Sasi K.G.
01. INTRODUCTION
The
judgment rendered by the Supreme Court in the case of Novartis AG (“Novartis”)
v. Union of India is one of the landmark judgments of the Supreme Court.
The decision made access to medicines at a low cost, thus preventing the
pharmaceutical industries from “evergreening” their patents.
On 1 April 2013 the Indian Supreme Court
bench of Aftab Alam J. and Ranjana Prakash Desai J. delivered the
judgment in Novartis AG v Union of India (hereafter the Novartis case) in an appeal
that had been brought to it by Novartis, a Swiss-based pharmaceutical company
against rejection by the Indian Patent Office of a product patent application
for a specific compound, the beta crystalline form of Imatinib Mesylate. Supreme
Court ruled that the beta crystalline form of Imatinib Mesylate failed both the
tests of invention and patentability.
02. PATENT LAWS IN INDIA
The
patent laws in India has a long history of evolution.
01. History of Patent Legislations in India
The
first legislation in India relating to patents was the Act VI of 1856. The
objective of this legislation was to encourage inventions of new and useful
manufactures and to induce inventors to disclose the secret of their
inventions. Act IX of 1857 subsequently repealed the Act since it had been
enacted without the approval of the sovereign. Fresh legislation for granting
‘exclusive privileges’ was introduced in 1859 as Act XV of 1859. The Act
modified as Act XV; Patent Monopolies called exclusive privileges (making,
selling and using inventions in India and authorizing others to do so for 14
years from date of filing specification.) The Act excluded importers from the
definition of inventor.
The
Act of 1859 provided protection for invention only and not for designs whereas;
United Kingdom had been protecting designs from 1842 onwards. To remove this
lacuna, the ‘Patterns and Designs Protection Act’ (Act XIII) was passed in
1872. This Act amended the 1859 Act to include any new and original pattern or
design or the application of such pattern to any substance or article of
manufacture within the meaning of ‘new manufacture’.
The
Act XV of 1859 was amended in 1883 by XVI of 1883 The Protection of Inventions
Act was introduced with a provision to protect novelty of the invention, which
prior to making application for their protection was disclosed in the
Exhibitions of India. A grace period of 6 months was provided for filing such
applications after the date of the opening of such Exhibition.
In
1888, a new legislation named The Inventions & Designs Act was introduced
to consolidate and amend the law relating to invention and designs in
conformity with the UK amendments.
The
Indian Patents and Designs Act 1911, (Act II of 1911) was brought in replacing
all the previous legislations on patents and designs. This Act brought patent
administration under the management of Controller of Patents for the first
time. This Act was amended in 1920 providing for entering into reciprocal
arrangements with UK and other countries for securing priority. In 1930,
further amendments were made incorporating provisions relating to grant of secret
patents, patent of addition, use of invention by Government, powers of the
Controller to rectify register of patent and increase of term of the patent
from 14 years to 16 years. In 1945, another amendment was made to provide for
filing of provisional specification and submission of complete specification
within nine months.
After
Independence, the need to enact comprehensive patent law owing to substantial
changes in political and economic conditions in the country was greatly felt.
Government of India constituted a committee under the Chairmanship of Justice
(Dr.) Bakshi Tek Chand, a retired Judge of Lahore High Court, in 1949, to
review the patent law in India in order to ensure that the patent system is
conducive to the national interest. The Committee submitted its interim report
on 4th August, 1949 with recommendations for prevention of misuse or abuse of
patent right in India and for amendments to sections 22, 23 & 23A of the
Patents & Designs Act, 1911 on the lines of the United Kingdom Acts of 1919
and 1949. Based on the recommendation of the Committee, the 1911 Act was
amended in 1950 (Act XXXII of 1950) in relation to working of inventions and
compulsory licence/revocation.
In
1952, an amendment was made to provide compulsory licence in relation to
patents in respect of food and medicines, insecticide, germicide or fungicide
and a process for producing substance or any invention relating to surgical or
curative devices, through Act LXX of 1952. The compulsory licence was also
available on notification by the Central Government. Based on the
recommendations of the Committee, Bill No.59 of 1953 was introduced in the
Parliament. The bill lapsed on dissolution of the Lok Sabha. In 1957, the
Government of India appointed Justice N. Rajagopala Ayyangar Committee to
examine the question of revision of the Patent Law and advise government
accordingly. The report of the Committee, comprising two parts, was submitted
in September 1959. The first part dealt with general aspects of the patent law
and with evils of the patent system and solution with recommendations in regard
to the law. The second part contained detailed notes on the several clauses of
the lapsed bill of 1953. This report recommended major changes in the patent law,
which formed the basis of the introduction of the Patents Bill, 1965. This bill
was introduced in the Lok Sabha on 21st September 1965, but lapsed.
In
1967, an amended bill was introduced and it was referred to a Joint
Parliamentary Committee and on the final recommendation of the Committee, the
Patents Act, 1970 (Act 39 of 1970) was passed, repealing and replacing the
1911. But the 1911 Act continued to be applicable to designs. Most of the
provisions of the 1970 Act were brought into force on 20th April
1972 with the publication of the Patents Rules, 1972. Patent Act of 1972 was amended thrice, in 1999
which came into force from 1st January 1995, in 2002 which came into
force from 20th May 2003 and in 2005 which came in to force from 1st
January 2005.
Under the provisions of section 159
of the Patents Act, 1970 the Central Government is empowered to make rules for
implementing the Act and regulating patent administration. Accordingly, the
Patents Rules, 1972 were notified and brought into force w.e.f. 20.4.1972.
These Rules were amended from time to time till 20 May 2003 when new Patents
Rules, 2003 were brought into force by replacing the 1972 rules. These rules
were further amended by the Patents (Amendment) Rules, 2005 and the Patents
(Amendment) Rules, 2006. 2006 amendments are made effective from 5th
May 2006. Indian Patent Rules were amended in 2012, 2013, 2014 & 2016. The
2006 amendment of rules introduced reduced time lines and a fee structure based
on specification size and number of claims, in addition to a basic fee. Indian
Patent amendment rules 2012 was for amendments in criteria for patent agent
exam qualification. Gazette Notification of Patent (Amendments) Rules 2013 has
made necessary provisions for recognizing Patent office as Examining authority
and Searching authority on international level for filing, searching and
examination of patent along with necessary fees. Patent amendment rules 2014 introduced
a third category of applicant for small entities and revised the basic fee for
filing a patent application. 2016 Rules provided for withdrawal benefits,
Startup Bonanza and Tatkal Patents.
