The “Ordre Public” and “Morality” Clause in EU andJapanese Patent Law. The Case of Human Embryonic
Stem Cell Inventions (*)
Invited Researcher: Viola PRIFTI (**)
This research projects explores art. 32 of the Japanese Patent Act in a comparative
perspective with art. 53 (a) of the European Patent Convention as applied to patentability ofhuman stem cells. Whereas Japanese law exempts from patentability inventions that injure publicorder, morality, and human health, European law excludes from patentability inventions forreasons of “ordre public” and “morality”. The reason for investigating this topic stems from thenecessity to harmonize patent law in the controversial field of human embryonic stem cellinventions. While Japan is a world leader in stem cell research (the first patent on induced
pluripotent stem cells (iPS) was granted to Prof. Yamanaka of Kyoto University), thecompetitivity of its research institutions and business firms in the global market will also dependon the patentability of Japanese innovations. This requires legal certainty both in Japanese andforeign legislation. To this purpose, this research will clarify the types of human stem cellinventions that can be patented under Japanese and European law. Through an analysis of caselaw and interviews with relevant stakeholders, a test for complying with “ordre public” and“morality” will be elaborated and it will be argued that a common understanding of the conceptof “ordre public” and “morality” will bring benefit to the substantial harmonization of law in thefield of biotechnological inventions.

I. Introduction
The new era of regenerative medicine has increased the importance of research with humanembryonic stem cells (hESC). 1 Research with hESC has unprecedented potential for improvinghuman life through discovery of new drugs, treatment of incurable neurodegenerative diseases, drug
toxicity arrays, organ transplantation and through understanding of the origin of health problems.2
Human embryonic stem cells are unique and important for advancing regenerative medicine because,
unlike other types of stem cells, they can give rise to any type of cell in the body. This means thatthey have a broader application and can be used to study any kind of disease. Research with hESC,
however, encounters ethical limits because the generation of embryos implies the destruction of the(*) This is a summary of the report published under the 2017 Industrial Property Research Promotion Project entrusted by the JapanPatent Office.
(**) Over a period of approximately 3 month from September 25, 2017 through December 23, 2017, as an Invited Researcher for theFiscal Year 2017.
1 For an overview of recent developments see Lea Lowthorp and Katie Hasson, ‘What Just Happened? Looking Back at 2017’s Human
Germline Editing Developments’, Centre for Genetics and Society, available at https://www.geneticsandsociety.org/biopoliticaltimes/what-just-happened-looking-back-2017s-human-germline-editing-developments. Accessed 15 January 2018.
2 This has been affirmed by scientific researchers in the field both in Europe and Japan. See the bibliography section for the interviews
with scientists in Europe and Japan. For a comprehensive understanding of regenerative medicine see Anthony Atala (ed),Foundations of Regenerative Medicine. Clinical and Therapeutic Applications, Elsevier, Academic Press, 2009.

iblastocyst, a structure in early development that contains a cluster of cells from which the embryoarises.3 Some deem the destruction of the blastocyst equivalent to the destruction of an unborn child,
while others sustain that the blastocyst will never develop into a child unless implanted in the uterus
wall.4 The ethical dilemma on the legal status of the embryo5 has implications for the patentability ofhESC inventions. Research with hESC remains important even after the invention of induced
pluripotent stem cells (iPSC) from Prof. Yamanaka. Although iPSC circumvent the problem ofembryo destruction, hESC are still relevant for conducting similarity tests (to evaluate their similaritywith iPSC) and for studying diseases.6
Ethical concerns enter into patent law through the public policy clause. This clause, which excludes
some types of inventions from patentability, is found in art. 32 of the Japanese Patent Act (JPA) andin art. 53 (a) of the European Patent Convention (EPC). Whereas Japanese law exempts frompatentability inventions that “injure public ordre, morality, and human health”, the EPC disallows
patents for “ordre public” or “morality” reasons. The interpretation of these legal terms in different
jurisdictions may result in different types of permissible hESC inventions under patent laws. Thissituation does not only create legal uncertainty, but it may also hinder the competitivity of research
institutions and business firms that operate both in Europe and Japan.7 In order to shed light on theissue, this report will clarify the type of patentable hESC inventions under the Japanese and theEuropean law.

