Stem Cell Research and Intellectual Property Rights
Dr Adrian Ely
Co-Investigator for ERC and ESRC Bionetworking in Asia
August 2013
Intellectual property rights in the life sciences
Intellectual property rights (IPRs) – generally – represent a way for those who have come up with a
new idea or invention to prevent others to use it. They thus provide an economic incentive to the
inventor (and potentially to investors in the associated research and development) by giving them a
(limited) monopoly on its exploitation. Intellectual property rights take various forms, including
copyright, trademarks, registered industrial designs, plant breeders’ rights and material transfer
agreements. Together with patents (see below), these are thought to stimulate research and
development (R&D) by ensuring that investors can recoup their costs during the period of monopoly.
In addition, it is argued that the incentive for innovation can – in the long term - enable patients and
consumers to access newer technologies that are able to serve their needs.
Patents are perhaps the best-known, most-widely-used and most controversial form of intellectual
property in the life sciences. Patents on new inventions (not discoveries or abstract ideas) must first
be ‘filed’ (applied for). After this, they are ‘examined’ and are then either approved or refused by a
national patent office. After approval, the holder of the patent is able to prevent any others from
exploiting (for economic purposes) their invention, or to demand license fees in order to them to do
so for a set period of time (usually twenty years). There are various requirements that patents
commonly need in order to be approved:
- Novelty/ no ‘prior art’ – this must be the first time that the ‘invention’ has been described
- Inventive step – the description must provide a non-obvious inventive addition to the
previously-recorded inventions in the same area
- Industrial application – the invention must have a utility i.e. be able to be exploited in a
certain economic context, or another useful way
- Clear and complete disclosure – this enables others to repeat the invention (assuming they
have the legal right to do so)
In the European Union, patents also have a morality requirement (patented inventions cannot
threaten legal and social foundations or ‘ordre public’) that is similar to clauses in some Asian (e.g.
Indian and Chinese) patent laws. This has implications for EU-US commerce and collaboration, and
creates problems when applied in regions that have different socio-political, legal and cultural
structures and norms.
Patent systems have primarily developed at national levels. These display differences in the ways in
which patents are examined and enforced (e.g. in European and Japanese law, researchers are
allowed to employ patented inventions for non-commercial use without obtaining licenses, but this
is not the case in the USA or Canada). Despite these differences, the international community has
tried to enable commercial activity around patents and IPRs for many decades. In 1994, member
countries of the World Trade Organisation (WTO) signed the ‘Agreement on Trade-Related Aspects
of Intellectual Property Rights (the TRIPS agreement) – probably the most important international
agreement in this area.
Areas of tension and policy debate
Like intellectual property rights (and especially patents) across the life sciences, IPRs around stem
cell technologies are currently an area of significant uncertainty/ debate/ dispute. Questions arise in
a number of areas:
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Does patenting incentivise innovation (as claimed by patent offices) or hold back innovation
(as suggested by scholars such as Heller and Eisenberg 1995)?
Are cell lines inventions or discoveries? If inventions, who are the inventors (researchers or
the subject from whom they were taken)?
Are patent laws and administrative systems able to keep up with the rapid advance of
innovation in the biosciences, including in stem cell technologies?
Do patents associated with stem cells violate morality or ‘order public’? Do they require a
new set of intellectual property law/ principles to overcome this issue?
The last of these questions was put to the test recently in Europe, when the European Court of
Justice was asked by the German Federal High Court to clarify questions relating to a patent held by
Professor Oliver Brüstle, a neuropathologist who had invented a way to produce (from embryonic
stem cells) specialised cells for use in neurological treatments. The patent (which had already been
granted by the German Patent Office) had been challenged by Greenpeace on the basis that it
involved the use of human embryos and thus went against European Patent Directive 98/44/EC.
According to Article 6 of the directive,
“1. Inventions shall be considered unpatentable where their commercial exploitation would be
contrary to ordre public or morality; however, exploitation shall not be deemed to be so contrary
merely because it is prohibited by law or regulation.
2. On the basis of paragraph 1, the following, in particular, shall be considered unpatentable:
(a) processes for cloning human beings;
(b) processes for modifying the germ line genetic identity of human beings;
(c) uses of human embryos for industrial or commercial purposes;
(d) processes for modifying the genetic identity of animals which are likely to cause them suffering
without any substantial medical benefit to man or animal, and also animals resulting from such
processes.”
In their response (which was advisory rather than a binding decision), the European Court of Justice
ruled that processes requiring the destruction of “human embryos” were not patentable, and
provided a broad definition of “human embryo” by suggesting that it referred to cells (either
resulting from a fertilised ovum, or those produced artificially) that were capable of commencing the
process of development into a human being. This decision has been seen as many to create a
barrier to the enforcement of many patents already granted to stem cell-related inventions. In the
case in point, the German Federal High Court in November 2011 exercised its discretion, arguing that
the in vitro pluripotent embryonic stem cells used in Brüstle’s invention were not capable of
developing into a human being. As a result they upheld – at least in part – the patent, on the basis
that it included a disclaimer excluding the destruction of human embyros. However, the European
Patent Office (EPO) in June 2013 revoked the corresponding patent at the European level.
Also recently, the UK High Court in April 2013 asked the European Court of Justice whether
parthenotes (embryos created through parthenogenesis) should be seen as “human embryos” under
the European Patent Directive. The UK Intellectual Property Office had previously refused two
patent applications from the International Stem Cell Corporation (ISSC) on the basis that they were
capable of commencing the process of development as specified in the Brüstle case (above). The
response of the European Court of Justice is awaited.
Obviously, each of the questions above can be subject to differing interpretations and views by legal
systems in national and regional contexts across the world. In addition to this, patent systems are
dynamic and legal decisions are subject to amendment or modification as new information becomes
available or technologies change.
