2. Regulation of Stem Cell Research in Europe

Peter Gruss, then President of the Max Planck Society, commenced his 2003 ‘Human ES Cells in Europe’ Science Editorial as follows:

Since 2003, many European countries have adopted statutory provisions dealing directly or indirectly with human embryonic stem cell (hESC) research. Because regulating embryo and stem cell research in Europe has remained a matter of national jurisdiction, the essence of the comment made by Peter Gruss remains valid. Notwithstanding the fact that the ‘principle of respect for human dignity’ seems to be generally recognized as a fundamental ethical principle in stem cell research in Europe, the existing regulations neither define the term embryo in a uniform manner nor do they provide for harmonized rules as regards the generation and use of human pluripotent embryonic stem cells. Like Peter Gruss, Rosario M. Isasi and Bartha M. KnoppersReference Plomer and Torremans ¹⁶ subdivided the existing regulatory approaches in Europe, according to the applied policy design, into three categories. The first is countries with restrictive policies, such as Austria, Ireland and Italy, where embryo research, cryopreservation and destruction are prohibited. However, the approach of this group is not entirely consistent because, under certain conditions, for instance in Italy, embryonic stem cell research is allowed if the cell lines have been derived abroad and the research relies on private or regional agencies for funding. In addition, Germany – with its compromise approach, allowing research on stem cells that were derived before the cut-off-date and imported from abroad, and, in the country of origin, were generated in line with applicable law – can be added to this group. The largest group is formed by countries that have adopted what Isasi and Knoppers label as ‘intermediate policies’ which under strict conditions allow stem cell research on embryos spared from in-vitro fertilization treatment, but prohibit the creation of embryos for research purposes only. This group is composed of the Czech Republic, Denmark, Finland, France, Greece, Hungary, Latvia, the Netherlands, Norway, Portugal, Turkey and Ukraine. The liberal policies approach has been adopted in Belgium, Spain, Sweden and the United Kingdom. Provided the procedural rules and governance are strictly followed, in these countries the creation of embryos for research purposes as well as for the derivation of stem cell lines and for research cloning is permitted, but human reproductive cloning is banned. Without going into detail, it might be summarized that apart from countries such as Austria, Ireland and, possibly, Poland, then under strict procedural conditions, research in human embryonic stem cell lines, legally derived from supernumerary embryos from in-vitro fertilization, is allowed across Europe. Thus, again without any detailed analysis, it may be observed that European legislators, by allowing research on human embryonic stem cells under such conditions, clearly demonstrate a common (also ethical) consensus that this type of research is ethically acceptable and beneficial to society. Such basic ethical understanding was reflected in the guidelines that the EU adopted for its Sixth Framework Program in 2002. The then adopted compromise position did not allow the generation of new embryos solely for the purpose of producing new human ES cell lines but permitted scientists to produce new human ES cell lines from supernumerary embryos that were donated before a cut-off-date, were derived from in vitro fertilization, and were no longer required for implantation into the uterus.

