At present making an innovation system based on life science is focused as one of the policy issues in Japan. Proper patent protection and its exploitation are considered factors required for making an innovation system successfully. Each country has guideline for patent examination to maximize promotion of, and minimize inhibition for, innovation. Such a guideline has a function to determine what innovation should be promoted by setting standard on statutory subject matter or ethical consideration. This article describes the issues surrounding relationship between intellectual property and ethical consideration by focusing on stem cell research and considers what we should pay attention to for our system construction. In Europe the inventions not eligible for patent subject matter owing to ethical consideration are stipulated in EU directive for biotechnological inventions and the European Patent Convention and the judicial interpretation of such stipulations were shown. In US, ethical consideration is focused on validity of research funding, outside of patent law. At present in Japan the interpretation of the Article 32 of the Patent Act, patents are not issued on the inventions liable to injure public order, morality or public health, is not clear. It is possible that even the inventions actually permitted to work are judged as against the stipulation of the Article 32. From now it is desirable that the range of ethical consideration against the Article 32 would be clear, by setting a guideline for patent examination not inhibitory to innovation in frontier fields including stem cells research.