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As scientists get closer to using embryonic stem cells in new treatments for blindness, spinal cord injuries and heart disease, a U.S. legal debate could determine who profits from that research.

Consumer Watchdog, a nonprofit advocacy group, wants an appeals court to invalidate a University of Wisconsin-Madison’s patent for stem cells derived from human embryos, saying it’s too similar to earlier research. The Santa Monica, California, group also says the U.S. Supreme Court’s June ruling limiting ownership rights of human genes should apply to stem cells, a potentially lucrative field for medical breakthroughs.

The challenge to Wisconsin Alumni Research Foundation, the university’s licensing arm, is about whether patents help or hinder U.S. stem-cell research, which has been stymied by political debate. The consumer group says it drives up the cost of research by requiring companies and some academics to pay a licensing fee to the university.

“What we’re asking the government to do is say WARF has no right” to the patent, said Dan Ravicher, executive director Public Patent Foundation in New York, which is handling the challenge...