The Patentability of Human Embryonic Stem Cells: Is the Inconsistent Application of the European Union Biotechnology Directive's Moral Exclusion Clause Undermining Investor Confidence in Europe, Providing a Competitive Advantage to the United States?
The original justification for Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of Biotechnological Inventions (the Directive) was to promote the growth of the European life science sector by harmonizing and clarifying European biotechnology patent laws. As early as 1985, the European Commission had identified the fragmentation of European patent laws as a potential problem. The Directive thus aimed to address obstacles to the unity of the internal market, which would arise if national Member States adopted divergent and uncoordinated policies and legislation in a field of economic activity that had been earmarked as poised for spectacular growth. The Commission further identified the lack of guidance within the European Patent Convention 1973 (EPC) on how its provisions were to be applied to biotechnological inventions meant that researchers were unsure if their work could be legally protected within Europe. The Commissions concerns were lent greater political urgency by three significant events that combined to establish the dominance of the United States (U.S.) biotechnology industry. First, biology researchers in the U.S. were increasingly developing new techniques that had substantial commercial application. Second, the U.S. Congress created the Court of Appeals for the Federal Circuit to promote greater uniformity in the application of patent law and to reduce the possibility of forum shopping by parties seeking favorable courts. Thirdly, the landmark Supreme Court ruling in Diamond, Commissioner of Patents and Trademarks v Chakrabarty, took an important step towards patent liberalization by stating that living matter was not excluded as a ‘product of nature’ and that patents shall be available for ‘anything under the sun made by man’. It was not long after the Chakrabarty decision that the U.S. Patent and Trademark Office (USPTO) began issuing patents on gene fragments, transgenic bacteria, and cell lines expressing DNA sequences producing therapeutically useful proteins. A trend had been for European companies to move their biotechnology research from the European Union (EU) to the U.S. because they regarded the commercial and legal climate there as more encouraging. The Commission concluded that European biotechnology patent laws should be clarified and harmonized in order to provide the incentives and legal certainty required for the biotechnology industry to flourish. Given the nature of the objectives pursued, one might have expected that the drafting of the Directive would be a relatively straightforward administrative exercise in harmonizing the legal criteria of novelty, inventive step, and industrial application in the context of biotechnological inventions. Indeed, the first draft of the Directive framed the problem solely in these terms with the legal standards proposed largely reflecting the more permissive approach of the USPTO. The project soon ran into difficulties. The Directive differs in a key way from the approach of the U.S., as it establishes a prominent role for ‘morality’ as an evaluative criterion within European patent law. This unique stance emerged during extensive discussions between the Parliament, the Commission, and the Council, and was a political concession to the view expressed by the Parliament that the patenting of biological materials, in particular those of human origin, raises important ethical and social concerns. Attempts to address these anxieties resulted, inter alia, in the inclusion of a ‘morality clause’ in article 6 of the Directive. article 6(1) provides that inventions shall be considered unpatentable where their commercial exploitation would be contrary to ordre public or morality. article 6(2), intended to clarify how the general morality exclusion in article 6(1) should be applied, contains a list of specific examples of biotechnology inventions that are excluded from patentability on moral grounds. Ironically, it has been article 6(2) that has been the source of great uncertainties in the years since the Directive was enacted. In particular, questions regarding how article 6(2)(c), which excludes ‘uses of human embryos for industrial or commercial purposes’ from patentability, should be applied in relation to patent applications for inventions concerning human embryonic stem cells (hESCs) have given rise to long-running legal, ethical, and policy debates. The debate revolves around the fact that article 6(2)(c) is silent with regard to hESCs. This is because the first ever isolation of hESCs from an embryo was reported four months after the adoption of the Directive. Although the Directive was ‘addressed’ only to EU Member States, the European Patent Office (EPO), which is independent of the EU, voluntarily incorporated the Directive’s rules within the EPC. Thus moral exclusions are now a fixture of European patent law. Most patents in Europe are granted via the EPO; however, European patents must still be enforced in individual Member States who may interpret the Directive differently. Whereas the EPO has not granted any patents on hESC claims, an overview of EU Member States interpretation of article 6(2)(c) reveals a patchwork of permissive and restrictive regulatory policies towards the patentability of hESCs. In contrast to Europe, U.S. patent law contains no statutory basis for the USPTO or a court to deny patent protection to morally controversial biotech subject matter. The U.S. has adopted probably the most liberal patenting policies on stem cell research, with the USPTO granting in excess of forty-one patents that claim hESCs in their title and front pages. The purpose of this paper is to consider whether the inconsistent application of the EU Biotechnology Directive’s moral exclusion clause could undermine investor confidence in Europe, providing a competitive advantage to the U.S. Understanding the science is essential for engaging in knowledgeable debate about the ethical issues surrounding hESCs. Part II provides an analysis of the biology that underpins the human embryo setting out the crucial distinction between totipotent and pluripotent hESCs. In Part III our attention turns to pre Directive jurisprudence under article 53(a) EPC, where the EPO showed a willingness to interpret the moral exclusion clause in a narrow manner that afforded patent protection to controversial biotechnology inventions. It was against the EPC framework and the jurisprudence emerging from the EPO that the Commission conceived the need for European biotechnology patent laws to be clarified and harmonized. Part IV charts the troublesome enactment and transposition of the Biotechnology Directive that exposed inherent European conflicts regarding patent protection for biotechnological inventions concerning ‘living matter’ of human origin. In Part V our focus turns to the subsequent emergence of hESC technology, providing an analysis of the post Directive EPO decision in Edinburgh Patent which set a precedent for the recent decision in Wisconsin Alumni Research Foundation (WARF) where the EPO moved away from its pre Directive narrow approach embracing a broad interpretation of the moral exclusion clause setting out a restrictive policy on the patentability of hESCs. Part VI analyses the patentability of hESCs at the national level, comparing the relatively permissive United Kingdom (UK) and Swedish regulatory approaches to the more restrictive German regime, a comparison that raises interesting questions as to the legal certainty of biotechnology inventions claiming hESCs within Europe. In Part VII our attention turns to the patentability of hESCs in the U.S. This section of the paper begins with an analysis of the Constitutional basis of U.S. patent law prior to setting out the link between ‘utility’ and ‘morality’ in U.S. patent law. Part VII then considers the liberation of U.S. patent law, the application of the Thirteenth Amendment to biotechnological inventions, along with the rejection of the doctrine of moral utility before finally examining the recent full frontal attack on biotechnology patents in the U.S. and the reinstatement of federal funding for hESC research.
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Stephen R Donnelly, "The Patentability of Human Embryonic Stem Cells: Is the Inconsistent Application of the European Union Biotechnology Directive's Moral Exclusion Clause Undermining Investor Confidence in Europe, Providing a Competitive Advantage to the United States? " (2011) 20 Dal J Leg Stud 151.