02. 2005 Amendment of Patent Act
The
Government of India brought out the Patents (Amendment) Ordinance, 2004 to take
care of issues relating to patent in the country which was replaced by the
Indian Patent (Amendment) Act, 2005 to fulfill the obligation of India for introducing
patent protection in new technologies, chemicals and pharmaceuticals under the
TRIPS agreement of the WTO with effect from 1.1.2005. The new Act introduced
some important changes on patent issues in technology, chemicals and
pharmaceuticals sectors.
01. Salient Features of the Patent (Amendment) Act, 2005
·
In
the definition of what are not inventions, the amendment provides “Mere new use
or a known substance” is not an invention. In other words if the applicant can
substantiate that it is new use for a known substance with some technical input
such new use can be patented.
·
A
computer program per se is not patentable but its “technical application
to industry or a combination with hardware” is patentable.
·
The
provision prohibiting product patent for food, medicine, drug and chemical processes
has been removed. In India with effect from 1st January 2005 product
patent is available for medicine, drug, chemical processes and food. Thus product
patent regime in respect of drug, medicine, food and chemical processes is
implemented in India by the new Act.
·
If
a patent application is accompanied by a provisional specification, the
complete specification should be filed within 12 months of filing of the
application. Otherwise the application shall be deemed to be abandoned.
·
A
patent application shall be examined only on a request in prescribed manner.
Without a request the patent applications would not be examined as a matter of
routine, as it was prior to the year 2003.
·
Provisions
relating to Exclusive Marketing Rights (EMR) have been removed. EMR provision
was introduced in India in the year 1999 in compliance with TRIPS as product
patent for drug and medicine was not available in the Indian Act. As product
patents can now be granted for Drugs, medicines, food, and chemical processes
the EMR provision has become redundant and has been repealed.
·
When
a patent has been published but has not been granted, any person can make a
representation to the Controller of Patents requesting him to refuse the
application on the ground of lack of novelty, inventive steps, and industrial
applicability. The Controller shall consider such representation and dispose it
off. The person making the representation is not a party to the proceeding.
After the grant of a patent but before the expiry of the period of one year
from the date of publication of grant of a patent, any person interested may
give notice of opposition to the Controller.
·
Only
after grant of patent the application, specification and documents related
thereto are opened for public inspection.
·
The
Act provides for compulsory license for manufacture and export of patented
pharmaceutical products to any country having insufficient or no manufacturing
capacity in the pharmaceutical sector for the concerned product to address
public health problems provided compulsory license has been granted by such
country. To avail of this provision, the applicant should satisfy two
conditions:
1.
The
country to which export has to be made has insufficient or no facility to
manufacture.
2.
The
recipient country should grant compulsory license for import and sale of the
drug
·
The
Act also provides for appeal from the order of decision of the Controller to
Intellectual Property Appellate Board (IPAB). The power of revocation is also
conferred with IPAB.
03. Patent Law in Pharmaceutical Business
In the present case, the attempt to
register a patent in India for a drug that was already state of the art and
therefore not really worthy of registration as a patent was found futile. Only three countries in Africa namely
Malawi, Namibia and Zambia, have provisions in their legislation specifically
prohibiting the patenting of new uses of existing substances in the
pharmaceutical context. Most of the countries provide for new use patents in
their laws.
There was an initial reluctance to
allow patents on pharmaceutical products in many countries. The French Patent Act of July
5, 1844 on patents, for example, excluded from protection pharmaceutical
compositions or medicines of all kinds. The Act banned patents on
pharmaceutical products and their pharmaceutical composition but not the
process of fabrication of a pharmaceutical substance. The ban remained until
1959, when an ordinance was passed providing that patents would be granted for
pharmaceutical products, with a possibility of issuing compulsory licences in
the case of insufficient quantities and abnormally high prices.
The
Indian Government has adopted a strategy to ensure that its global commitments
do not undercut domestic priorities in the pharmaceutical system. It is seeking
to interpret its obligations under TRIPS in a manner that permits the
production of generic medicines and keeps medicine prices as low as possible to
facilitate access to essential medicines. In turn, this is presenting serious
market challenges for the research-based pharmaceutical industry.
04. India and the TRIPS agreement
For
over 30 years, the Indian government did not allow product patents for
pharmaceutical inventions, paving the way for Indian generics companies to
“freely produce medicines created by foreign drug companies at a fraction of
the cost.” But, Process patents were recognized as they were seen as an
incentive for domestic manufacturers to develop “cheaper methods of making
expensive patented products”, and a way for the Indian government to keep drug
prices low. In 1995, India became a member of the World Trade Organization
(WTO), and was compelled to revise its patent laws following a ten-year
transition period. India’s adjusted laws had to comply with the Trade-Related
Aspects of Intellectual Property Rights (TRIPS) Agreement, i.e. the “WTO’s
minimum standards for intellectual property protection.” The “implementation of
substantially enhanced patent protection for pharmaceuticals” in India, in that
drug products were thus able to become patentable since 2005.
India
has had a mixed approach towards the implementation of the TRIPS Agreement,
availing itself to the full transition period for product patent protection,
and delaying other commitment such as to set up a mechanism (known as the
“mailbox” provision) that allows inventions to be notified to the patent
officials, so that the invention can be established as “new”. It also stalled
on a second required measure that involved exclusive marketing rights – that is
if a state allows the new drug to be marketed, the firm that invented the
pharmaceutical has the right to exclusively market the drug for a period of
time. This strategy of delay suggests strongly that India, while committing to
the spirit of the TRIPS Agreement, has also sought to ensure that its
interpretation and implementation is in line with domestic preferences. Provisions
in India’s domestic law that ban ‘evergreening’ (a process in which minor
reformulations to a preexisting drug can be used to extend patents, a common
practice among pharmaceutical companies in developed countries); and the
criteria for ‘compulsory licensing’ were the results of obligations to TRIPS
Agreement. The repeated Patents Act Amendments of 1999, 2002
and 2005 were for the compliance of TRIPS
Agreement.
01. Role of TRIPS
TRIPS became effective on January
1, 1995 by agreement of WTO member states, who then became obligated to
implement domestic laws to comply with the TRIPS minimum requirements. Developing
countries were initially given up to five years (i.e. until January 1, 2000) to
implement domestic laws in accordance with TRIPS. Member states were received
an additional five years (for a total of ten years, or until January 1, 2005)
to bring their domestic laws into complete compliance with respect to product
patents in the new area of technology. Both of these five-year provisions
applied to India in the area of pharmaceuticals, as it was a developing country
and also a country whose laws had no provisions for protection of patents of
drug and pharmaceutical products. The TRIPS Agreement forced developing
countries to adopt product patents on medicines.
03. PREVIOUS LITIGATIONS BY NOVARTIS
Novartis had initiated Patent Disputes
in India before this Appeal case.
