The USPTO has rejected the patent claims by the Wisconsin Alumni Research Foundation (“WARF”) on three broad patents related to embryonic stem cells.

The Business Journal of Milwaukee reported:

The Foundation for Taxpayer and Consumer Rights, Santa Monica, Calif., and the Public Patent Foundation, of New York, challenged the WARF patents in July. The two groups said they brought the challenge because the three WARF patents were “impeding scientific progress and driving vital stem cell research overseas.”

The two groups challenging the patents argued that the work done by University of Wisconsin researcher James Thomson to isolate stem cell lines was obvious in the light of previous scientific research, making his work unpatentable. To receive a patent, something must be new, useful and non-obvious. The Patent and Trademark office agreed with the groups in a decision issued March 30, but received Monday.

The patents at issue are widely viewed as the most significant patents on stem cells.  The New York Times identified the patents as follows:

The patents in contention are 5,843,780, which covers primate embryonic stem cells and was issued in 1998; 6,200,806, which covers human and primate embryonic stem cells and was issued in 2001; and 7,029,913, which covers cultures of human or primate embryonic stem cells and was issued in 2006.

According to the Patent Baristas, the USPTO’s decision was based on two main prior art references:

(a) U.S. Pat. No. 5,166,065 (Williams et al.), which relates to the use of leukaemia inhibitory factor (LIF) in the maintenance and derivation of embryonic stem (ES) cells in culture. The ES cells are maintained and/or derived from animal embryos by culturing said cells or embryos in a culture medium containing an effective amount of LIF for a time and under conditions sufficient to maintain and/or derive said ES cells.

(b) U.S. Pat. No. 5,690,926 (Hogan), directed towards non-murine pluripotential cells that have the ability to be passaged in vitro for at least 20 passages and which differentiate in culture into a variety of tissues. The scope of the claimed cells includes any non-murine ES cells and particular claims are drawn to human pluripotential cells.

However, Patent Baristas go on to say the following:

I don’t think anyone should go out and throw a party just yet. The patent office grants over 90 percent of the requests for reexamination and many of those patents are issued with substantially the same claim(s) as before reexamination. WARF, a nonprofit group that acts as UW’s tech transfer office, will have a chance to prove the cells are novel. And, if the claims are ultimately rejected, it can still appeal or narrow the claims.  This could take years to resolve.

In their commentary on the decision, Patent Docs raised the following issue:

An interesting aspect of the inter partes re-examination concerns Dr. Loring’s declaration.  In her declaration, Dr. Loring opined not only on the prior art but on the legal conclusions regarding the art (i.e., that it rendered the claims obvious) as well as the “public injury” occasioned by the Thomson patents.  This declaration produced a patina of expertise for the requestors’ public statements regarding the basis for their re-examination requests.  In addition, it provided a public-interest rationale for the attempt to garner great economic benefit for at least some of the requestors by eliminating the royalties required by WARF for the type of commercial activity contemplated by California and others.  The Examiner handling the inter partes re-examination explicitly condemned this declaration as being improper in a re-examination, which is limited by statute to prior art publications.  Such an affidavit can be used to “explain the contents or pertinent dates” of a reference, but does not provide a basis for rejecting a claim during re-examination, according to the Examiner.  While undoubtedly true, the Loring affidavit no doubt raised the temperature of the considerations in the Patent Office concerning the original re-examination requests, and thus most likely served its intended purpose.

So, while this issue is getting sorted out, Geron Corporation, a Menlo Park biotechnology company which has an exclusive license on some of the stem cell technology, will continue to pay royalties.  As The Business Journal of Milwaukee noted:

If the patents are ultimately rejected in a final ruling, Geron would not have to pay for licensing the technology, but it would lose its exclusive rights to the stem cell technology.

For more ongoing coverage on this issue and its likely impact, check out the California Stem Cell Report, which is following the issue.