The instability, dynamics, and morphological transitions of patterns in thin liquid films on chemically heterogeneous striped surfaces are investigated based on 3D nonlinear simulations. The film breakup is suppressed on some potentially destabilizing nonwettable sites when their spacing is below a characteristic length scale of the instability, lambda(h). The thin film pattern replicates the substrate surface energy pattern closely only when (i) the periodicity of substrate pattern lies between lambda(h) and 2lambda(h), and (ii) the stripe width is within a range bounded by a lower critical length, below which no heterogeneous rupture occurs, and an upper transition length above which complex morphological features unlike the substrate pattern are formed.