01. Novartis & Anr. v. Adarsh Pharma & Anr., 2004 (29) PTC 108 (Mad.)
In
this case, the issue of Exclusive Marketing Rights (Section 3,4, 5, 12 &
24A of Patent Act) has been discussed in detail. If an application for Exclusive
Marketing Rights (EMR) is made, the Controller shall refer it for patent to an examiner
for his report. When the reference of the patent claim to an examiner for
making his report is confined to the requirements of Sections 3 and, 4 of the Act
alone, there is no scope, for examining the said patent claim on the basis of any
of the other provisions of the Act, which may stand attracted when the patent
claim is taken up for consideration on merits.
The
grant of 'EMR' is by way of an interim measure, granted to an applicant, who
has filed the patent claim. Though Section 24A specifically excludes the
operation of Section 12(1) of the Act alone, inasmuch as Section 12(1) of the
Act provides for an examination under Section 13, it is only logical to hold
that consequent to the exclusion of Section 12 (1) from the purview of Chapter
IV-A, the requirements of Section l3 also stand excluded for the purpose of
Chapter IV-A. If that is so, application by previous publication or by prior
claim has no relevancy while examining the patent claim in the context of
deciding to grant or not to grant an EMR. The patent claim is under scrutiny
under Chapter IV-A for a limited purpose.
Since
Section 24-A of the Act not only excludes Section 12 but also Section 13, there
is no point in saying that the defence enumerated to Section 64(l)(e) can still
be pressed into service at this stage to invalidate the 'EMR'. Therefore,
search for anticipation by previous publication and by prior claim (Sections l3
and 29 to 34) is not attractive. The requirements of Section 24-A stand fully
complied with and there is no infringement of that section.
If
the applicant has received the approval to sell or distribute the article or
substance from the authority specified in this behalf by the Central Government
and if he satisfies the requirements of Section 24- B (1) (a) of the Act"
then EMR should follow.
Under
Rule 40 of the Patents Rules, 2003, once an application for an exclusive right
to sell is made to the Controller (Patents Controller), then the Controller shall
notify the filing of the application in the Official Gazette and to the
authority of the Central Government that is responsible for the grant of approval
to sell. Thus, the authority to issue a marketing approval is not an authority
under the Patents Act. Under the provisions of the Patent Act, once a marketing
approval is received by the applicant, then the Patents Controller puts the
seal of approval on it. Only to that limited extent, the marketing approval is
put up on the table of the Patents Controller.
In
this case, the infringing product of the defendants has come to be marketed before
the plaintiffs introduced their product in the market. The plaintiffs have an
'EMR' valid [or a period of five years or till the disposal of the patent claim
one way or the other, whichever is earlier and the Statute protects such rights.
On prima facie materials, the plaintiffs have established the validity
of the 'EMR'. When the Statute protects such rights, the balance of convenience
loses its significance, especially when the parties in opposition do not have a
legal ground in their favour at this stage. As far as public interest is
concerned the Patents Act itself had been taken into account.
Under
Section 24-D of the Act, the Central Government, on being satisfied that it is
necessary or expedient in public interest to allow the sale of the drug by a
person other than a person in whose favour the 'EMR' is granted, it can do so.
Under Section 24-D(2) of the Act, the Government has a right, having regard to
the public interest involved, to fix the price, determined by an authority
specified by it in this behalf, at which the 'EMR' holder should sell the said
product.
The
Court has held that inasmuch as the Court has to go only by prima facie materials
at this stage, taking into account the statement made at the Bar that the drug
marketed by the defendants contains "Beta Crystals" though in a lower
percentage, it is clear that there is an infringement, especially when the
invention claimed by the plaintiffs is "Beta Crystalline form of Imatinib
Mesylate". "Beta Crystal" form is the invention claimed by the
first plaintiff and it is related to the drug marketed by them in the name of
"Imatinib Mesylate". Consequently, the Court held that the granting
injunction as prayed for in all the original applications and as a result thereof,
all the original applications would stand allowed as prayed for and all the
applications filed to vacate the injunction would stand dismissed.
02. Novartis AG & Anr. v. Mehar Pharma & Anr. 2005 (30) PTC (Bom)
Defendants
were dealing in anti-cancer drug composed of "B-Crystalline form of Imatinib
Mesylate Salt" under brand name "VEENAT".
The
plaintiffs have moved the present notice of motion in the suit seeking relief
seeking a restraint order against the defendants from manufacturing for sale, sell,
marketing and exporting their anti-cancer drug composed of the ' B-Crystalline form
of Imatinib Mesylate salt" under the brand name "Veenat".
Plaintiffs
claim that they hold the EMR in respect of said drug granted under Chapter IV-A
of Patents Act and marketing under their brand drug "GLIVEC".
Defendants
are the largest suppliers of anti-cancer drug in market and also manufacturing
said drug in India while plaintiffs import the same from Switzerland. Whereas
the drug of plaintiffs costs Rs. 1,000/- that of the defendants costs only
about Rs. 90/-. Grant of EMR is only a step in the direction of grant of patent
and presumption in relation to validity of patent granted by authorities on a higher
level than EMR.
If
defendants are restrained from manufacturing and marketing their drug it would
cause great prejudice to public health and public interest creating great
public health crisis with disasters consequences, their drugs being used by more
than 30,000 patients on facts. Court held that the plaintiff is not entitled to
grant of temporary injunction sought by them, and the plaintiff’s interest
would be safeguarded if the defendants directed to maintain an account of their
trade and giving an undertaking to pay damages if the plaintiffs win the suit.
04. FACTS OF THE NOVARTIS CASE
01. Facts of the Case
In
1997, Novartis, a Swiss based pharmaceutical giant filed an application to
grant patent to an anticancer drug Glivec which is used to treat Chronic
Myeloid Leukemia (CML) and Gastrointestinal Stromal Tumours (GIST) on the basis
that it invented the beta crystalline salt form (imatinib mesylate) of the free
base, imatinib.. It is a critical drug which is patented in about 35
countries of the world.
India
did not grant patent to pharmaceutical products and agrochemical products.
It was in the year 2005, in India, the drug products became the subject
of patent in compliance with the TRIPS agreement. India thereon revised its
patent law and started granting patents on pharmaceutical drugs. In 2006, the
Madras Patent Office refused the patent application of Novartis for its drug
Glivec stating that the said drug did not exhibit any major changes in
therapeutic effectiveness over its pre-existing form, which was already
patented outside India. The said decision was based on Section 3(d) of the
Indian Patents (Amendment) Act, 2005 which provides a known substance can
only be patented if its new forms exhibit “enhanced efficacy”. The Patent
Office did not find any enhanced efficacy in the drug Glivec and, therefore,
considered it incapable of patentable under Section 3(d) of 2005 Act.