What is the relevance of IPRs to the work of the Centre for Bionetworking
The Centre for Bionetworking’s projects on stem cell research and therapy in Asian countries are
part of our work investigating international, collaborative ways of undertaking R&D for life sciencesbased innovations. ‘Bionetworking’ makes use of global differences in science and technology,
healthcare, education and regulatory regimes. IPRs are relevant because – as explained below –
they are interpreted differently across the world, and they are at a different stage of development in
each of the countries in which we are researching, and because varying countries and regions of the
world are taking slightly divergent approaches to regulation in this area. Differences in (intellectual
property) regulation is one of the factors that contribute to and incentivise bionetworking amongst
firms and researchers. This leads to interesting research questions regarding different approaches
to IPR regulation in different countries, the IP behaviour of firms and individuals involved in
bionetworking, and the implications for any potential agreement on these issues at the international
level (primarily at the WTO).
The behaviour of firms and individuals will also change across the countries under study. When
patents or other forms of IPR described are not possible, inventors may instead use closely-guarded
trade secrets to prevent competitors from using their intellectual property. These can be used to
protect cell lines, ideas, formulas, production details or experimental procedures. When effective,
trade secrets avoid the risk that competitors can use the information included in the patent (which
requires full disclosure in order to be approved) or in the scientific literature. Inventors may decide
against patenting (and publication) if they do not trust certain national regulatory systems to
enforce their IPRs. At the same time, they may also use patents as a signal of their innovative
capabilities in order to attract investors.
IPRs are important across the countries in which we work as they can help to incentivise investment
in R&D and build scientific capabilities. As an example, the South Korean patent office granted 37
stem cell cosmetic patents between 2005 and 2011 (see Korea country report). Chakma et al (2013)
suggest that 10.4% of China’s and 17.7% of India’s private equity and venture capital investment
between 2000 and 2012 (totalling nearly $40,000 million) went to the life sciences, and that the
proportion of this going to stem cells was 6% in China and 3% in India. However, there are crucial
differences between the IP regulation in some of these countries. In other areas of biomedical
research, scholars have documented differences in the ethical norms across countries and in time
(see, for example, Sleeboom-Faulkner and Simpson 2013). Whilst patent laws in India (Section 3b)
and China (Article 5) both talk of morality, the form and interpretation of these may lead to patterns
of bionetworking, either now or in the future.
As mentioned above, there are significant asymmetries in the strength of enforcement of intellectual
property law in different jurisdictions. For example, different research exemptions like that
discussed above also exist in India, Japan and China (Paradise and Janson 2006). Those involved in
bionetworking can circumvent national-level regulation by conducting different kinds of research
and therapy in different parts of the world. Given the divergences in regulations, international firms
(or networks) can use these asymmetries to their advantage.
Of the countries which our current projects are researching Japan, Malaysia, India and the Republic
of Korea were WTO members at the initial signing in 1995, whilst China (2001) and Chinese Taipei
(2002) have become members since. All these countries should by now have implemented laws and
regulations in order to ensure TRIPS compliance (only least developed countries have been given
until 2021 to comply) and implementing them effectively, however there are ongoing debates
around whether or not this is indeed the case. Although it aims to provide a level playing field for
such interactions, the TRIPs agreement provides minimal guidance on such differences, with Article
27.2 reading “Members may exclude from patentability inventions, the prevention within their
territory of the commercial exploitation of which is necessary to protect ordre public 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.” There have so far been no WTO disputes associated with stem cell technologies that
reference this Article.
Implications for future research and policy
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Differences in the form, interpretation and implementation of intellectual property law
across European and Asian countries can create asymmetries that can be exploited by those
involved in bionetworking. The research from the Centre for Bionetworking can help us to
understand these better.
Seen from the perspective of patent-holders, there is potential for ‘free-riding’ if less
stringent regulatory systems allow IP-protected stem cell technologies to be infringed.
Innovators in those countries are thus allowed to benefit from the R&D investments of
others, who publish their findings or disclose their methods in the patent literature.
From the perspective of patients or populations with more urgent need, a less stringentlyenforced patent system may enable access to therapies that would (if patent laws were
uniformly enforced) remain inaccessible
Bionetworking exploits asymmetries in intellectual property regulation, however this raises
the threat of trade conflicts if political decision-makers view the distribution of benefits and
risks as severely skewed across jurisdictions.
At the international level, continued dialogue is required between nation states, intergovernmental organisations (e.g. OECD, WTO, WHO), and civil society, including
representatives of firms, researchers and the patient community.
References
Chakma, J., S. M. Sammut & A. Agrawal (2013) "Life sciences venture capital in emerging markets."
Nature Biotechnology 31(3): 195-209
Heller, M. A. & Eisenberg, R. S. (1998) “Can Patents Deter Innovation? The Anticommons in
Biomedical Research” Science 280, 698-701
Korea country report “(Source: A press release from the Korean Intellectual Property Office, 23 Sep.
2012)”
Paradise, J. and C. Janson (2006). "Decoding the Research Exemption." Nature Reviews Genetics 7:
148-154
Sleeboom-Faulkner, M. and B. Simpson (2013). "Experimental Ethics: Emergent themes and issues in
life sciences research in Asia" BioSocieties 8(1): 2-6
Further Reading
Nuffield Council on Bioethics (2013). Emerging biotechnologies: technology, choice and the public
good. London, Nuffield Council on Bioethics (especially chapter 9)
Parliamentary
Office
of
Science
and
Technology
http://www.parliament.uk/briefing-papers/POST-PN-401
(2011)
Biomedical
patents
WHO (2006). Report of the Commission on Intellectual Property Rights, Innovation and Public
Health. Geneva, World Health Organisation