II. The link between patents and hESC research
Patents are necessary instruments to attract investments for developing biotech inventions and takebasic research to the marketplace. 8 Although it has been argued that other types of IP rights orregulatory mechanisms may play a more important role than patents in personalized medicine, 9patents remain a business tool for companies to capture their investment. This is especially important

3 Final Report of the Expert Group on the development and implications of patent law in the field of biotechnology and geneticengineering (E02973) of 17 May 2016, p. 133. The report is available on the European Commission’s website:
http://ec.europa.eu/DocsRoom/documents/18604/attachments/1/translations/. Accessed 8 January 2018.
4 Embryonic Stem Cell Research: an Ethical Dilemma, available at https://www.eurostemcell.org/embryonic-stem-cell-researchethical-dilemma. Accessed 8 January 2018.
5 Please, note that the blastocyst is a distinctive stage of the embryo. For a scientific definition of “blastocyst” see Encyclopaedia
Britannica, available at https://www.britannica.com/science/blastocyst. Accessed 8 January 2018.
6 This was confirmed during an interview with Friederike Helmholtz in December 2016 of Helmholz Centrum in Munich.
7 For an understanding of legal hurdles see Eric Furman, ‘The Dynamic State of Patents in Regenerative Medicine’ (2013) 10 (5) Tissue
Engineering and Regenerative Medicine, pp. 230-233.
8 Hadley, A. T. (1986). Economics. New York: G.P. Putnam’s Sons.
9 Dan L. Burk, ‘Patents as Data Aggregators in Personalized Medicine’ (2015) 21 Boston University Journal of Science and Technology
Law, pp.232-255; W. Nicholson Price II, ‘Big Data, Patents, and the Future of Medicine’ (2016) 37 Cardozo Law Review, pp.14011452.

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nowadays where the success of research projects remains uncertain10 but investments both from thepublic and the private sector are on the rise. Studies show that the global market for hESC researchwill reach 2 billion USD by 2020.11Since investments will incentivize more innovation in the field, a growth of patent filings, is to beexpected. Data obtained in the period 2004 – 2015 show that patent applications have alreadyincreased both in Europe and Japan.12 It is interesting to observe that although there have been morepatents filed with the EPO, less patents have been granted in Europe. On the contrary, the JPO has
received less patent filings but has granted more patents compared to the EPO. Another difference
between the JPO and the EPO can be noticed in the opposition of hESC patents on “ordre public”
and “morality” grounds. At present, there has been only one case decided by the JPO.13 The EPO, on
the other hand, has decided on 10 hESC patents opposed on “ordre public” and “morality” grounds.14
The application of the public policy clause for excluding hESC inventions from patentability may
reduce incentives to invest in some research projects or encourage smart legal drafting to overcome
legal hurdles. This situation may increase transaction costs15 and reduce legal certainty. Therefore, it
may appear reasonable to shed some light on the meaning of the “ordre public” and “morality” clausein patent law.

III. The concept of “ordre public” and “morality” in patent law for hESC
inventions in Europe
The legal texts that govern patents on biotechnological inventions in Europe are the European Patent
Convention (EPC) 16 and the Directive 98/44/EC on the legal protection of biotechnologicalinventions. Art. 53 (a) of the EPC prohibits patents on inventions, the commercial exploitation of