In
May 2006, Novartis filed two writ petitions under Article 226 of the Indian
Constitution before the High Court of Madras – one appealing against the order
of Madras Patent Office rejecting its patent request and the other contesting
that Section 3(d) of the Indian Patents Act is not in compliance with TRIPS and
is vague, arbitrary and violative of Article 14 of the Constitution.
The
Madras High Court refused the Writ Petitions of Novartis holding that it did
not have jurisdiction to determine whether a domestic law is in contrary to
international treaty, so it cannot decide whether Section 3(d) is in compliance
with TRIPS. As far as Section 3(d) is considered, the objective of the
Amending Act was to prevent evergreening and to make easy the access to
life-saving drugs to the citizens. Therefore, it cannot be considered to be
vague and arbitrary.
Then
a new phase of litigation started in Intellectual Property Appellate Board,
which is an appellate body of patent controller. IPAB considered the
beta-crystalline form of imatinib mesylate as new and an inventive step but
refused to grant a patent to the drug of Novartis since it was hit by Section
3(d) of the Act. Novartis challenged the said order by filing Special Leave
Petition before the Supreme Court.
02. Facts on the Disputed Product
Patents
for the free base of imatinib were granted to Ciba-Geigy Corporation in October
6, 1993 (EP0564409) and in May 28, 1996 (US5521184). Later, Ciba-Geigy Corporation was
merged with Sandoz Laboratories to create Novartis
in 1996.
The drug Glivec, manufactured by
Novartis Pharmaceuticals, was originally invented by Jurg Zimmerman, a
medicinal chemist, who invented a number of derivatives of
N-phenyl-2-pyrimidineamine. The name Imatinib was given to one of the derivatives
as a non-proprietary name by the World Health Organisation. The
derivatives, including Imatinib, are capable of inhibiting certain protein
enzymes and have valuable anti-cancer properties, which makes them suitable for
the treatment of warm blooded animals. Imatinib and other derivatives were submitted to the
United States (US) Patent Office for the registration of a patent on 28 April
1994 and the patent was granted in 1996.
Further research revealed that the
beta crystalline form of Imatinib is more stable, Novartis sought to patent this in the
US as well, and after initial opposition from the Patent Office, a patent was granted
in the US.
Novartis also applied for a patent in India for the same product in 1998, but the
application was considered only in 2005, when India became truly compliant with the TRIPS Agreement.
The basis for Novartis' patent
application for the beta crystalline form of Imatinib in India was an alleged
inventive step that materialised when a two-stage invention process involving
the introduction of a specified amount of beta crystals into the base form of Imatinib was embarked upon. Very specifically, the claims in the patent
application alleged the following about the Beta crystalline form of Imatinib:
(a)
it had more beneficial flow properties;
(b)
it had better thermodynamic stability; and
(c)
it had lower hydroscopicity than the alpha crystalline form of Imatinib.
It was alleged that these properties
made the beta crystalline form of Imatinib "new" and superior due to
its ability to store better, be processed more easily, and its having
"better processability of the methanesulfonic acid addition of a compound
formula I" coupled with the advantage of storing and processing.
Two important developments occurred
before the patent application was considered by the Chennai Patents Office.
Firstly, the Patents Act was amended and section 3(d) was
introduced. Secondly, before the patent application was considered, it had
attracted five pre-grant oppositions. The most vocal oppositions came from rival
pharmaceutical companies and patient groups, basing their opposition mainly on
the fact that the alleged invention had been anticipated, was obvious, and ran
afoul of section 3(d) of the Patents Act.
The application for the patent of
the beta crystalline form of Imatinib was heard by the Assistant Controller of
Patents and Designs and the application was rejected. The
Assistant Controller of Patents and Designs rejected the application on the
basis that the invention had been anticipated by reason of prior publication, its lack of
novelty and its not meeting the acid test of section 3(d).
Novartis appealed the decision of
the Assistant Controller of Patents and Designs to the High Court in Madras, in
addition to asking for an order that section 3(d) was unconstitutional and also
fell afoul of the TRIPS Agreement. At that time the Intellectual Property Appellate Body
(IPAB) had not been formed. After the IPAB had been formed the matter was
remitted to it by the Madras High Court. Despite ruling in favour of Novartis
by reversing the findings of the Assistant Controller on novelty and
non-obviousness, the IPAB ruled that the patent could not be granted in the
light of the provisions of section 3(d) of the Act, which, according to the
IPAB, introduces a higher standard of inventiveness and provides that what is
patentable in other countries will not necessarily be patentable in India. The IPAB
further observed that the specific section was particularly targeted at
drugs/pharmaceutical substances.
IPAB referred to the pricing policy
of Novartis, which had exclusive marketing rights over Glivec, which sold at
120 000 Indian Rupees per month per required dose, and concluded that the
patentability of the subject product would fall foul of section 3(b) of the
Act, which prohibits the granting of patents on certain inventions the
exploitation of which could cause public disorder, among other social ills.
Novartis
then appealed the decision of the IPAB to the Supreme Court of India. Supreme
Court was initially reluctant to hear the appeal but was swayed by the public
interest in the matter and the delays that had accompanied the finalisation
of the matter. Judgment was delivered on 1 April 2013. Supreme Court rejected the patent
plea by Novartis AG for cancer drug Glivec, boosting the case for cheaper drugs
for life-threatening diseases
Some
facts about the Glivec are given below..
*
Glivec is a medicine discovered and developed by Novartis for the treatment of
chronic myeloid leukemia (CML), a cancer of white blood cells and for the
treatment of a rare form of stomach cancer called gastrointestinal stromal
tumor (GIST) .
*
Glivec is one of the first cancer drugs that validate rational drug design,
based on an understanding of how some cancer cells function. Novartis claims
that these molecularly targeted drugs are different because they target
abnormal proteins that are fundamental to the cancer itself.
*
Glivec, when used in treating chronic myeloid leukemia and some other cancers,
costs a patient about $2,600 (Rs 1,30,000) a month. Its generic version was
available in India for around $175 (Rs 8,750) per month, as reported by
Associated Press. The medicine is the lifeline for poor in many developing
countries.
*
Novartis had argued that it needed new patent to protect its investment in the
cancer drug Glivec while activists said the company was trying to use loopholes
to make more money out of a drug whose patent had expired.
*
Glivec has been patented in nearly 40 countries but only faced problems in
India. The drug was given an EMR by the Indian patent office in the
year 2003, which was for the duration of 5 years. Later, Novartis sued Ranbaxy
and Cipla before the High Courts of Madras and Bombay against making the
generic versions of Glivec.
02. Main Issues of the Case
The
main issues that came before the Supreme Court were-
1.
Whether
the invention is consistent with Section 3(d) of the patent act?