3. Exploitation of Products from Human Embryonic Stem Cells

Although the EU legislator has not adopted any rules related to embryo or stem cell research, it adopted some legal instruments which cover commercial exploitation of products generated from human embryonic stem cells, which is allowed in the national laws of a number of EU Member States. With the Directive 2004/23/EC of the European Parliament and of the Council of 31 March 2004 on setting standards of quality and safety for the donation, procurement, testing, processing, preservation, storage and distribution of human tissues and cells (OJ EU 2004, No. L102/48), standards have been set which apply specifically also to ‘tissues and cells including haematopoietic peripheral blood, umbilical-cord (blood) and bone-marrow stem cells, reproductive cells (eggs, sperm), foetal tissues and cells, and adult and embryonic stem cells’ (Recitals 7). Moreover, Article 2 (1) of this Directive clarifies that it applies to donation, procurement, testing, processing, preservation, storage and distribution of human tissues and cells intended for human applications and of manufactured products derived from human tissues and cells intended for human applications. In other words, to products manufactured from human embryonic pluripotent stem cells. Further, Recital 7 of the Regulation (EC) No. 1394 (2007) of the European Parliament and the Council of 13 November 2007 on advanced therapy medical products and amending Directive 2001/83 (EC) and Regulation (EC) No. 726/2004 (OJ EU 2007 No. L324/121), points out that this Regulation of advanced therapy medicinal products at Community level should not interfere with decisions made by Member States on whether to allow the use of any specific type of human cells, such as embryonic stem cells, or animal cells. It should also not affect the application of national legislation prohibiting or restricting the sale, supply or use of medicinal products containing, consisting of, or derived from these cells. It follows from this that at the EU level, the commercial exploitation of, for instance, medicinal products generated from human embryonic stem cells derived from destructed supernumerary embryos from in vitro fertilization is, in principle, allowed. In fact, as shown for the stem cell lines offered by Merck Millipore, such products are already on the market in Europe.

4. Patenting

Prior to addressing the rules of the EU Biotech Directive which so far have been applied to assessing the patentability of inventions related to human embryonic stem cells, it should be first observed that patents are generally understood as an instrument of economic policy providing incentives for, and rewarding, a broad range of useful human activity. Despite this prevailing economic rationale, the routes of, the justification for, and some limitations of exploitation are reasoned ethically. Patent laws, like other laws, are subject to barriers inherent in the legal system, set by the Constitution, by public policy and by morals. These barriers exist in most countries, in legal orders of regional organizations of states, such as the European Union and international regional multinational treaties, such as the in 1973 adopted Convention on the Grant of European Patents (EPC). As an example, Article 53 (a) EPC excludes from patentability inventions, the commercial exploitation of which would be contrary to ordre public or morality. These two general clauses were understood to constitute the necessary gates of entry for overriding social and ethical considerations into the patent law system, which is otherwise neutral in its judgment and entirely devoted to the technological appreciations of inventionReference Beier and Straus ¹⁷ .

Second, Recital 14 of the Biotech Directive has to be recalled. It reads as follows:

Thus, it is essential to understand that a patent does not constitute a licence to use, and therefore a patented invention can only be commercially exploited in compliance with regulatory provisions and the rights of third parties. This, however, also implies that an invention, the exploitation of which is permitted under regulatory rules and which also does not run contra morals, but cannot be patented, can be freely commercially exploited by anyone at will.

Third, attention is drawn to Article 1 (2) and the Recitals 12 and 36 of the Biotech Directive. Whereas Article 1 (2) sets forth that the Directive shall be without prejudice to the obligations of the Member States pursuant to international agreements, and in particular the International Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement), the recitals clarify that under the TRIPS Agreement the European Community, and the Member States must offer patent protection for products and processes in all areas of technology (Recital 12) and may exclude:

Recital 36 of the Biotech Directive literally reproduces the provision of Article 27 (2) TRIPS Agreement. It is generally understood that the wording of Article 27 (2) TRIPS Agreement makes it clear that Member States of the World Trade Organization, i.e. also Member States of the EU and the EU itself, may invoke the exclusion of patentability on the grounds of ordre public or morality only under certain conditions, and among those, most importantly, the exclusion from patentability of a specific invention is only allowed if the commercial exploitation of that invention is prohibited in the territory of the respective Member. As Carlos Correa has observed, ‘the obvious purpose of this condition is to prevent a situation in which an invention is declared non-patentable but its commercialization is permitted.’Reference Correa ¹⁸ Further, the phrase ‘necessary to protect ordre public or morality’ requires that a causal connection exists between the measure taken (exclusion from patentability) and the effect sought (protection of ordre pubic or morality).Reference Pires de Carvalho ¹⁹ Consequently, the Biotech Directive itself as well as its application and interpretation must comply with Article 27 (2) TRIPS Agreement.