10 This is particularly true for biotech start-ups. For an understanding see Bruce Booth, The Successful Failure of a Biotech Start-Up,Forbes, 17 November 2017, available at https://www.forbes.com/sites/brucebooth/2017/11/17/painful-truth-successful-failure-of-abiotech-startup/#5527a7a1d025. Accessed 10 January 2018.
11 Global Industry Analysts, Inc., Human Embryonic Stem Cell Research: A Research Brief, February 2017, available at
http://www.strategyr.com/MCP-6831.asp#sthash.RqEW7WUG.dpbs. Accessed 31 January 2018.
12 As of 12 December 2017. The search terms used were 13 patent families “WORD = "hESC" AND (PUC = (JP))” for Japan and“WORD = "hESC" AND (PUC = (EP))” for EPO. I found 13 patents (of which, 7 were granted, 3 refused, 1 filed, and 2 underexamination) for Japan and 17 (8 withdrawn, 4 granted, and 5 under examination) for EPO.
13 Trial against Examiner's Decision of Refusal 2008-7386.
14 This is based on a search conducted on the EPO website on 11 December 2017.
15 Transaction costs include the costs of search, negotiation, and enforcement. For an understanding see Robert Cooter and Thomas Ulen,
Law and Economics, 6th edition, Berkley Law Scholarship Repository, p. 88, available at https://scholarship.law.berkeley.edu/cgi/view
content.cgi?referer=https://www.google.co.uk/&httpsredir=1&article=1001&context=books. Accessed 31 January 2018.
16 The Convention on the Grant of European Patents of 5 October 1973 as amended by the act revising Article 63 EPC of 17 December
1991 and by decisions of the Administrative Council of the European Patent Organisation of 21 December 1978, 13 December 1994,
20 October 1995, 5 December 1996, 10 December 1998 and 27 October 2005 and its Implementing Regulations as last amended by
the Administrative Council on 9 December 2004. The text of the convention is available on the EPO website:
http://www.epo.org/law-practice/legal-texts/epc.html. Accessed 31 January 2018.

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which would be contrary to "ordre public" or morality. R. 28 of the Implementing Regulations to theEPC further explains that under art. 53 (a), patents should not be granted on the following inventions:a) processes for cloning human beings;b) processes for modifying the germline genetic identity of human beings;c) uses of human embryos for industrial or commercial purposes;
Since R. 28 is a special provision compared to the general provision of art. 53 (a), this means thatpatentability decisions on hESC inventions should first be examined under this rule. If a decision cannot
be reached, the provisions on “ordre public” and “morality” should be assessed. The application of R.
28, however, requires an interpretation of terms such as “cloning”, “human being”, “germline geneticidentity”, “use of human embryos” and “industrial or commercial purposes”. The EPO boards of appeal
have decided on twenty-six cases on “ordre public” and “morality”, of which 10 concern humanembryonic stem cell inventions. 17 Based on the interpretation of scientific terms and case law,patentable hESC inventions in Europe concern iPSC inventions, use of hESC for therapeutic or
diagnostic purposes which is applied to the human embryo and is useful to it and hESC obtained througha process that does not destroy human embryos.

VI. The concept of “ordre public” and “morality” in patent law for hESC
inventions in Japan
Art. 32 of Japan Patent Law establishes that “Notwithstanding Article 29, any invention that is liableto injure public order, morality or public health shall not be patented.” The Japan Patent Office (JPO)
has decided on inventions involving human embryonic stem cells in the Trial against Examiner's
Decision of Refusal 2008-7386.18 This case concerns the establishment of human embryonic stem
cells by isolating the inner cell mass. The patent application was refused because the invention
included a step involving the destruction of human embryonic stem cells. The applicant argued thatthe human blastocyst was obtained from surplus embryos created for in vitro fertilization treatments,
which would have been discarded if not utilized in hESC research. The JPO clarified that humanembryonic stem cells obtained from in vitro fertilization (IVF) should be treated in the same way asother types of human embryonic stem cells because they have the potential to become a human being.

17 Theresults are based on a search performed in the Boards of Appeal database, http://www.epo.org/law-practice/case-lawappeals/advanced-search.html, last accessed 27 January 2018. The search terms were “52(a)” in the box “EPC article” for the period
1989-2018. Please, note that although the results page displays 36 cases, some concern cases published in different languages.
18 Japanese Patent Application No. 2003-523634 “Isolation of inner cell mass for establishment of human embryonic stem cell (hESC)
strain” Case of appeal against rejection appeal, WO 03/18783, Heisei 17 2005. The case is available at the following link:
http://tokkyo.shinketsu.jp/originaltext/pt/1218942.html, accessed 29 January 2018. An English translation is available here:
https://translate.google.com/translate?hl=ja&sl=ja&tl=en&u=http%3A%2F%2Ftokkyo.shinketsu.jp%2Foriginaltext%2Fpt%2F121
8942.html.

