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Patenting Human Embryonic Stem Cells: A Comparison of European and US Approaches

Thursday, November 3, 2011

Aude Gerspacher | Bloomberg Law Although stem cell research has the potential to provide treatment for numerous diseases and disorders, it remains a controversial topic due to the nature of these cells, in particular human embryonic stem cells. Unlike their adult counterparts, embryonic stem cells are pluripotent, i.e. they possess the ability to differentiate into any cell type. The controversy centers on the establishment of human embryonic stem cell lines which involves the destruction of a human embryo. As with any other technology, the availability of patents can promote research and innovation in the realm of stem cell research. Presently in the United States, human embryonic stem cells and their uses are patentable. The patentability of human embryonic stem cells in Europe had not been clear until a recent decision issued by the Court of Justice of the European Union ("CJEU") ruling that an invention requiring the destruction of a human embryo or its use as a base material, whatever the stage at which that takes place and even if the description of the technical teaching does not refer to the use of a human embryo, is unpatentable.1 This ruling provides clear and strong boundaries on what is patentable in the stem cell field in Europe. Not surprisingly, the U.S. and Europe differ on the issue of stem cell patenting. This is primarily due to the differences between the respective patent laws. Europe's relevant laws contain a morality clause which allows the refusal of patents on moral grounds. The U.S. Patent Act does not contain such a clause. The U.S. Patent and Trademark Office "" Board of Patent Appeals and Interferences ("BPAI") recognized this fact in noting that if the requirements of patentability have been met, a ground of rejection based on the lack of beneficial utility is not proper. The BPAI stated that the USPTO "should not be the agency which seeks to enforce a standard of morality."2 Following the recent CJEU decision, this article reviews the status of human embryonic stem cell patenting in the U.S. and Europe to provide an understanding of the resulting policies.

U.S. Policy and Laws Relating to Stem Cell Research

Although the U.S. Patent Act does not address the moral or ethical issue relating to the use of human embryos, an active debate exists in the U.S. The laws and policy of the U.S. relating to stem cells have been greatly influenced by stem cell research itself, changing as new research proved beneficial, especially the discovery of human embryonic stem cells. Before 2001, and after the success of in vitro fertilization, United States federal laws and regulations prohibited the use of federal funds for research that experimented on human embryos. In 1995, the NIH Human Embryo Research Panel advised the Clinton administration to allow the grant of federal funding for research on embryos which were left over from in vitro fertility treatments as well as embryos specifically created for experimentation.3 The Clinton administration agreed that leftover embryos from fertility treatments could be used in research but disagreed on the use of embryos created solely for research purposes. Amidst this debate, Congress passed the Dickey Amendment4 in 1995 which prohibited any federal funding to the Department of Health and Human Services ("HHS") for use in research that resulted in the destruction of an embryo, regardless of its source. This settled the debate at the federal government until 1998 when privately funded research led to the discovery of human embryonic stem cells. This breakthrough research prompted the Clinton Administration to reexamine the guidelines for federal funding of embryonic research. In 1999, the Clinton administration formally recommended that human embryonic stem cells harvested from embryos discarded after in vitro fertility treatments, but not from embryos created expressly for experimentation, be eligible for federal funding.5 The administration interpreted the Dickey Amendment to allow funding of human embryonic stem cell research as long as such research did not itself directly cause the destruction of an embryo. Accordingly, HHS issued its proposed regulation allowing federal funding for human embryonic stem cell research in 2001. At that time, the Bush administration blocked the enactment of these HHS guidelines. The Bush administration authorized research on existing human embryonic stem cell lines, but not on human embryonic cell lines not currently in existence.6 The Bush administration's guidelines differed from the Clinton administration guidelines which did not distinguish between currently existing and not-yet-existing cell lines. In 2009, President Obama removed the restriction on federal funding7 for newer stem cell lines and signed into law the Omnibus Appropriations Act of 20098, which still contained the provision banning federal funding of research in which a human embryo is destroyed. Although this provision prevents federal funding for the creation of new cell lines, the Obama administration's policy allows federal funding of research involving existing stem cell lines as well as any new cell lines developed with private funds. The latter widely expanded the subject matter which could be federally funded.

Patentability of Human Embryonic Stem cells in the U.S.

