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European Industry, Academia Watch Closely As EPO Weighs Legality of WARF hESC Claims

Fresh from closing the books on the validity of its seminal human embryonic stem cell patents in the US, the Wisconsin Alumni Research Foundation now awaits the top European patent authority to determine the patentability of similar claims in the European Union.
Unlike in the US, where the dispute over WARF’s stem cell patents revolved around whether patented claims were obvious or discovered by another inventor, the European Patent Office is considering the moral issues surrounding WARF’s hESC-related patent application.
According to experts, the decision, which is expected to be handed down by the EPO in a matter of weeks, could have a wide-ranging effect on how future hESC-based therapies and research tools are developed and sold in Europe.
The European patent dispute began in July 2004 when the examining division of the European Patent Office refused WARF’s European patent application No. 96,903,521, entitled “Primate embryonic stem cells.”
WARF had filed the application on behalf of the University of Wisconsin-Madison and inventor James Thomson, the UW-Madison professor who invented the method for isolating hESCs.
According to EPO documents, the EPO’s examining division refused the patent application because specific claims did not comply with a morality exclusion contained within the European Patent Convention of 1973, which provides a single, legal framework for granting European patents.
Specifically, the examining division argued that in regard to the generation of hESC cultures, “the use of human embryos as starting material was described in the application as originally filed as being indispensable,” and that such a method would violate a stipulation of the EPC prohibiting the use of a human embryo as starting material for generating an industrial product.
In September 2004, a few weeks after the examining division’s decision, WARF filed an appeal, which the examining division referred to the EPO’s Technical Board of Appeal. After written and oral proceedings, the board further referred WARF’s appeal to the Enlarged Board of Appeal, the highest authority of the EPO.
After more than two years, on June 24 the Enlarged Board of Appeal heard testimony from WARF, Rainer Osterwalder, director of media relations for the EPO, told BTW last week.
The Board heard the case in one day and, according to Osterwalder, its chairman announced that it would publish a decision on the patent in writing, but did not say when he would issue the ruling.
Osterwalder told BTW that he expected that early autumn — September or October — is the most likely time for the decision to be published, but stressed there is not yet a precise fixed date.
Whatever the outcome, the decision could have a significant impact on the overall patentability of hESC-based methods and products in Europe.
Osterwalder explained that “the decision of the Enlarged Board will not be on the WARF case directly, as this will have to be done by the Technical Board competent in the case.” However, the decision “will give us [hopefully] an answer on the patentability of human embryonic stem cells under European patent law,” he added.

“The patent environment means that although a lot of work has been done and a lot of progress has been made, there is a huge question mark about how those inventions are going to be exploited.”

According to Gareth Morgan, an attorney with the intellectual property practice of London-based law firm Taylor Wessing, the uncertainty surrounding the patents has many within the European academic and industrial biotech arenas worried that a failed appeal could stifle innovation in the field.
“The patent environment means that although a lot of work has been done and a lot of progress has been made, there is a huge question mark about how those inventions are going to be exploited,” Morgan told BTW last week.
“Obviously a lot of the patents that have been filed in Europe won’t just be filed in Europe; they’ll be filed in the US as well,” Morgan said. “But removing the European market for a European company is obviously a major deal. At the moment there is a worry that basic research will perhaps be done in Europe, and the real commercial activity will go on elsewhere” as companies set up shop in the US, [Asia], or any other place where “the patent environment is a little more lax,” Morgan added.
“So this decision by the Enlarged Board is going to be pretty important for paving the way for the European stem cell industry moving forward,” he said.
Morgan said that the main question the Enlarged Board has been wrestling with over the last two years is whether it can actually make judgments on patent morality when there isn’t a consensus across EU member states.
According to Morgan, who is also a member of the UK Stem Cell Bank’s commercialization working party, patentability in Europe is muddled by the fact that EPO pronouncements do not necessarily have an effect on European patent law within the member states. Likewise, European law doesn’t actually apply to the EPO, as member states of the European Patent Convention include all EU member states but also include a few others.
“But the practicalities are that the two try to work as closely together as possible,” Morgan said.
“Just granting patents across Europe doesn’t necessarily say that EU member states have to allow those inventions to be commercialized,” he added. “I think the best that the stem cell industry can hope for is that … the Enlarged Board … washes their hands of the whole morality issue, because there is not a consensus across Europe, and says, ‘We’re going to let EU member states work this out for themselves. We will allow the patents, but on a member state level, you can actually outlaw the commercialization of these patents.’”
If the EPO’s Enlarged Board of Appeal recommends that the Technical Board uphold the rejection of WARF’s patents, it is unclear what recourse WARF or other parties with pending hESC-related patent applications might have. Calls to WARF were not returned in time for this publication.
According to Morgan, parties can apply for patents on an EU member-state-by-member-state basis, and the UK is currently granting patents on stem cells, although authorities there have drawn a distinction between totipotent cells, which are not being patented; and pluripotent cells, which are.
In general, the UK is a hotbed of academic and industrial activity in the area of hESCs and therefore stands to have a greater interest than other European nations in the EPO’s decision, Morgan said. Across the Atlantic, companies like US-based Geron have a significant number of European patent claims in this area; while other major players in the UK may include commercial offshoots of Scotland’s Roslin Institute, companies such as University of Sheffield spinout Axordia, and academic entities such as Sheffield, Kings College London, the University of Newcastle, and Roslin’s academic components.
Morgan also said that Scandinavia, the Netherlands, Belgium, and the more northern parts of Germany are likely to welcome a verdict that allows the patents, while more of the Southern European states still have moral qualms about hESC research. “Even when you talk about companies in places like France, the public attitude toward this kind of research is still kind of hostile,” he said.
Overall, Morgan said, the major difference between the US and Europe as far as hESC research is concerned is that in the US, funding is hard to come by but patenting is much easier; while in Europe, there are many ethical issues still surrounding hESC patents, but research funding is not as difficult to come by.
Late last month, the US Patent and Trademark Office issued reexamination certificates for the two most important base embryonic stem cell patents WARF holds, officially concluding a reexamination process for the patents that began in October 2006 (see BTW, 3/5/2007) and was decided in WARF’s favor in March of this year (see BTW, 3/12/2008).
The patent office issued certificates for US Patent Nos. 5,843,780 and 6,200,806, which relate to the isolation and culture of primate and human embryonic stem cells. The ruling is not appealable, meaning that the claims of the patents stand confirmed and enforceable.
New York-based Public Patent Foundation, California-based Foundation for Taxpayer and Consumer Rights, and Burnham Institute for Medical Research scientist Jeanne Loring brought the original challenge.
The groups also challenged a third patent, US No. 7,029,913, which was also upheld in WARF’s favor earlier this year. However, as this more recently issued patent follows a slightly different process, it is still subject to appeal, WARF said in a statement.

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