Whereas in the text of the Directive only Article 6 is directly addressing exclusions from patentability related to ordre public or morality, altogether ten recitals directly or indirectly refer to ordre public or morality as the yardstick for eligibility of inventions for patentability. Among other things, these recitals emphasize that the patent law must be applied so as to respect the fundamental principles safeguarding the dignity and integrity of the person and the human body, at any stage in its formation or development including germ cells, which cannot be patented. It is further emphasized that processes, the use of which offend against human dignity, such as processes to produce chimeras from germ cells or totipotent cells of humans and animals, were obviously also excluded from patentability. It should also be mentioned that in the recitals it is pointed out that ordre public and morality correspond in particular to ethical or moral principles recognized in a Member State, and such ethical or moral principles supplement the standard legal examinations under patent law regardless of the technical field of the invention. Recital 43 also specifically refers to Article F (2) of the Treaty on European Union, pursuant to which the European Union is to respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law.

Of direct interest for the question of whether inventions related to human embryonic pluripotent stem cells can be patented is, first, Article 5, which in its paragraph 1 sets forth that

However, this provision is complemented with the second paragraph of Article 5, which clarifies that

Whereas the exclusion from patentability of the ‘simple discovery’ of elements of the human body, including the gene sequences, addresses the delimitation between non-patentable discoveries, as such, and invention, the exclusion of the ‘human body at various stages of its formation and development’, is clearly aimed at guaranteeing human dignity and integrity ²⁰ .

Directly addressed are ordre public and morality in Article 6 (1) of the Biotech Directive, according to which 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. This provision according to the established case law of the European Court of Justice (ECJ), now Court of Justice of the European Union (CJEU), allows the administrative authorities and courts of the Member States a wide discretion in applying the exclusion from patentability of inventions, which is necessary to take account of the particular difficulties to which the use of certain patents may give rise in the social and cultural context of each Member State, a context which the national legislative, administrative and court authorities are better placed to understand than are the Community authorities. ²¹ However, as is explicitly pointed out in the second paragraph of Article 6, no such discretion exists for the Member States as regards the patentability of four specifically identified categories of inventions. ²² Article 6 (2) of the Directive reads as follows:

On the basis of paragraph 1, the following, in particular, shall be considered unpatentable:

1. (a) processes for cloning human beings;

2. (b) processes for modifying the germ line genetic identity of human beings;

3. (c) uses of human embryos for industrial or commercial purposes;

4. (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.

As yet, the Court of Justice of the European Union has had the opportunity in only two cases to assess the patentability of inventions related to human embryonic pluripotent stem cells based on the provisions of the Biotech Directive, more specifically on Article 6 (2) (c). In December 2009, the German Federal Supreme Court (BGH) referred to the CJEU a case in which the validity of a patent granted by the German Patent and Trademark Office in 1995 to Professor Oliver Brüstle for ‘isolated, purified precursor cells with neural or glial characteristics from embryonic stem cells’, which could be used in the treatment of Parkinson’s disease (Patent No. DE19756864), was at issue. The BGH specifically asked CJEU to answer the following questions: (1) What is meant by the term ‘human embryos’ in Article 6 (2)(c) [((a) Does it include all stages of the development of human life, beginning with the fertilization of the ovum, or must further requirements, such as the attainment of a certain stage of development, be satisfied? (b) Are the following organisms also included: unfertilized human ova into which a cell nucleus from a mature human cell has been transplanted, unfertilized human ova whose division and further development have been stimulated by parthenogenesis? (c) Are stem cells obtained from human embryos at the blastocyst stage also included?)]. (2) What is meant by the expression ‘uses of human embryos for industrial or commercial purposes’? Does it include also use for the purposes of scientific research? (3) Is a technical teaching to be considered unpatentable pursuant to Article 6 (2)(c) of the Directive even if the use of human embryos does not form part of the technical teaching claimed with the patent, but is a necessary precondition for the application of that teaching, either because the patent concerns a product whose production necessitates the prior destruction of human embryos, or because the patent concerns a process for which such a product is needed as base material?

