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I was curious about this because, so far as I know, there are no grounds in US law for rejecting patents on ethical or moral bases. Certainly US defense contractors get patents on all kinds of horrific killing technologies and I believe there was at least one patent on the electric chair.
Unfortunately, the US media are not terribly informative on the background for this latest patent rejection. According to Kevin Grogan's story in PharmaTimes
the EPO already has a ban in place on the patenting of inventions “whose commercial exploitation would be contrary to public order or morality”, and specifically prohibits patents on uses of human embryos “for industrial or commercial purposes”.
Grogan also quotes David Earp, the chief counsel for Geron, a US-based pharma research firm, as claiming that the current decision is more narrowly drawn than the quote above would suggest, and expressing confidence that Geron's other human embryonic stem cell work can be protected in Europe.