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To support the view that embryos obtained by IVF treatments give rise to a human being, the JPO
examiners

citedareporton“ReproductiveSupplementary

MedicinebyProviding

Sperm/Ovum/Embryo etc”19 and the 9th Annual Report published by the Human Fertilization andEmbryology Research Authority Bureau20. The JPO ruled that inventions involving a step where thehuman blastocyst is destroyed cannot be patented because they violate human dignity. Human dignity
was, in particular, deemed to be violated by the commercialization of embryos. In this case, the public
policy of human dignity prevailed over the interest to patent scientific inventions on humanembryonic stem cells. It is also interesting to observe that the JPO mentioned policy documents inorder to support its decision and show that laws are interconnected. For example, the “Guidelines on
the use of human ES cells”21 were cited to enhance the view that commercial use of hESC is not
permitted. At present, iPSC, hESC obtained through SCNT for regenerative medicine purposes, hESC
obtained through a process that does not destroy the embryo and CRISPR-Cas9 technology applied
to hESC (unless it aims at creating a human being) are patentable under Japanese law.

V. Towards a harmonized understanding of “ordre public” and “morality” forhESC inventions
The terms “ordre public” and “morality” enclose value judgments that may encumber the work ofpatent offices. Although many argue that it is the duty of the legislator to decide on morality issues,
patent offices are de facto entitled by patent law provisions to decide on the morality of inventions.
This may not be an easy task, especially if it involves judgments on human life, but as explained by
the EPO, patent offices are at the crossroads between science and public policy and are qualified tomake value judgments about a given technology.22 It is even more difficult to envisage a uniform
understanding of “ordre public” and “morality” across different jurisdictions because theinterpretation of these concepts varies among countries and even within the same country. The studyof the European and Japanese patent clause is an example of how similar legal provisions can beinterpreted differently and result in different patentable inventions. However, research on humanembryonic stem cells is a common interest for all countries because of its importance in personalized,precision, and regenerative medicine. If a related invention happens in one country, it will

19 The report is published by the Technical Committee on Reproductive Supplementary Medical Technology on 28 December 2000 by

the Health Science Council Advanced Medical Technology Evaluation Subcommittee and it is available at
http://www1.mhlw.go.jp/shingi/s0012/s1228-1_18.html. Accessed 29 January 2018.
20 See table 4.11 of the report, which lists 42 births by IVF treatments.
21 Notification no. 157 of the Ministry of Education, Culture, Sports, Science and Technology.
22 “The EPO being at the crossroads between science and public policy, was qualified to make value judgements about a giventechnology.” T 0356/93 (Plant cells) of 21.2.1995.

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undoubtedly be distributed in other countries. For this reason, it may be relevant to conceive common
standards for defining the concepts of “ordre public” and “morality” as a global interest.
At present, there are different understandings of “ordre public” and “morality” and regulations on
healthcare. One significant example can be found in the gene-editing trials on humans conducted byChinese doctors. Since 2015, Chinese doctors have conducted 11 trials on humans using CRISPRCas9, a gene-editing tool, to treat cancer.23 This puts European and US companies at a competitive
disadvantage with respect to CRISPR-Cas9 inventions, but at the same time it questions theboundaries of scientific experiments and the related regulations. Some relevant questions in thiscontext are: Will European and US patients be impeded from receiving effective cancer treatments
because regulations do not allow research with CRISPR-Cas9 on humans or patent law discourages
this type of research? Or should experiments in China be banned because they violate human dignity?
These questions may have different answers depending on the objectives pursued by public policy.
But if these controversial inventions reach the market, they will be patented. Biotechnologicalcompanies, especially start-ups, have an incentive to file patent applications because patents attract
investments. If countries adopt different concepts of “ordre public” and “morality”, there will be legal
uncertainty for international patent filings. Since patent law is strictly related to business interests andinternational markets,24 there may be an interest in the future to harmonize the public policy clauseon “ordre public” and “morality”.
Some guidance on a harmonized concept of “ordre public” and “morality” may be found ininternational instruments. For example, a WTO panel may offer clarity on the interpretation of “ordrepublic” and “morality” though this option may not appear feasible in the near future. It may seem more
realistic to propose that patent judges refer at studies of international organizations such as the WorldIntellectual Property Organization (WIPO),25 or soft law instruments such as the Universal Declarationon Human Rights, the UNESCO Universal Declaration on the Human Genome and Human Rights, andthe UNESCO Universal Declaration on Bioethics and Human Rights. These international legal
instruments set the limits for the evolution of science in line with a concept of ethics that helps humanityadvance. In specific, art. 11 of the UNESCO Universal Declaration on the Human Genome and Human
Rights prohibits reproductive cloning of human beings as a practice contrary to human dignity. Current
patent laws comply with this provision. Another option for an evaluation of “ordre public” and“morality” may be the examination of scientific guidelines developed by national science foundations