In addition to these explicit questions, the BGH also drew attention to the fact that a prohibition of patentability, which also covers acts of exploitation, which according to the laws of some Member States were allowed, could be incompatible with Article 27 (2) of the TRIPS Agreement. It pointed out that an interpretation that would force Member States to deny patent protection despite the fact that the exploitation of the invention at hand, according to the national legal order, would not be contrary to ordre public or morality, may also contradict Article 1 (2) of the Biotech Directive.

In its judgment of 18 October 2011 the CJEU (Grand Chamber – Case C-34/10 – Oliver Brüstle v. Greenpeace eV. EU:C-2011:669) saw no necessity to interpret either the notion of ‘ordre public’ or that of ‘morality’ anew in a European context beyond its former case law. It justified its narrow approach by the fact that under Article 6 (2) Biotech Directive, by the decision of the legislator, the ‘use of human embryos for industrial or commercial purposes’ is by all means contrary to ordre public or morality. As regards the notion of ‘human embryo’, which the Biotech Directive does not define and for which no European consensus exists, the CJEU, contrary to the European Court of Human Rights (ECHR), ²³ found it necessary to, for the purposes of the application of the Directive, in this regard designate an autonomous concept of European Union law, which must be interpreted in a uniform manner throughout the territory of Union. The Court emphasized that ‘although, the definition of human embryo is a very sensitive social issue in many Member States, marked by their multiple traditions and value systems, the Court is not called upon, by the present order for reference, to broach questions of a medical or ethical nature, but must restrict itself to a legal interpretation of the relevant provisions of the Directive.’ It stated that a lack of a uniform definition of the concept of a human embryo would create a risk of the authors of certain biotechnological inventions being tempted to seek their patentability in the Member States that have the narrowest concept of human embryo and are accordingly the most liberal as regards possible patentability, because those inventions would not be patentable in the other Member States. Such a situation, according to the Court, would adversely affect the smooth functioning of the internal market, which is the aim of the Directive. Without examining the drafting history of the Directive, which suggests a different understanding of Article 6 (2)(c), the Court deduced from the recitals in connection with Article 5 (1) of the Directive that the context and aim of the Directive thus show that the European Union legislature intended to exclude any possibility of patentability where respect for human dignity could thereby be affected. Therefore, the concept of ‘human embryo’ within the meaning of Article 6 (2)(c) must be understood in a wide sense, namely as any human ovum, as soon as fertilized, if that fertilization is such as to commence the process of development of a human being. Moreover, the Court added that this classification must also apply to a non-fertilized human ovum into which the cell nucleus from a mature human cell has been transplanted and a non-fertilized human ovum whose division and further development have been stimulated by parthenogenesis. The Court reasoned that latter qualification by the capability of those cells ‘of commencing the process of development of a human being just as an embryo created by fertilization of an ovum can do so’.

As regards the second question, the Court simply held that the aim of scientific research must be distinguished from industrial or commercial purposes, the use of human embryos for the purposes of research which constitutes the subject-matter of a patent application cannot be separated from the patent itself and the rights attaching to it. Consequently, according to the holding of the Court, the exclusion from patentability concerning the use of human embryos for industrial or commercial purposes in Article 6 (2)(c) of the Directive also covers the use for purposes of scientific research.

Finally, the ECJ also declared an invention as unpatentable, even if the claims do not concern the use of human embryos, where the implementation of the invention requires the destruction of human embryos. In this context, the Court emphasized that also in such a case, there is the use of human embryos within the meaning of Article 6 (2)(c) and that the fact that destruction may occur at a stage long before the implementation of the invention, as in the case of the production of embryonic stem cells from a lineage of stem cells, the mere production of which implied the destruction of human embryos, was irrelevant. The Court reasoned this interpretation by stating that ‘not to include in the scope of the exclusion from patentability’ set out in Article 6 (2)(c) of the Directive technical teaching claimed, as the ground that it does not refer to the use, implying their prior destruction of human embryos would make the provision concerned redundant by allowing a patent applicant to avoid its application by skilful drafting of the claim ²⁴ .

