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European Court Ruling on Embryonic Stem Cells: Ripple Effects
Cell Stem Cell
Letters production of cells that are to be used clinically will have to be provided when organizations seek regulatory approval. By contrast, patents provide transparency and thus facilitate competition and progress. The judgment refers only to ESCs, and a great deal of research is being carried out with other types of stem cells. A stated objective of Greenpeace UK is to bring pressure to increase research with alter-
natives to hESCs. There is no doubt that researchers do consider alternatives and that great interest is placed upon iPSCs. Patent applications made in the future can encompass both sources of pluripotent cells, but iPSCs are a relatively new invention, so early applications such as that made by Oliver Bru¨stle did not. It would be wasteful and it would delay treatment of patients if existing protocols for use of hESC derivatives are not taken
to the clinic because the procedure cannot be patented. Finally, there is a real concern that Europe will be perceived as reactionary and resistant to progress in light of this regulation and that as a result, companies will choose to invest in other regions of the world. It is certainly to be hoped that this is not the case, because Europe has a fine record of research with both embryonic and tissue stem cells.
European Court Ruling on Embryonic Stem Cells: Ripple Effects Nancy J. Koch,1 Elona Baum,1 and Alan Trounson1,* 1California Institute for Regenerative Medicine, 210 King Street, San Francisco, CA 94107, USA *Correspondence: [email protected] DOI 10.1016/j.stem.2011.11.001
The recent Court of Justice of the European Union (2011) opinion in Bru¨stle v. Greenpeace caught the attention of the California Institute for Regenerative Medicine (CIRM) and many others as a result of its severe restriction on the patentability of inventions arising from embryonic-stem-cell-related research. Strong criticism of the decision immediately arose in some quarters, including dire predictions that the ruling marked the end of human embryonic stem cell (hESC) research in Europe and, ultimately, that Europe would not have access to resulting therapies (Naik, 2011). At CIRM we fund academic and commercial scientists conducting stem cell research ranging from basic science through to early clinical work, and a significant proportion of our funded projects involve hESCs. We appreciate that patent protection can be an important incentive for investment, and that it also often promotes innovation as it allows innovators time and a mechanism to recoup their outlay (Rai et al., 2010). Our view is that the impact of the recent Court ruling on stem cell research and regenerative medicine will be significant but varied. In some instances, the ruling may deter European hESC research, in others such research may nonetheless continue or even increase; in still others, no impact may occur.
In the area of basic or foundational hESC research, for example, we would not expect a significant impact from the Court ruling provided scientists expect that there will be continued funding of such research by government and notfor-profit entities. We would not expect that a diminished ability to obtain patent protection for basic research inventions would materially decrease research funding from these sources. Government funders tend to be less profit-driven than commercial funders. Moreover, hESCs presently remain the ‘‘gold standard’’ for regenerative medicine research (Smith et al., 2009; Fung and Kerridge, 2011). We believe scientists conducting basic research will be reluctant to focus exclusively on adult stem cells or even induced pluripotent stem cells (iPSCs) given the unique advantages offered by hESCs. With respect to translational hESC research, the situation is more complicated. At this stage of research and development, profit-driven biotechnology and pharmaceutical companies are more actively involved. To the extent that the lack of patent protection following the Court ruling decreases the profit available (e.g., because patented inventions cannot be licensed and injunctions cannot be obtained to protect hESC patented inven-
tions), biotechnology and pharmaceutical companies may be less motivated to invest in European hESC research. That effect may be even more dramatic for startup companies. A strong patent portfolio traditionally has been a prerequisite for attracting venture capital in the life sciences field. As reported by a U.S Department of Commerce white paper, ‘‘In a large-scale survey conducted in 2008, 76% of startup managers reported that VC investors consider patents important to funding decisions.’’ (Rai et al., 2010.) On the other hand, we would not predict a complete dearth of European commercial investment in the hESC sector in the EU for several reasons. First, companies can still protect some of their work as traditional trade secrets. Second, as is often said of biologics, ‘‘The product is the process.’’ EU regulators will likely require that any company wishing to compete would have to incur the large expense of preclinical and clinical trials using their particular stem-cell-based therapy (Tam, 2010). Third, to varying degrees throughout Europe, the ‘‘Bolar Exemption’’ (European Union, 2004) limited patent protection for certain types of research at this phase even before the Court ruling. Finally, the effect of the
