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The future of stem cells faces a Myriad of obstacles
May 2014
by George Yu and Jason Harp  |  Email the author
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The prospect of embryonic stem cells as therapeutic agents in the treatment of numerous serious medical conditions has been diminished recently by questions regarding the patentability of stem cell-related discoveries. Last year in the Myriad decision, the Supreme Court ruled that genes could not be patented because they are products of nature and not the product of an inventor’s innovation. Arguments that stem cells—like genes—are products of nature and unpatentable, are wending their way through the federal courts with potentially significant repercussions for the stem cell industry.
 
The legal challenges coincide with advances in stem cell research. In 2001, President Bush issued an executive order limiting research to existing cell lines amid controversy over human embryo destruction. President Obama reversed that order in 2009. At the same time, the therapeutic potential of stem cells has helped fuel investment in companies working to develop stem cell therapies. These investments are beginning to generate results. For example, Advanced Cell Technology (ACT), a biotechnology company based in Marlborough, Mass., is running three Phase 1 clinical trials using embryonic stem cell therapies to treat two forms of macular degeneration that can result in blindness. It has also been reported that London Project to Cure Blindness and the RIKEN center for Developmental Biology in Kobe Japan are close to starting clinical trials with stem cell-type therapies for the treatment of macular degeneration. Others are expected to join the field.
 
It goes without saying that the ability to obtain patent protection on stem cell therapies is crucial for the companies working in this field to obtain the significant investment necessary to develop therapies. Years of research and development followed by lengthy and expensive clinical trials are necessary to bring these products to market. The incentives for investors to make large and somewhat risky investments in stem cell research will be diminished if patent protection is limited. The Supreme Court’s 2013 Myriad decision may decrease the ability to get stem cell patents and reduce investment in stem cell therapies.
 
Consumer Watchdog, a nonprofit advocacy group, has argued that a basic stem cell patent held by the Wisconsin Alumni Research Foundation (WARF), the University of Wisconsin’s licensing arm, is invalid because embryonic stem cells—like isolated human genes—are products of nature and should not be patentable subject matter. Consumer Watchdog argues that the patented stem cells are no different from the stem cells naturally occurring in an embryo, much like the patented genes at issue in Myriad were no different from genes found in human cells. In other words, the isolated stem cell is the same as the one that exists in a human embryo and is therefore nothing but a product of nature.
 
WARF counters that the cultured human embryonic cells covered by the patent are different from what is found in nature. The cultured stem cells have their own unique cellular composition and properties that are not found in naturally occurring stem cells. In addition, WARF argues that the cells cultures—unlike stem cells in an embryo—must be maintained in a culture medium containing nutrients and other components to survive.
 
Consumer Watchdog’s challenge to the WARF patent is driven by a belief that this patent is unnecessarily driving up the costs of research and development. WARF has collected hundreds of millions of dollars in royalties based on its stem cell patents. Royalties, according to Consumer Watchdog, that never should have been paid because the patent is invalid. If the challenge to WARF’s patent is successful and if the Myriad decision is expanded beyond isolated genes, there could be a chilling effect on the ability to obtain patents related to stem cell technology, potentially decreasing incentives for investors funding the development of stem cell therapies.
 
In any event, the underlying merits of Consumer Watchdog’s challenge are not likely to be resolved any time soon. The case has gotten bogged down in a procedural issue regarding whether Consumer Watchdog has any standing to challenge the validity of WARF’s patent, and this case may be resolved without answering the question of whether stem cells are patentable after the Myriad decision. However, it is likely similar arguments will be raised by other parties seeking to invalidate stem cell patents.
 
The determination of whether a particular stem cell patent is a product of nature or not, i.e., is it patentable subject matter, will likely turn on the specific invention. The WARF patent claims at issue in the Consumer Watchdog case cover in-vitro cultures of human stem cells. Consumer Watchdog has analogized these isolated stem cells to isolated genes. One can imagine other types of patent claims related to stem cell therapeutic products that are not so analogous to the human genes found to be unpatentable in Myriad. For example, claims covering the use of stem cells in methods of treating certain diseases are arguably distinct from claims covering the stem cells themselves. Similarly, claims covering a method of delivering stem cells into a patient in a therapeutic application may be more likely to be found patentable. These are just two examples. No doubt there are other stem cell-related claims that creative and motivated patent attorneys have drafted and will draft to protect stem cell inventions.
 
The Supreme Court in the Myriad decision recognized that there could be claims related to human DNA that were patentable. The specific claim at issue in Myriad covered an unaltered human gene, at least unaltered other than it had been isolated from the rest of the genome. The Supreme Court, however, treated cDNA differently. cDNA is a non-naturally occurring string of DNA in which the molecules in the non-coding regions of the string have been removed. The Supreme Court also explicitly stated that method claims such as an innovative method of manipulating genes are not covered by the Myriad decision. In addition, the opinion states that the Myriad case does not involve patents on new applications of knowledge about the genes at issue. Claims covering application of that knowledge would likely have been held patentable subject matter.
 
Indeed, the patentee in the Myriad case, Myriad Genetics, has recently been testing the scope of the Myriad decision. Myriad Genetics has sued its competitors asserting patent claims that cover methods of analyzing the genes that the Supreme Court ruled unpatentable. For example, one of the asserted patents covers methods of detecting alterations in the genes. Whether or not Myriad will be successful in its efforts to enforce these patents remains to be seen, but it will force the lower courts define the scope of the Myriad decision. The results will no doubt play a significant role in determining the type and scope of patent protection that may be afforded to innovations relating to stem cell therapies.
George Yu, counsel at Schiff Hardin, focuses his practice on intellectual property, with an emphasis on patent infringement and technology-related trade secret misappropriation. He can be reached at GYu@schiffhardin.com.
 
Jason Harp, counsel at Schiff Hardin, focuses his practice in technically complex patent litigation. He can be reached at JHarp@schiffhardin.com.

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