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Just as human embryonic stem cell research has generated controversy about the uses of human embryos for research and therapeutic applications, human embryonic stem cell patents raise fundamental ethical issues. The United States Patent and Trademark Office has granted foundational patents, including a composition of matter (or product) patent to the Wisconsin Alumni Research Foundation (WARF), the University of Wisconsin-Madison’s intellectual property office. In contrast, the European Patent Office rejected the same WARF patent application for ethical reasons. This article assesses the appropriateness of these patents placing the discussion in the context of the deontological and consequentialist ethical issues related to human embryonic stem cell patenting. It advocates for a patent system that explicitly takes ethical factors into account and explores options for new types of intellectual property arrangements consistent with ethical concerns.