Cell Stem Cell 9, December 2, 2011 ª2011 Elsevier Inc. 499
Cell Stem Cell
Letters Court ruling on EU companies will vary depending on their specific circumstances. Companies that would have faced a freedom to operate problem because of hESC patents held by others may now be more likely to start, or continue, hESC research programs because the Court’s ruling renders such patents unenforceable. Companies working on the ‘‘improvement’’ of hESC related-technologies, for instance, which would have faced patent infringement litigation or would have had to pay royalties, may find themselves more incentivized to perform hESC research in the EU following the Court’s ruling. By contrast, companies holding foundational hESC inventions might be incentivized to work in jurisdictions that offer patent protection for hESC inventions (e.g., the USA). Despite the Court ruling we believe that sponsors of hESC-based therapies will locate trials in Europe for a number of reasons. Companies developing hESC therapies will ultimately desire to sell their products on the European market. The EMA may require data from European clinical trials before it approves of any future hESC-derived therapy. Moreover, recent studies suggest that over 50% of products headed for FDA approval are in clinical trials that involve foreign study sites (Levinson, 2010). Finally the possibility that some companies could be attracted to Europe
because of this decision cannot be discounted. Although the Court ruling does not directly impact the patentability of hESC inventions in the U.S., it will have a ripple effect there. American companies facing a freedom to operate problem because of U.S. patents held by others may now reconsider their business plans. Moving their research operations to Europe becomes a more attractive option because the EU counterparts of those patents are no longer enforceable. These companies will balance the benefit afforded by the new EU patent landscape against the protection that the Hatch Waxman Act provides for certain research activities in the U.S. and the significant costs of moving an already established and ongoing research operation. A cost differential that disfavors the U.S. as an alternative to the EU may incentivize companies to consider moving their trials and preclinical efforts to places such as India or China. As Yogi Berra once said, ‘‘It’s tough to make predictions, especially about the future.’’ Everyone will need to wait and see how various stakeholders in the research community actually respond to the Court’s ruling. Nevertheless, we are confident that the reaction will be dependent on many individual variables. As a result, we expect that some of the currently critical hESC research and development in the EU will continue to flourish.
REFERENCES Court of Justice of the European Union (2011). Oliver Bru¨stle v Greenpeace eV. Judgment of the Court (Grand Chamber) of 18 October 2011. Case C-34/10. http://eur-lex.europa.eu/LexUriServ/ LexUriServ.do?uri=CELEX:62010CJ0034:EN:HTML. European Union (2004). Directive 2004/27/EC of the European parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC of the Community Code relating to Medicinal Products for Human Use, Official Journal of the European Union, L 136/34. http://ec.europa.eu/health/files/ eudralex/vol-1/dir_2004_27/dir_2004_27_en.pdf. Fung, R.K., and Kerridge, I.H. (2011). Bioethics 2011, 4. Levinson, D.R. (2010). Challenges to FDA’s ability to monitor and inspect foreign clinical trials. Report of the Office of Inspector General, Department of Health and Human Services. June 2010, OEI-0108-00510. http://oig.hhs.gov/oei/reports/oei-0108-00510.pdf. Naik, G. (2011). Patent ruling sets back EU stemcell scientists. Wall Street Journal: Health Industry, October 19, 2011. http://online.wsj.com/article/ SB10001424052970204346104576639010759884 794.html. Rai, A., Graham, S., and Doms, M. (2010). Patent reform: unleashing innovation, promoting economic growth & producing high-paying jobs. A White Paper from the U.S. Department of Commerce, April 13, 2010. http://www.commerce.gov/sites/ default/files/documents/migrated/Patent_Reformpaper.pdf. Smith, K.P., Luong, M.X., and Stein, G.S. (2009). J. Cell. Physiol. 220, 21–29. Tam, J.W.Y. (2010). Georgetown Law J. 98, 535–536.
Bru¨stle Decision Is Unhelpful, but Not Catastrophic James Lawford Davies1,2,* and Alex Denoon2 1Institute
of Genetic Medicine, International Centre for Life, Newcastle University, Newcastle upon Tyne, NE1 3BZ, UK Davies Denoon, 14a Clerkenwell Green, London, EC1R 0DP, UK *Correspondence: [email protected] DOI 10.1016/j.stem.2011.11.007 2Lawford
On October 18, 2011, the Court of Justice of the European Union (CJEU) issued its much anticipated and controversial decision in the case of Bru¨stle v. Greenpeace (Court of Justice of the European Union, 2011). The Court ruled that inventions involving human embryonic stem cells
(hESCs) are unpatentable. While this decision is unhelpful for the field, its impact may be more limited and nuanced than others have suggested. In brief, the case related to a patent filed by Professor Oliver Bru¨stle in 1997 that described and claimed the isolation and