2.
Interpretation
of Section 3(d) of the patent act?
3.
Whether
the invention qualifies for the test of novelty and inventive for the alleged
product?
03. Approach by the Supreme Court
The
Supreme Court adopted the following approach-
- Court observed that the product was one of the new forms of the substance and not the whole substance. It has always existed in the original amorphous form. The product thus has to qualify the test laid down in Section 3(d) of the Patent Act.
- The Section clearly specifies that a new form of the substance in not patentable under Indian law unless it enhances its “known efficacy”.
- Novartis contended that the physico-chemical properties of the polymorph form of the imatinib molecule, i.e. better flow properties, better thermodynamic stability and lower hygroscopicity, resulted in improved efficacy and hence is patentable under Indian law.
- The Apex Court rejected this contention stating that in the case of medicines, efficacy means “therapeutic efficacy” and these properties while they may be beneficial to some patients do not meet this standard. The Supreme Court also held that patent applicants must prove the increase in therapeutic efficacy based on research data in vivo in animals.
5. The Supreme Court held that the true
intention to enact section 3(d) was to prevent the concept of evergreening and
thus if the invention does not fulfil the test of Section 3(d), it cannot be
granted a patent. The court clarified that this case should not be interpreted
to mean that Section 3(d) bars all incremental inventions. It is with regard to
the field of medicine especially in cases of life-saving drugs, a great acre
and caution needs to be taken so as to protect the right to life of the masses.
05. FINDINGS OF THE SUPREME COURT
01. Details of the Judgment
He
judgment in Novartis AG v. Union of India, (2013) 6 SCC 1 is many
faceted and their summaries are given below.
A)
While
discussing Ss. 3(d) read with Explanation 2(1)(j) & (ja) and Sn 83 on known
substance or a new form of substance, Supreme Court held that patentability/patent
protection to new form of known/existing medicine/pharmaceutical product should
undergo the following tests, namely, (1) Invention Test, and (2) Enhanced
Therapeutic Efficacy Test. - Cumulative
applicability of opinion of experts/published research in reputed journals are
relevant and non-availability/ non-adducement of research/empirical data to
establish enhanced therapeutic efficacy is detrimental to the claim. The effect
of ``Evergreening" of existing form/product/salt which is actually
marketed (including claims/declarations made on packaging) should be prevented.
Deceptive patent claims can be inferred whenever warranted - Gleevec/Glivec, a
cancer inhibiting medicine manufactured by appellant is denied patent in India on
the grounds of obviousness and lack of novelty and anticipation from prior art.
No enhanced efficacy over known substance is proved. Supreme Court held that
Imatinib Mesylate was a ``known substance" from US Patent Zimmermann
Patent No. 5,521,184 (1996) and further, appellant could not establish that
b-crystalline-Imatinib Mesylate (``b-IM", for short) had any enhanced
therapeutic efficacy over Imatinib Mesylate. Thus, Gleevec/Glivec/b-IM did not
at all qualify for an Indian patent. Indian Patent Law supports only really
deserving patents in pharmaceuticals and discourages evergreening, as amended
portion of S. 3(d) sets up a second tier of qualifying standards for chemical
substances/pharmaceutical products in order to permit patents for true and
genuine inventions but, at the same time, to check any attempt at repetitive
patenting or extension of patent term on spurious grounds. To satisfy Invention
Test in respect of subject product i.e. b-IM appellant claimed that by
two-stage invention, they first invented ``Imatinib Mesylate" from
``Imatinib" (a derivative compound of N-phenyl-2-pyrimidine-amine)
invented by Dr Jürg Zimmermann and patented in Europe, and in United States
under Zimmermann Patent No. 5,521,184 – Then they invented
b-crystalline-Imatinib Mesylate (b-IM) from Imatinib Mesylate. To satisfy
Enhanced Therapeutic Efficacy Test, appellant claimed that ordinary Imatinib
Mesylate was converted into a-crystalline and b-crystalline forms. That
conversion of ordinary salt into b-crystals, rendered drug more effective as
b-IM salt had better absorbability and was relatively more stable, in addition
to other enhanced physicochemical properties such as more solubility, less
hygroscopicity, and had enhanced bioavailability, all of which rendered the new
form b-IM a more effective medicine. “Imatinib" itself was a disclosed
substance under Zimmermann Patent No. 5,521,184. Further, Zimmermann Patent No.
5,521,184 had the teaching for making of ``Imatinib Mesylate" from ``Imatinib",
and for its use in pharmacological compositions. Appellant applied for and
obtained patents for many forms of Imatinib (including its b and a-crystalline
forms), but never applied for any separate patent for non-crystalline Imatinib Mesylate
as appellant always maintained that Imatinib Mesylate is fully a part of
Zimmermann Patent No. 5,521,184. Furthermore, US Board of Patent Appeals while
granting US Patent Zimmermann Patent No. 6,894,051 B1 to appellant for b-IM had
also proceeded on basis that Zimmermann Patent No. 5,521,184 had the teaching
for making of “Imatinib Mesylate" from ``Imatinib." Appellant is
bound by this finding recorded in its own case. Hence considering all of the
above “Imatinib Mesylate" was a known substance under Zimmermann Patent
No. 5,521,184. Question whether b-IM involved an ``inventive step" was not
gone into. Even assuming that b-IM is new in the sense that it is not known
from Zimmermann Patent No. 5,521,184, enhanced physico-chemical properties of
b-IM i.e. (i) more beneficial flow properties, (ii) better thermodynamic
stability, and (iii) lower hygroscopicity, and enhanced bioavailability, though
otherwise beneficial did not of themselves establish enhanced therapeutic
efficacy (which must be judged strictly and narrowly) of b-IM vis--vis known
substance Imatinib/Imatinib Mesylate. Whether or not enhanced physico-chemical properties/bioavailability
of b-IM over Imatinib Mesylate/Imatinib-in-free-base-form led to an enhancement
of therapeutic efficacy had to be specifically claimed and established by
research/empirical data which was not done in the present case. In fact, there
were clear and unambiguous averments in subject Indian patent application of
appellant that all therapeutic qualities/pharmacological properties of
b-crystalline-Imatinib Mesylate were also possessed by Imatinib-infree- base-form
or its salts. The drug Gleevec as marketed in India (as also in United States),
on its package was described as ``Imatinib Mesylate tablets 100 mg" with
no reference to b-IM. Hence, claim for patent for b-IM was an attempt to obtain
patent for ``Imatinib Mesylate" which would otherwise be impermissible.
Thus subject product b-crystalline Imatinib Mesylate failed to qualify both
test of invention and test of enhanced efficacy/patentability as laid down
under Ss. 2(1)(j) & (ja) and S. 3(d).[i]
B)
Ss.
