Trounson predicts ripple effects from European court ruling on human embryonic stem cells

In October the European Court of Justice issued a ruling that inventions created from human embryonic stem cells are not patentable. We wrote a few blogs at the time giving voice to different perspectives on what that ruling might mean. (Those blogs are here and here.)

This month, CIRM President Alan Trounson weighed in on the possible repercussions of the decision in the journal Cell Stem Cell (The abstract is available here, full access requires a subscription). Trounson’s letter is one of several opinions on the case that appear in this issue. Writing with Nancy Koch, CIRM legal Counsel, and Elona Baum, General Counsel and VP of business development, Trounson said:

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.

The group wrote that they don’t expect the ruling to have a significant impact on basic research involving human embryonic stem cells. However, they suggest that the situation is more complicated for the type of research that translates basic human embryonic stem cell research discoveries into therapies. They write:

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 inventions), 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.

However, they don’t predict a dearth of European commercial investment in embryonic stem cell research and technology. That’s because even though companies can’t patent discoveries, they may still be able to protect their work as traditional trade secrets. Moreover, the European regulatory authorities may require data from trials conducted in the EU before approving certain future stem cell-derived products

They also suggest that the ruling could lead to relocations both from the EU to the U.S. and the reverse. European companies whose business model relied on embryonic stem cell patents might relocate to the U.S. where those patents still hold. Companies in the U.S. who are slowed by patents held by others might relocate to the EU where those patents aren’t enforceable.

How these different factors play out remains to be seen, but the group does end on a hopeful note. They conclude by saying that they expect at least some of the critical human embryonic stem cell research taking place in the EU to flourish.

A.A.