500 Cell Stem Cell 9, December 2, 2011 ª2011 Elsevier Inc.
purification of precursor cells generated from hESCs. Greenpeace argued in proceedings launched initially in Germany in 2004 that this patent breached Article 6(2)(c) of the EU Biotechnology Directive, which states that inventions involving the ‘‘use of human embryos for industrial or
Letters production of cells that are to be used clinically will have to be provided when organizations seek regulatory approval. By contrast, patents provide transparency and thus facilitate competition and progress. The judgment refers only to ESCs, and a great deal of research is being carried out with other types of stem cells. A stated objective of Greenpeace UK is to bring pressure to increase research with alter-
natives to hESCs. There is no doubt that researchers do consider alternatives and that great interest is placed upon iPSCs. Patent applications made in the future can encompass both sources of pluripotent cells, but iPSCs are a relatively new invention, so early applications such as that made by Oliver Bru¨stle did not. It would be wasteful and it would delay treatment of patients if existing protocols for use of hESC derivatives are not taken
to the clinic because the procedure cannot be patented. Finally, there is a real concern that Europe will be perceived as reactionary and resistant to progress in light of this regulation and that as a result, companies will choose to invest in other regions of the world. It is certainly to be hoped that this is not the case, because Europe has a fine record of research with both embryonic and tissue stem cells.
European Court Ruling on Embryonic Stem Cells: Ripple Effects Nancy J. Koch,1 Elona Baum,1 and Alan Trounson1,* 1California Institute for Regenerative Medicine, 210 King Street, San Francisco, CA 94107, USA *Correspondence: [email protected] DOI 10.1016/j.stem.2011.11.001
The recent Court of Justice of the European Union (2011) opinion in Bru¨stle v. Greenpeace caught the attention of the California Institute for Regenerative Medicine (CIRM) and many others as a result of its severe restriction on the patentability of inventions arising from embryonic-stem-cell-related research. Strong criticism of the decision immediately arose in some quarters, including dire predictions that the ruling marked the end of human embryonic stem cell (hESC) research in Europe and, ultimately, that Europe would not have access to resulting therapies (Naik, 2011). At CIRM we fund academic and commercial scientists conducting stem cell research ranging from basic science through to early clinical work, and a significant proportion of our funded projects involve hESCs. We appreciate that patent protection can be an important incentive for investment, and that it also often promotes innovation as it allows innovators time and a mechanism to recoup their outlay (Rai et al., 2010). Our view is that the impact of the recent Court ruling on stem cell research and regenerative medicine will be significant but varied. In some instances, the ruling may deter European hESC research, in others such research may nonetheless continue or even increase; in still others, no impact may occur.
In the area of basic or foundational hESC research, for example, we would not expect a significant impact from the Court ruling provided scientists expect that there will be continued funding of such research by government and notfor-profit entities. We would not expect that a diminished ability to obtain patent protection for basic research inventions would materially decrease research funding from these sources. Government funders tend to be less profit-driven than commercial funders. Moreover, hESCs presently remain the ‘‘gold standard’’ for regenerative medicine research (Smith et al., 2009; Fung and Kerridge, 2011). We believe scientists conducting basic research will be reluctant to focus exclusively on adult stem cells or even induced pluripotent stem cells (iPSCs) given the unique advantages offered by hESCs. With respect to translational hESC research, the situation is more complicated. At this stage of research and development, profit-driven biotechnology and pharmaceutical companies are more actively involved. To the extent that the lack of patent protection following the Court ruling decreases the profit available (e.g., because patented inventions cannot be licensed and injunctions cannot be obtained to protect hESC patented inven-
tions), biotechnology and pharmaceutical companies may be less motivated to invest in European hESC research. That effect may be even more dramatic for startup companies. A strong patent portfolio traditionally has been a prerequisite for attracting venture capital in the life sciences field. As reported by a U.S Department of Commerce white paper, ‘‘In a large-scale survey conducted in 2008, 76% of startup managers reported that VC investors consider patents important to funding decisions.’’ (Rai et al., 2010.) On the other hand, we would not predict a complete dearth of European commercial investment in the hESC sector in the EU for several reasons. First, companies can still protect some of their work as traditional trade secrets. Second, as is often said of biologics, ‘‘The product is the process.’’ EU regulators will likely require that any company wishing to compete would have to incur the large expense of preclinical and clinical trials using their particular stem-cell-based therapy (Tam, 2010). Third, to varying degrees throughout Europe, the ‘‘Bolar Exemption’’ (European Union, 2004) limited patent protection for certain types of research at this phase even before the Court ruling. Finally, the effect of the