2(1)(j), (ja) and 3(d) & Explanation on known substance and new form of known
substance was discussed. Patentability/Patent protection to new form of known
chemical substance/pharmaceutical product has to undergo cumulatively
applicable qualifying tests: (1) Test of Invention, and (2) Test of Enhanced
Efficacy. Chemical substance/pharmaceutical product which is a new form of a
known substance with known efficacy must pass in addition to test of invention
given in Ss. 2(1)(j) and (ja), test of enhanced efficacy as prescribed in S.
3(d) read with Explanation thereto.[ii]
C)
S.
2(1)(j) r/w Ss. 2(1)(ac) & 2(1)(ja) and S. 3 and the meaning of ``New product"
was discussed. Meaning of ``new
product" in the context of chemical substances and pharmaceutical
products, explained a new product in chemicals and especially pharmaceuticals may
not necessarily mean something altogether new or completely unfamiliar or
strange or not existing before. It may mean something ``different from a recent
previous" product or a product “regarded as better than what went
before" or a product which is “in addition to another or others of the
same kind." However such “new" chemical/pharmaceutical would have to
qualify tests of invention and enhanced efficacy to qualify for patent
protection.[iii]
D)
Scope
of Ss. 3(d), 2(1) (ja) and 64(1)(e) & (f) and expression ``known"
under S. 3(d) were discussed. Relevance of meaning of ``publicly known" in
S. 64(1)(e) & (f) and obviousness to person skilled in the art have to satisfy
the requirement of being ``known" in S. 3(d). It is not necessary that it
should be widely used to knowledge of consumer public. It is sufficient if it
is known to persons who are engaged in pursuit of knowledge of the patented
product or process as persons skilled in the art, either as men of science or
as men of commerce or as consumers.[iv]
E)
Test
of enhanced efficacy prescribed in S. 3(d) read with Explanation thereto is
defined. ``Efficacy" means “ability to produce a desired or intended
result." Test of efficacy in each case would depend upon the function,
utility or purpose of product under consideration.[v]
F)
Meaning
of ``efficacy" in case of medicines/pharmaceuticals is ``therapeutic
efficacy" for the purpose of S. 3(d) read with Explanation thereto. Enhancement
of therapeutic efficacy of existing/known medicine by discovery of new form is
determined by the opinion of experts/published research in reputed journals. Court
upheld the relevance of empirical/research data. Physico-chemical properties
and bioavailability of the new form or enhancement thereof is of no avail. Therapeutic
efficacy of a medicine depends on whether it has the desired effect in curing of
disease for which it is prescribed. Therapeutic efficacy of a medicine must be
judged strictly and narrowly. Explanation to S. 3(d) indicates what is not to
be considered as ``therapeutic efficacy." Physico-chemical properties like
better flow, thermodynamic stability and lower hygroscopicity of the new form
do not automatically lead to inference of better therapeutic efficacy of the
new form. Increased bioavailability by itself may not necessarily lead to an
enhancement of therapeutic efficacy. Therapeutic efficacy has to be established
with reference to research/empirical data, whether it be attributable to
physicochemical properties, bioavailability or any other property/feature of
medicine/salt in question. B-crystalline Imatinib Mesylate (b-IM) is an
innovation of b-crystalline form i.e. b-IM with enhanced physico-chemical
properties, but without any research evidence to as to enhanced therapeutic
efficacy, it is not sufficient to afford patent protection to new formulation b-IM
of old drug.[vi]
G)
Only
such of the properties/features of the new form that directly relate to
enhancing its efficacy are relevant. Mere change of form/properties inherent to
the substance e.g. solubility of the salt/hygroscopicity of a polymorph,
without any enhancement in the efficacy of the known substance would not
qualify as “enhancement of efficacy" of the known substance for the new
form to qualify for independent patent protection.[vii]
H)
Appellant
claimed to invent ``Imatinib Mesylate" and ``b-crystalline-Imatinib Mesylate
(b-IM)" from Imatinib-in-free-baseform, a derivative of a chemical
compound (N-phenyl-2-pyrimidine-amine) patented under US Zimmermann Patent No. 5,521,184
- United States Board of Patent Appeals while granting US Patent Zimmermann
Patent No. 6,894,051 B1 to appellant for b-IM had proceeded on the basis that
Zimmermann Patent No. 5,521,184 had the teaching for making of ``Imatinib
Mesylate" from “Imatinib." Appellant is bound by this finding
recorded in its own case and cannot make a contrary claim in India that not
only b-IM but ``Imatinib Mesylate" is also a new product (being result of
an invention) contending that ``Imatinib Mesylate" was not there in
teaching of Zimmermann Patent No. 5,521,184.[viii]
I)
Limited
monopoly to patentee is in return for his willingness to place his knowledge in
public domain. Patent coverage/claim cannot
be wider than disclosures/teachings contained therein. Contrary view negates
very basis of patent protection.[ix]
J)
For
product patents, scope of intrinsic worth of invention is the central
consideration. Patent Law in India should not develop in a manner where scope
of patent is determined based not on intrinsic worth of the invention but by
artful drafting of its claims by skilful lawyers, and where patents are traded
as a commodity not for production and marketing of patented products but to
search for someone who may be sued for infringement of the patent.[x]
K)
While
discussing Ss. 2(1)(m), (j) & (ja), 3, 43 and 83 on patentability/patent
protection in Indian law, standard of inventiveness was held high. Indian
Patent Law lays down requirement of ``inventive step" in S. 2(1)(ja) and
``enhanced efficacy" in S. 3(d) for incremental improvements of known
substances/processes to qualify for patent protection in India. Standard of ``manipulative
step" in United States Patent Law is contrasted and Supreme Court held
that a “manipulative step" may or may not be an “inventive step,"
which is the requirement under Indian law. Hence, though appellant was
successful in United States in obtaining US Patent for b-crystalline-Imatinib
Mesylate since it involved a ``manipulative step" in respect of existing knowledge,
the same did not in present case qualify for patent protection under Indian
Patent Law.[xi]
L)
Considering
whether on an ex majore cautela (out of abundant caution) clause ‘Evergreening’
should be controlled, Supreme Court held that S. 3(d) which disqualifies
certain inventions/innovations from qualifying for patent protection, is a
substantive provision and not an ex majore cautela clause. Amended portion of
S. 3(d) sets up a second tier of qualifying standards for patent protection,
especially for chemical substances/pharmaceutical products, in order to permit
patents for true and genuine inventions but, at the same time, to check any
attempt at repetitive patenting or extension of patent term on spurious
grounds.[xii]
M)
On
S. 3(d) & Expln. thereto and Ss. 2(1)(j) & (ja) and 5 (since deleted)
and 83 as per 2005 Amendments to Patents Act, bringing a true import in the
context of pharmaceuticals and chemicals Supreme Court held that entitlement is
only of genuinely deserving and real incremental improvements of known
substances, to patent protection. Purpose of the Act is not to grant patent
unless it is a genuinely deserving invention. B-crystalline-Imatinib Mesylate (b-IM) found
herein to not be a real nor deserving incremental improvement of known
substance under Indian Patents Act and so denied Indian patent. Supreme Court cautioned
however, that failure of b-IM to meet standards of patentability in Indian law
is not to be understood as meaning that real and deserving incremental
improvements in/of other pharmaceuticals and chemicals would not qualify/meet
the said standards. It was also further held that deletion of S. 5 cannot be
interpreted as defeating purpose for which S. 3(d) was amended.[xiii]
N)
Commenting
on Ss. 2(1)(m), (j) & (ja), 3 and 43, Supreme Court held that grant of
patent in India has to undergo twin cumulative tests/pre-conditions of (1)
Invention, and (2) Patentability. Subject, for grant of patent, must satisfy
twin tests of “invention" and “patentability." Both are two distinctly
separate concepts under Patents Act. Every discovery or innovation is not an “invention"
for purposes of Patents Act, and every invention that so qualifies under Ss.