Although the ECJ, under the heading ‘Agreements Binding the European Union and/or the Member States’, explicitly recited Article 27 (1) and (2) TRIPS Agreement in full, it did not make any comment to the question raised by the BGH as regards the possibility that its interpretation of the Directive would force Member States to deny patent protection in spite of the fact that the exploitation of the invention at hand according to the national legal order would not be contrary to morality or ordre public.

In April 2013 the High Court of Justice (England & Wales), Chancery Division (Patents Court) in the case International Stem Cell Corporation v. Comptroller General of Patents, Designs and Trademarks (Case C-364/13) referred the following question to the CJEU for preliminary ruling:

In its judgment of 18 December 2014, the CJEU (Grand Chamber), after it had repeated its holdings in the Brüstle case, emphasized that according to that judgment the classification of ‘human embryo’ must also apply to a non-fertilized human ovum into which the cell nucleus from a mature human cell has been transplanted and a non-fertilized human ovum whose division and further development have been stimulated by parthenogenesis. It recalled that it made it clear that although those organisms have not, strictly speaking, been the object of fertilization, due to the effect of the technique used to obtain them, they were, as was apparent from the written observations presented to the Court, capable of commencing the process of development of a human being just as an embryo created by fertilization of an ovum can do so. It then held that it follows from the Brüstle judgment that a non-fertilized human ovum must be classified as a ‘human embryo’ within the meaning of Article 6 (2)(c) of Directive 98/44, ‘in so far as that organism is “capable of commencing the process of development of a human being” ’. Therefore, where a non-fertilized human ovum does not fulfil that condition, the mere fact that the organism commences a process of development is not sufficient for it to be regarded as a ‘human embryo’, within the meaning and for the purposes of the application of Directive 98/44. Whereas in the judgment in the Brüstle case, it was apparent from the written observations presented to the Court that an unfertilized human ovum whose division and further development have been stimulated by parthenogenesis did have the capacity to develop into a human being, in the case at hand, the referring court stated in essence that, according to current scientific knowledge, a human parthenote, due to the effect of the technique used to obtain it, was not as such capable of commencing the process of development which leads to a human being. The CJEU, eventually, held that it is up to the referring court to determine whether or not, in the light of knowledge which is sufficiently tried and tested by international medical science, human parthenotes, such as those which are the subject of the applications for registration in the case in the main proceedings, have the inherent capacity of developing into a human being. If not, the referring court should infer from this that the parthenotes do not constitute ‘human embryos’, within the meaning of Article 6 (2)(c) of Directive 98/44.

5. Concluding Remarks

Prior to expressing some final thoughts on concern-causing inconsistencies, which the application of European statutory provisions brought to light by the CJEU, a brief view on the parallel situation of patenting human embryonic stem cells in the USA does not seem superfluous. Contrary to the approach adopted by the EU legislator, the US legislator has resisted all temptations to adopt in its patent law special provisions dealing with the patentability of biotechnological inventions. The US Patent Act (35 USC) also does not contain any provisions that would link the patentability of inventions with ordre public or morality. The US Supreme Court in its 1980 landmark Chakrabarty decision, in which it held ‘anything man made under the sun’ patentable, on the one hand acknowledged that the security concerns brought forward against the use of methods of genetic engineering and the products so obtained may be justified, but it refused to judge upon that because of lack of competence, which, according to the Court, stays with other political bodies. ²⁵ Not surprisingly, in the US the US Patent and Trademark Office issued patents for the pioneering inventions of James Thompson and for a number of other inventions related to human embryonic stem cells.Reference Whittaker ²⁶

