it be better to rely on trade secret as a way to protect the stem cell technology, particularly when dealing with manufacturing processes? If trade secret protection is available in that country, then patent filings (and subsequent publications) in other countries could jeopardize trade secret protection.
Other alternatives to patent protection exist to create market hurdles for competitors as well. One such alternative is to use the data protection afforded by a regulatory agency to create a barrier to market entry. For example, in Europe, eight years of data exclusivity is afforded to the innovator after the innovator’s product is authorized for sale in the EU before others can apply for authorization based on the innovator’s clinical data. An additional two years will pass before others can market their product in the EU state.
Thus, companies and investors who are seeking to develop and/or invest in stem cell technologies, including human ES cells, should confer with their patent attorneys to develop a comprehensive global strategy that aligns the scientific discoveries with the business interests while maximizing legal protection for the discovery.