2(1)(j) & (ja) is not patentable if barred under S. 3.[xiv]
O)
Commenting
on S. 2(1)(j) read with Ss. 2(1)(ac) & 2(1)(ja) and S. 3, Supreme Court enumerated
tests/conditions which a product must satisfy to qualify as ``invention."
Distinctive, unanticipated and non-obvious innovation coupled with some
perceptible industrial or economic advantage alone are innovation meeting these
requirements and not barred from patent protection under S. 3 and was held as qualifying
as ``invention" for purpose of patent protection.[xv]
P)
On
differential treatment of inventions for patentability under S. 3 Supreme Court
held that the threshold requirements of patentability for different inventions
are different in S. 3.[xvi]
Q)
On
the significance of Ss. 5 (since deleted), 3(d), 2(1)(j) & (ja) as per amendments
made in 2005, it was held that the single most important change brought about
in Patent Law in India as a result of the country's obligations under TRIPS Agreement
was deletion of S. 5 from Patents Act, which re-opened the doors to product
patents in India.[xvii]
R)
Supreme
Court has taken into consideration for determining precise import of amendments
brought about in patent law.[xviii]
S)
Consideration
of patent claim on mailbox procedure and deferring consideration on patent
claim, in view of expected changes in patent law and the fact that patent
application taken out of mailbox after law was amended and rejection of claim
with reference to amended law was upheld, in the facts and circumstances.[xix]
T)
On Articles 136, 226 and 227 and the maintainability of SLP, non-exhaustion of alternate
remedy before High Court and SLPs directly against order of Intellectual
Property Appellate Board (IPAB), considering importance of issues involved in
the case, SLPs entertained, being: (i) patentability of a life-saving drug,
(ii) another Bench of Supreme Court had already heard the matter for some time,
(iii) patent might lapse if parties were sent back to High Court, and (iv) there
was consensus amongst contesting parties for final resolution of dispute by
Supreme Court itself was upheld. However it was cautioned that this is not to be
taken as a precedent and any attempt to challenge IPAB order directly in
Supreme Court side-stepping the High Court has to be strongly discouraged.[xx]
U)
On Harmonisation of intellectual property laws Supreme Court held that India
being a founding member of GATT and WTO, is bound by TRIPS Agreement.[xxi]
V)
Supreme
Court held that effort in India has been to meet international commitments
under TRIPS Agreement and at the same time to see that common man does not
suffer. TRIPS Agreement gave rise to widespread concern in developing and
less-developed countries. Protection of intellectual property rights (IPRs) of
pharmaceutical/agricultural companies and others at international level was one
aspect of matter. Other aspect was to
protect basic human rights, namely, proper nutrition, health and health care. India
while making significant changes in patent law to meet its TRIPS obligations
strove not to lose its reputation as pharmacy of the world. Prices of
pharmaceutical and agricultural products could not be allowed to go up beyond
certain limits. Amendments brought about in Indian Patent Law in 2004/2005,
were outcome of these two competing considerations.[xxii]
W)
Patents
regime under 1911 Act was held to be more helpful to foreign patentees than to
promote indigenous research and industrialization. That imbalance was corrected
by 1970 Act.[xxiii]
X)
Impact
of Patents Act of 1911 on pharmaceutical industry in India and how this industry
grew after change in Patent Law i.e. after enactment of new Act of 1970 (prior
to 2005 amendment) which denied product patents was delineated.[xxiv]
Y)
History
behind introduction of India being taking to WTO Dispute Resolution Panel
repeatedly and possibility of imposition of trade sanctions on India for not
complying with its obligations under Art. 27 r/w Arts. 70(8) & (9) of TRIPS
Agreement to introduce product patents regime.[xxv]
Z)
Deletion
of S. 5 from Patents Act, 1970 was the most important change which reopened doors
to product patents in India.[xxvi]
ZA)
On impact of hasty amendments to meet deadline on 1-1-2005 fixed for
implementing TRIPS obligations Supreme court held that loose ends have been
left in relevant legislation. This perhaps explains somewhat unclear drafting
of some very important provisions, which called for much greater clarity.[xxvii]
ZB)
Mischief
rule is the best way to understand meaning and purpose of a statute. This is particularly
relevant in respect of patent law in India. Legislative history of Patent Law
in India was discussed to understand the present Patent Law.[xxviii]
ZC) The
decisions in Utkal Contractors and Joinery Pvt.
Ltd. and others v. State of Orissa and others
(1987) 3 SCC 279, Reserve Bank of India v. Peerless General Finance and
Investment Co. Ltd. and others (1987) 1 SCC 424, A.C. Edwards
Ltd. v. Acme Signs & Displays Ltd. 35 U.S.C. § 282, Astellas Pharma Inc v. Comptroller-General of Patents
[1992] R.P.C. 131, Plant Genetics System, N.V. v. DeKalb Genetics Corp 315 F.
3d 1335, 1341 (Fed. Cir. 2003), Chiron Corp. v. Genentech, Inc 363 F. 3d 1247,
1257 (Fed. Cir. 2004), Monsanto Company v.