As regards the inconsistency of the approach that results from the interpretation of the Biotech Directive by CJEU, the most annoying and critical aspect is to be seen in the discrepancy of understanding of ethics which under the EU laws and the laws of the EU Member States control research in human embryonic pluripotent stem cells and their commercial exploitation, on the one hand, and their patentability on the other. As shown, except in Austria, Ireland and, potentially, Poland, under certain procedural rules and governance at least research in human embryonic stem cells derived from supernumerary embryos from in vitro fertilization is allowed. Moreover, in a number of EU Member States, the commercial exploitation of products derived from such human embryonic stem cells is also permitted. In other words, neither the research in so derived human embryonic stem cells, nor the exploitation of its results offend ordre public or morality, i.e. respect to the necessary extent human dignity and integrity. However, under the case law of CJEU, inventions are unpatentable, even if the claims do not concern the use of human embryos, i.e. the use of human embryos does not form part of the technical teaching claimed and disclosed in the patent, as long as the implementation of the invention requires the destruction of human embryos. This, no matter how long before the implementation of the invention the destruction occurred. In practical terms, any invention that would be using available MEL1 and MEL2 stem cell lines offered by Merck Millipore in Europe commercially, and legally used in research that led to those inventions, cannot get a patent granted in Europe. The ethics, as well as the legal reasons behind this result seem entirely flawed and lack any logic. How can a system ethically and legally assess that supernumerary human embryos can be destructed and the harvested stem cells used for research purposes, further that the result of such research can be commercialized, be in compliance with human dignity and integrity, but label the patenting of those human embryonic stem cells as the ‘use of human embryos for industrial or commercial purposes’ which violates human dignity? The more so bearing in mind that a patent does not constitute a license to use. In this way, patents that should incentivize innovation in badly needed new cures for a number of as yet not curable diseases, and reward those who provide for the necessary solutions, are stigmatized as unethical and legalize free riding.

Finally, the fact that the CJEU decided in favour of an autonomous decision of what constitutes a ‘human embryo’ under the Biotech Directive, and made it, eventually, dependent on whether the source of stem cells at hand, i.e. irrespective of their origin from a destructed embryo, as in the case of parthenotes, ‘have the inherent capacity of developing into a human being’, implies an open-ended threat of a ‘flexible’ definition of human embryo ‘depending on current scientific knowledge’ and valid only for patenting purposes, i.e. resulting in unpatentable but possibly commercially exploitable products. Such an interpretation has no basis in the wording of the Biotech Directive and even less so in the legislative history that led to its adoption. Moreover, it contradicts the principles enshrined in Article 27 (2) TRIPS Agreement, which, under Article 1(2) of the Biotech Directive are binding for the European Union and its Member States. The only way to resolve the anomaly that emerged from the CJEU case law is to be seen in a return to the understanding that the Biotech Directive concerns only the grant of patents and that its scope therefore does not extend to activities before and after that grant, whether they involve research or the use of the patented products. ²⁷ As a consequence, an invention should only be unpatentable if the claimed and disclosed teaching involves the use of human embryos, as defined by CJEU, for industrial or commercial purposes. Because, to the understanding of CJEU, human pluripotent embryonic stem cells do not fall under the CJEUs autonomous definition of a human embryo under the Biotech Directive, inventions in which they are claimed and which can be performed independently from human embryos cannot fall under Article 6 (2) (c) of the Directive. In order to bring in line ethical considerations controlling patenting with those controlling research in and commercialization of human embryonic pluripotent stem cells derived from destroyed supernumerary human embryos, it is necessary to narrow the notion of an invention to its genuine understanding, i.e. separate it from whatever preceded and whatever follows the invention and is controlled by rules that are in compliance with competent regulations in force and prevailing principles of ethics and morals. Only such an approach can prevent that human pluripotent embryonic stem cells are in the end equated to an embryo whose definition as it stands will develop further depending on the progress of scientific knowledge. By doing so, the existent inconsistency would be removed, the system brought in line with the requirements of Article 27 (2) TRIPS Agreement. Articles 5 (1) and (2) of the Directive, so far ignored at present, would regain their genuine purpose, and the genuine function of the patent system to foster innovation and reward inventors instead of providing conditions for free riding would be restored.