The U.S. Patent Act provides that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."9 None of the "conditions and requirements" of the Act involve moral or ethical grounds. Courts have interpreted this provision broadly with respect to biological materials. In In re Bercy10, the U.S. Court of Customs and Patent Appeals ("CCPA") ruled that pure bacterial culture was not a "product of nature" and therefore patentable subject matter under the Patent Act. The CCPA reasoned that a bacterial culture is patentable because itdoes not exist in nature in pure form and must be produced in a laboratory. The U.S. Supreme Court confirmed this reasoning inDiamond v Chakrabarty11, ruling that a purified culture of genetically engineered bacteria was patentable. The court specified that it understood that Congress had intended to "include anything under the sun that is made by man" as patentable subject matter.12 Accordingly, if an invention as claimed in a patent constitutes a form that does not exist in nature, it is patentable. In line with these court decisions, in 1999, the USPTO""stated its position was that purified and isolated stem cell lines were patentable subject matter.13 The USPTO, however, does not allow patent claims covering a human being.14 Accordingly, tt is possible that totipotent stem cells may be considered unpatentable subject matter by the USPTO. Totipotent stem cells can differentiate into embryonic cell types and have the potential of developing into a whole human being. Pluripotent stem cells are once removed as the descendants of totipotent cells and can differentiate into nearly all cells derived from any of the three germ layers which give rise to tissues and organs during development. To date, no claims have issued directed to totipotent cells, but U.S. patents claiming pluripotent cells have issued. Examples of pluripotent stem cell patents include those issued in the name of The Wisconsin Alumni Research Foundation ("WARF"), the non-profit technology transfer office of the University of Wisconsin at Madison. The first WARF patent15 issued in 1998. Two related patents16 have subsequently issued and all three have been the subject of a reexamination proceeding filed by the Public Patent Foundation and the Foundation for Taxpayer and Consumer Rights (later renamed Consumer Watchdog). During reexamination, all three patents were amended to specify that the cells were derived from a pre-implantation embryo. Consumer Watchdog filed an appeal in connection with the reexamination of one of the patents, alleging that the patent should be revoked. In April 2010, the BPAI reversed the examiner's withdrawal of claim rejections during reexamination and held the patent invalid on grounds of obviousness.

European Policy and Laws Relating to Stem Cell Research

The European Union has not yet issued regulations regarding stem cell research, leaving it to its member states to decide. As a result, in Europe, stem cell research using human embryos is permitted in Sweden, Finland, Belgium, Greece, Great Britain, Denmark and the Netherlands, but is illegal in Germany, Austria, Ireland, Italy, and Portugal.17 Several international organizations have attempted to harmonize policy on human cloning and the production and destruction of human embryos for research. The United Nations has adopted a declaration on human cloning, calling on member states to prohibit therapeutic cloning. The World Health Organization, however, has opposed a ban on cloning techniques in stem cell research. The Council of Europe, an international organization separate from the European Union, adopted the Convention on Human Rights and Biomedicine which bans the creation of embryos solely for research purposes.18

Patentability of Human Embryonic Stem Cells in Europe

The European Patent Convention ("EPC") prohibits the patenting of the human body at various stages of development, or the discovery of one of its elements.19However, it is accepted that such elements isolated from the human body or produced separately may be patentable subject matter. As in the U.S., the European Patent Office ("EPO") grants patents to human cells, including human adult stem cells. However, the EPC excludes certain otherwise patentable subject matter that is deemed contrary to public order or morality.20 The EPC provides specific guidelines for biotechnology inventions and explicitly excludes processes for cloning human beings, processes for modifying the germ line genetic identity of human beings, and uses of human embryos from industrial or commercial purposes.21 Interestingly, these guidelines clearly prohibit the patenting of processes that generate stem cells through the use, i.e. destruction, of embryos, but it is unclear whether a stem cell itself is patentable as it is not explicitly excluded. The Enlarged Board of Appeals ("EBA") of the EPO addressed this issue in a decision during the appeal of the European counterpart22 of the WARF patents. The EPO rejected the WARF application for claiming subject matter excluded from patentability under Rule 28(c) of the EPC prohibiting the patenting of inventions relating to the use of human embryos.23 WARF appealed to the Technical Board of Appeal which referred the question of the patentability of human embryonic cells to the EBA. The EBA affirmed the examiner's rejection, basing its decision on the fact that production of the claimed stem cells necessitated the destruction of a human embryo, which the EBA characterized as an industrial purpose within the meaning of Rule 28(c). WARF argued that the claims are directed to cells, not embryos, but the EBA found that Rule 28(c) applies not only to subject matter of the claims but to the invention as a whole, which necessarily includes the processes associated with the invention.24

