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The U.S. Patent Office has disavowed the stem cell patents held by the University of Wisconsin and Geron Corporation (NASDAQ:GERN). The patent office ruled that the three patents covered cells that were either obvious or variations of earlier patented cells.

The patents covered work done by James A. Thomson of the University of Wisconsin, and it was supported by Geron, so the two entities owned the patents jointly. Thomson first isolated stem cells in 1998.

The Wisconsin Alumni Research Foundation, which holds the patents, has the right to re-present its claims with the hope of re-instating the patents. If it fails, it can appeal, but the burden of proof has now shifted back on them to prove their case. The entire process could take years.

Because of the importance of stem cells, WARF gave licenses to individual researchers without charge and sold them stem cells for a nominal $500. For companies wishing to do research, the charge varied from $75,000 to $400,000. Invitrogen (IVGN) said it moved its stem cell research off-shore to avoid the patents, which are valid only in America.

Geron holds exclusive rights to heart, nerve and pancreatic cells that are derived from human embryonic stem cells.

Disclosure: none.

Source: Geron's Stem Cell Patents Revoked