Patents, Cell Therapy and the European Union

Before President Barack Obama’s 2009 Executive Order that reversed the ethics-driven ban on U.S. Federal funding for human embryonic stem cell research, the European Union had a clear advantage in stem cell research. However, now that the way is clear in the United States to accelerate embryonic stem cell research there, some worry that current regulations in Europe might undermine investor confidence and thus hamper funding for research in Europe.

The ethical debate surrounding the use of embryonic stem cells impacted not only the United States, but Europe as well. In the European Union, the debate has affected patent processes there, thus affecting funding and commercialization of the technologies in question.

The Legal Protection of Biotechnological Inventions (EU Directive 98/44/EC), which governs embryonic stem cell patents among other technologies, was intended to create a consistent approach across member states that would allow Europe to fully exploit opportunities in biotechnology. According to the directive, patents may not be granted for the human body at various stages of development, including the embryo stage. Therefore, cells that can develop into a human being cannot be patented, but adult cells and those that can be developed into body parts may be patented. While the European Patent Office grants most patents in Europe, the same patents must also be enforced in individual member states, where national courts may interpret the directive differently. In some cases, resistance has mounted to granting patents on any inventions using stem cells, leading some countries to resist implementing the directive into national law.

While the EU Directive bans patents for products that use embryos for industrial or commercial purposes, a European Patent Office board of appeal ruled that stem cells cannot be patented if they are obtained only by destruction of a human embryo. Until recently, this was the only way stem cells could be obtained. As such, the patent office’s ruling effectively created a ban on patents that involve any stem cells.

However, now that stem cells can be obtained without destruction of the embryo (e.g., adult stem cells or umbilical cord blood stem cells), the way is likely cleared for patents to be granted for embryonic stem cell inventions where a stem cell bank is listed as the source.

Needless to say, the uncertainty created by the directive and subsequent rulings has made some investors wary of investing in a market where the resulting technology may remain unprotected.

In the aggregate market of cell therapy and tissue engineering (recognizing the less strict regulatory environment of tissue engineering compared to cell therapy), the European Union generates less than half the revenues of the U.S. market, but this is expected to change (see below) as Europe expands its adoption of both tissue engineering and cell therapy in clinical practice.

Source: MedMarket Diligence, LLC; Report #S520.

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