Cell Stem Cell 9, December 2, 2011 ª2011 Elsevier Inc. 499
Cell Stem Cell
Letters Court ruling on EU companies will vary depending on their specific circumstances. Companies that would have faced a freedom to operate problem because of hESC patents held by others may now be more likely to start, or continue, hESC research programs because the Court’s ruling renders such patents unenforceable. Companies working on the ‘‘improvement’’ of hESC related-technologies, for instance, which would have faced patent infringement litigation or would have had to pay royalties, may find themselves more incentivized to perform hESC research in the EU following the Court’s ruling. By contrast, companies holding foundational hESC inventions might be incentivized to work in jurisdictions that offer patent protection for hESC inventions (e.g., the USA). Despite the Court ruling we believe that sponsors of hESC-based therapies will locate trials in Europe for a number of reasons. Companies developing hESC therapies will ultimately desire to sell their products on the European market. The EMA may require data from European clinical trials before it approves of any future hESC-derived therapy. Moreover, recent studies suggest that over 50% of products headed for FDA approval are in clinical trials that involve foreign study sites (Levinson, 2010). Finally the possibility that some companies could be attracted to Europe
because of this decision cannot be discounted. Although the Court ruling does not directly impact the patentability of hESC inventions in the U.S., it will have a ripple effect there. American companies facing a freedom to operate problem because of U.S. patents held by others may now reconsider their business plans. Moving their research operations to Europe becomes a more attractive option because the EU counterparts of those patents are no longer enforceable. These companies will balance the benefit afforded by the new EU patent landscape against the protection that the Hatch Waxman Act provides for certain research activities in the U.S. and the significant costs of moving an already established and ongoing research operation. A cost differential that disfavors the U.S. as an alternative to the EU may incentivize companies to consider moving their trials and preclinical efforts to places such as India or China. As Yogi Berra once said, ‘‘It’s tough to make predictions, especially about the future.’’ Everyone will need to wait and see how various stakeholders in the research community actually respond to the Court’s ruling. Nevertheless, we are confident that the reaction will be dependent on many individual variables. As a result, we expect that some of the currently critical hESC research and development in the EU will continue to flourish.
REFERENCES Court of Justice of the European Union (2011). Oliver Bru¨stle v Greenpeace eV. Judgment of the Court (Grand Chamber) of 18 October 2011. Case C-34/10. http://eur-lex.europa.eu/LexUriServ/ LexUriServ.do?uri=CELEX:62010CJ0034:EN:HTML. European Union (2004). Directive 2004/27/EC of the European parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC of the Community Code relating to Medicinal Products for Human Use, Official Journal of the European Union, L 136/34. http://ec.europa.eu/health/files/ eudralex/vol-1/dir_2004_27/dir_2004_27_en.pdf. Fung, R.K., and Kerridge, I.H. (2011). Bioethics 2011, 4. Levinson, D.R. (2010). Challenges to FDA’s ability to monitor and inspect foreign clinical trials. Report of the Office of Inspector General, Department of Health and Human Services. June 2010, OEI-0108-00510. http://oig.hhs.gov/oei/reports/oei-0108-00510.pdf. Naik, G. (2011). Patent ruling sets back EU stemcell scientists. Wall Street Journal: Health Industry, October 19, 2011. http://online.wsj.com/article/ SB10001424052970204346104576639010759884 794.html. Rai, A., Graham, S., and Doms, M. (2010). Patent reform: unleashing innovation, promoting economic growth & producing high-paying jobs. A White Paper from the U.S. Department of Commerce, April 13, 2010. http://www.commerce.gov/sites/ default/files/documents/migrated/Patent_Reformpaper.pdf. Smith, K.P., Luong, M.X., and Stein, G.S. (2009). J. Cell. Physiol. 220, 21–29. Tam, J.W.Y. (2010). Georgetown Law J. 98, 535–536.
Bru¨stle Decision Is Unhelpful, but Not Catastrophic James Lawford Davies1,2,* and Alex Denoon2 1Institute
of Genetic Medicine, International Centre for Life, Newcastle University, Newcastle upon Tyne, NE1 3BZ, UK Davies Denoon, 14a Clerkenwell Green, London, EC1R 0DP, UK *Correspondence: [email protected] DOI 10.1016/j.stem.2011.11.007 2Lawford
On October 18, 2011, the Court of Justice of the European Union (CJEU) issued its much anticipated and controversial decision in the case of Bru¨stle v. Greenpeace (Court of Justice of the European Union, 2011). The Court ruled that inventions involving human embryonic stem cells
(hESCs) are unpatentable. While this decision is unhelpful for the field, its impact may be more limited and nuanced than others have suggested. In brief, the case related to a patent filed by Professor Oliver Bru¨stle in 1997 that described and claimed the isolation and
500 Cell Stem Cell 9, December 2, 2011 ª2011 Elsevier Inc.
purification of precursor cells generated from hESCs. Greenpeace argued in proceedings launched initially in Germany in 2004 that this patent breached Article 6(2)(c) of the EU Biotechnology Directive, which states that inventions involving the ‘‘use of human embryos for industrial or