23 These figures are found in the following article China, Unhampered by Rules, Races Ahead in Gene-Editing Trials, the Washington

Post Journal, 24 January 2018, available at https://www.wsj.com/articles/china-unhampered-by-rules-races-ahead-in-gene-editingtrials-1516562360, accessed 24 January 2018.
24 Patent rights are territorial rights but international agreements on patent law (the TRIPS Agreement) and patent-related provisions
in foreign trade agreements clearly indicate the role of patents in market expansion.
25 See, for example, Shamnad Basheer et al., Patent Exclusions that Promote Public Health Objectives, SCP/15/3, available at
http://www.wipo.int/edocs/mdocs/scp/en/scp_15/scp_15_3-annex4.pdf. Accessed 33 January 2018.

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and guidelines on human embryonic stem cell research elaborated by public bodies. This route wasfollowed by the Japan Patent Office in Trial against Examiner's Decision of Refusal 2008-7386.
A suggestion for conducting a test of “ordre public” and “morality” may involve two steps. The firststep should reply to the following question: Is the patent rejection necessary to end the offence? If
there are alternative measures to stop the offence against “ordre public” and “morality”, a ban on
patentability will be of no use. If there are no alternatives to stop the offence, patent judges should
assess whether the commercial exploitation of the invention is against “ordre public” and “morality”.
The investigation of this question should first analyse laws, regulations and scientific guidelines ofnational public authorities, then consider the international soft law instruments, and finally examine
the purpose and use of human embryonic stem cells. If the purpose and use of human embryonic stem
cells promotes public policy objective for healthcare, the invention should be considered patentable.

VI. Conclusions
This report explored the meaning of “ordre public” and “morality” for hESC inventions in Europe
and Japan and suggested an interpretation that helps harmonize the understanding of this public policy
clause in patent law. The EPO and the JPO currently follow different policies for the patentability ofhESC inventions. This means that biotech companies have to be informed about different laws anddraft their claims based on the jurisdiction where they seek patent protection. The different
perceptions of “ordre public” and “morality” in different countries and cultures may also affect thedistribution of medicinal products and treatments. Since health is a global concern, it appeared
reasonable to refer to international soft law instruments for finding limits for the patentability ofhuman embryonic stem cells. These limits lie in the ban of human germline modification as a way ofprotecting human dignity. Both Japanese and European patent laws take this limit into consideration,
but Japanese law seems to be more flexible for accommodating scientific developments because it
allows the patentability of SCNT for regenerative medicine purposes and the application of CRISPRCas9 to human embryonic stem cells as long as the invention does not aim at creating a human being.
These inventions are currently prohibited under European patent law and as shown in the report,
European civil society has raised significant concerns on the patentability of life forms.
In spite of all these differences, there is a common interest in advancing inventions in the healthcare
sector. For this reason, the report recommended adopting a test for assessing “ordre public” and“morality” that promotes healthcare innovations and at the same time takes account of different public
policy objectives of countries. The challenge of the “ordre public” and “morality” tests lies inbalancing fears of modifying human germline for creating superhumans with the promotion ofhealthcare inventions.

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