The future of the biotech industry in Europe has been cast into doubt after the European Court of Justice banned patents on stem cell work involving the destruction of human embryos.

In a ruling that many have called “devastating”, the court concluded that patents are not applicable to “a process that involves removal of a stem cell from a human embryo at the blastocyst stage, entailing the destruction of that embryo”.

However, the ruling does permit patents on processes that use human embryos “for therapeutic or diagnostic purposes that are applied to the human embryo and are useful to it”.

Despite the distinction, scientists and commentators fear there will now be no commercial incentive for stem cell research in Europe, which is likely to move to Asia or the USA where the environment will be more favourable. 

The Court’s decision follows a German court case where a patent for the creation of nerve cells generated from human embryonic stem cells was found invalid and the ruling appealed by the scientist Oliver Bruestle. In the original challenge, Greenpeace in Germany claimed Bruestle’s patent contravened an EU directive banning patents on inventions that violated public order or morality. The court ruled in favour of Greenpeace. Bruestle appealed and the German court was forced to seek guidance from the European Court of Justice, which upheld the German decision.

In an interview following the news, Bruestle called the ruling “an unbelievable setback for biomedical research in the area of stem cells” and expected “huge repercussions globally”. This decision “means that fundamental research can take place in Europe but developments that follow from that cannot be implemented in Europe”, he said. Specifically, early stage research will occur in Europe but when it comes to biotech or pharma companies looking to invest in further research, they are likely to take it out of Europe.

Already research using patented methods was underway in Europe and Bruestle feared the legality of these could now be called into question following the ruling. Meanwhile, a Pfizer/University College of London human trial that uses embryonic stem cells to treat age-related macular degeneration, which was expected to start in the UK next year, could be affected by the ruling.

Sarah Turner, of Counsel at Hogan Lovells, agreed with the concerns raised by the ruling. “Unless effective, alternative sources of cells can be found for stem cell research this ruling will have an enormous effect on the fledgling stem-cell industry. If patent protection cannot be obtained, investment in this area is likely to decrease. Investors look to the rights granted by patents as a means to recover the huge costs of research in this area and support on-going and future research. Without proper protection the incentives to innovate are eroded.”

The European ruling follows a US court decision in March last year, which found that Myriad Genetics’ patents on the breast cancer genes BRCA1 and BRCA2 were invalid. Concerns were raised as to what effect, if any, this would have on the biotech industry.