The European Patent Office's (EPO) enlarged board of appeal (EBoA) has ruled that the Wisconsin Alumni Research Foundation (Warf) could not be granted a patent for a method of obtaining embryonic stem cell cultures from primates, including humans.
Dr Paul Chapman, a partner in the Edinburgh office of patent firm Marks & Clerk, told The Scotsman that the EPO's ruling may open the market up to other small companies, which were previously worried about the cost of using Warf's method.
Stressing that the EPO's decision was expressly limited to the Warf case, Chapman said the latest ruling did not offer the clarity sought by stem cell companies over what could and could not be patented.
Chapman, a specialist in life science patents, said: "A lot of small companies and researchers in Scotland are looking at stem cells and there's a lot of money going into this area.
"The Warf method is the platform for this area. With this patent being refused, it does open the area up more for people."
But Chapman added that Scottish companies still needed to look at their methods and technologies to find out if their work could be patented.
He said that patenting could allow them to make money by granting licenses to other firms or give them a stronger bargaining chip if mergers and acquisitions happened within the stem cell sector.
He added: "Consolidation may still happen. It's a sector that has lots of little players – can they all realistically go ahead?
"Maybe, but I would think that strength in size may be appropriate."
In its ruling, the EPO said: "The EBoA decided that under the EPC it is not possible to grant a patent for an invention that necessarily involves the use and destruction of human embryos.
"The EBoA stressed, however, that its decision does not concern the general question of human stem cell patentability."
Dr Marilyn Robertson, executive director of the Scottish Stem Cell Network (SSCN), said the stem cell sector had been waiting a long time for this decision and it would have to be studied in detail.
"This is a very complex issue, but it is important to highlight that this is a fact-based ruling and applies to one particular aspect of the patent application," Robertson said.
"It is a decision that applies only in Europe, not in the UK or in the US. We will be studying the decision closely with legal advisers."
The SSCN assists and advises academics, clinicians and researchers who might not realise what patent opportunities may exist for their work.
The network – which is funded by Scottish Enterprise – has run workshops focussed on life science patent searching, in an effort to raise awareness of what can and cannot be patented.
"Patent awareness is critical if we are going to move forward with a healthy regenerative medicine industry in Scotland," Robertson added.