Recent CJEU Decision on Patentability of Human Embryonic Stem Cells

Oliver Brustle, a German researcher, is the owner of a patent claiming isolated and purified neural precursor cells, the process of making these cells which involve human embryonic stem cells, and uses of these neural precursor cells. Greenpeace brought an action in German court seeking to invalidate Brustle's patent on the ground that the claims violated Article 6(2)(c) of European Directive 98/44/EC (the "Directive").25 The German court sought guidance from the CJEU on the interpretation of the Directive. A preliminary opinion was issued by the Advocate General which the CJEU considered in making its decision. — Preliminary opinion of the Advocate General In issuing the preliminary opinion,26 the Advocate General (the "AG") adopted similar reasoning to that of the EBA in the WARF appeal and further addressed the issue of the nature of an embryo. In doing so, the AG interpreted Article 5 and Recital 16 of the Directive which refers to the human body "at any stage in its formation and development" as unpatentable subject matter. The AG concluded that anything which could become a human body would be excluded from patentability under this provision. Accordingly, a human embryo is not patentable. The AG conceded that the claimed cells were pluripotent cells and not capable by themselves of becoming a fully formed human body. The AG, however, considered the origin of these cells. The process of isolating Brustle's cells included the destruction of a blastocyst, an early stage embryo. The AG concluded that an invention is not patentable under the Directive where the process of the invention necessitates the destruction of human embryos or their use of starting material, even if the description of that process does not reference human embryos.27 — Judgment of the CJEU In an October 18, 2011 decision, the CJEU ruled that Article 6(2)(c) of the Directive must be interpreted as meaning that a human embryo is defined as (1) any human ovum after fertilization, (2) any non-fertilized human ovum into which the cell nucleus from a mature human cell has been transplanted, and (3) any non-fertilized human ovum whose division and further development have been stimulated by parthenogenesis. The CJEU also ruled that the exclusion from patentability in the Directive also covers the use of human embryos for scientific research and that only therapeutic or diagnostic uses which are applied to a human embryo and are useful to it may be patentable. Finally, the court ruled that the Directive excludes an invention from being patentable where the technical teaching requires the destruction of a human embryo, or its use as a starting material, whatever the stage of development, and even if the description of the technical teaching does not reference the use of human embryos. Article 27(2) of the Agreement on Trade-Related Aspects of Intellectual Property28 ("TRIPS") states that "[m]embers may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public (public policy) or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law." Article 53(a) of the EPC states that "[e]uropean patents shall not be granted in respect of: (a) inventions the commercial exploitation of which would be contrary to "ordre public" or morality."29 Article 6(2)(c) of the Directive states that "the following, in particular, shall be considered unpatentable: . . . (c) uses of human embryos for industrial or commercial purposes." The relevant German Law30 states that patents shall not be awarded for "uses of human embryos for industrial or commercial purposes." In making its decision, the CJEU answered the following three questions: (1) the definition of human embryo in Article 6(2)(c) of the Directive; (2) the meaning of the expression "uses of human embryos for industrial or commercial purposes;" and (3) whether technical teaching is considered unpatentable pursuant to Article 6(2)(c) of the Directive even if the use of human embryos does not form part of the technical teaching claimed, but is a necessary precondition for the application of that teaching. The CJEU found that even though the Directive is silent on the definition of human embryo, Article 6 of the Directive should be interpreted as meaning that "any human ovum after fertilisation, any non-fertilised human ovum into which the cell nucleus from a mature human cell has been transplanted and any non-fertilised human ovum whose division and further development have been stimulated by parthenogenesis constitute a 'human embryo' within the meaning of Article 6(2)(c) of the Directive." It should further be interpreted to mean that it is for the referring court to ascertain, in the light of scientific developments, whether a stem cell obtained from a human embryo at the blastocyst stage constitutes a ''human embryo'' within the meaning of Article 6(2)(c) of the Directive. The CJEU further found that the exclusion from patentability concerning the use of human embryos for industrial or commercial purposes in Article 6(2)(c) of the Directive also covers use for purposes of scientific research. The court did make explicit that any use for therapeutic or diagnostic purposes which is applied to a human embryo and is useful to that human embryo is patentable. Lastly, the court found that Article 6(2)(c) of the Directive excludes an invention from patentability where the technical teaching which is the subject matter of the patent application requires the prior destruction of human embryos or their use as base material, whatever the stage at which that takes place and even if the description of the technical teaching claimed does not refer to the use of human embryos.

Future of Stem Cell Research

The decision of the CJEU effectively imposes a ban in Europe on patenting scientific work that uses embryonic stem cells on the grounds that it represents an immoral use of human embryos. The ruling is broad and far-reaching as it practically renders unpatentable any invention which at any point of the process uses a human embryo. The CJEU's decision is binding on the member states of the European Union and may have the effect of slowing stem cell innovation in Europe. Countries outside of Europe, e.g. the U.S., may then take the lead in this new field of regenerative medicine. Stem cell technology has the potential to revolutionize medicine and provide cures where none have existed. Balancing moral and ethical concerns and the promise of extraordinary treatments which could vastly improve human life is a tricky proposition. Europe has for now chosen on moral grounds to potentially stifle research in this important field. At present, it seems the U.S. has struck a more even balance, but one that could easily be upset by an incoming administration in the White House. The opportunity to promote embryonic stem cell research exists, but it remains to be seen whether it will be fully realized. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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