Coramandal Indag Products (P) Ltd. (1986) 1 SCC 642, In
re Hogan [2009] EWHC 1916 (Pat), etc. were considered /
relied on in this case.[xxix]
ZD)
Legislative
speeches in Parliament were also relied on.[xxx]
ZE)
On
interpretation of statutes, Supreme Court observed, “There are external and
internal aids. The external aids are statement of Objects and Reasons when the
Bill is presented to Parliament, the reports of committees which preceded the
Bill and the reports of Parliamentary Committees. Occasional excursions into
the debates of Parliament are permitted. Internal aids are the preamble, the
scheme and the provisions of the Act. Having discovered the reason for the
statute and so having set the sail to the wind, the interpreter may proceed ahead.”[xxxi]
ZF)
Supreme
Court observed that younger generation from Bar is producing very useful
material on aspects which were otherwise very technical and their contributions
were commended.[xxxii]
Many other important aspects of patent laws were
discussed in the judgment in Novartis AG v. Union of India.
01. An Appreciation of the Judgment
Clauses (j) and (ja) had deleted
section 5 of the previous Patents Act, which prohibited product patents
in India, and at the same time, amendments were effected to section 3,
introducing section 3(d). The Court expressed the opinion that in order to
understand the purport and objects of the amendments it was important to
identify the mischief parliament wanted to check. The object
which section 3(d) sought to achieve was to prevent evergreening, provide easy
access to life-saving drugs to citizens, and realise the constitutional
obligation to provide good health care to citizens.
The Court clarified that the 1970 Patents
Act as amended
in 2005 requires that inventions must be new (not anticipated), involve an
inventive step,
and be capable of being made or used in an industry. The
requirement that an invention must involve an inventive step implies that there
must be a feature that involves a technical advance as compared to existing
knowledge or having economic significance or both. Further,
this feature should be such that the invention is not obvious to a person
skilled in the art.
Under section 3(d), the following
are not inventions within the meaning of the Act:
(d) the mere discovery of a
new form of a known substance which does not result in the enhancement of the
known efficacy of that substance or the mere discovery of any new
property or new use for a known substance or of the mere use of a known
process, machine or apparatus unless such known process results in a new
product or employs at least one new reactant.
The new section 3(d) adds the words
in bold at the beginning of the provision, deletes the word "mere"
before "use" in the old provision, and adds an
explanation at the end of the clause. Very importantly, section 3(d) does have a detailed
explanation that fully contextualises the extent of the exclusions. Citing
Indian Parliamentary Debates, the Supreme Court observed that section 3(d) is
targeted 80 per cent at drugs and pharmaceutical products and 20 per cent at
agricultural chemicals. This was a bold admission by the Court that section
3(d) targets specific fields of technology (pharmaceuticals and agricultural
chemicals) since nothing had ever arisen in the context of the section in other
fields of invention.
In order to avoid doubt and a
possible misinterpretation of its judgment in the light of the overflowing
public interest in the matter both in India and internationally, the Supreme
Court issued a final note of clarity. Supreme Court held that the import of its judgment was
not to outlaw incremental inventions of chemical and pharmaceutical patents,
but that only those chemical and pharmaceutical inventions that did not lead to
the enhancement of therapeutic efficacy were barred by the judgment.
06. OPINIONS ON THE JUDGMENT
01. Opinions supporting the judgment
The court did not say that a new
form of a known compound could not be patented; neither did it say that
improving bioavailability characteristics of a drug may not result in enhanced
efficacy.
Rather, the court left open the issue of whether enhanced efficacy
refers narrowly to the curative effect of the drug or more broadly to the
improved safety and reduced toxicity of the drug. This clarity
is important for allaying the fears of the US and like-minded countries that
almost always conceive the contextual application of TRIPS flexibilities as an
affront to IP rights.
The manner in which the Indian
Supreme Court dealt with the application of section 3(d) in the specific context
should be encouraging. Many countries may be emboldened by this decision and
embark on IP law reform that takes into account each member's social and
economic needs.
This is a general assumption based on the apparently widely accepted
view that evergreening is bad and effects developing countries negatively.
The decision gave prominence to
public health issues over IP. This must be celebrated. In the judgment itself,
in the course of describing the history of IP law in India the Supreme Court
said that the Committee under the chairmanship of Justice N Rajagopala Ayyangar
"took a fresh look at the law of patents to completely revamp and recast
it to best subserve the (contemporary) needs of the country".
The Supreme Court of India displayed
sensitivity to the potential conflict, for both social and economic reasons. The Court
did, in actual fact, show that it was aware of the conflict when it clearly
recognised that the current IP system seeks to promote both innovation and
social economic welfare in India, thus making the benefits of the patented
invention available at reasonably affordable prices to the public.
The Novartis judgment delivers the
message that the problem of low quality patents continues, aided and abetted by
low quality patent examinations in the absence of pre- and post-grant patent
opposition. The Novartis decision demonstrates that TRIPS flexibilities are not
a paper tiger and can be used despite the pressure from big pharmaceutical
companies and the US government.
Because countries like India, China, Brazil
and Thailand bring political and economic resources to bear on their
interactions with multinational pharmaceutical companies and governments in the
US and Europe,
such strength may be used collaboratively to the benefit of other
developing countries.
It is reported that the entry of
Indian firms in the global drug supply market lowered the prices of first-line
triple combination antiretrovirals (ARVs), used in the treatment of HIV, from
US $15 000 per person per annum in the year 2000 to less than US $120 in 2012. It is
important to refer to the role that was played by civil society groups to
highlight the high stakes and importance of access to medicines. It has been
reported that the outcome of the case is consistent with the pattern in the
1990s of a de facto coalition between health advocates, NGOs and some
governments, including India, which are desirous of limiting the impact of IP
on access to medicines.
Various advocacy groups, such as
Médecins Sans Frontiers, Health Gap in the US, the Delhi Network of Positive
People and the Swiss-based Berne Declaration took part in lobbying against the Novartis case. In addition,
leading up to the Novartis AGM demonstrations were held in a number of US
cities such as Boston, New York and Washington, while in India more
demonstrations were held as a way of drawing attention to the Novartis case
The
verdict of the Novartis case “confirms the right of India’s Parliament to
implement public health safeguards available under the TRIPS Agreement”
The
decision to reject Novartis’ patent “has global significance since India’s
generic drug industry, valued at approximately USD $26 billion, supplies much
of the cheap medicine used in the developing world. The 300,000 patients
currently taking the drug and their advocates welcomed the verdict. The Supreme
Court’s decision now makes patents on the medicines that we desperately need
less likely. This sends a very strong signal to Novartis and other
multinational pharmaceutical companies that they cannot try to game Indian
patent law.
02. Opinions against the judgment
The rejection of Novartis' claims was met with criticism from the
pharmaceutical industry as shifting the balance too much in favour of the
protection of public health. A core provision in the 2005
Amendment was Section 3(d), which prohibited granting patents to a new form of
a known substance that did not enhance the efficacy of that substance. In Novartis
AG v. Union of India, the Supreme Court of India applied this new provision
to Novartis’s patent application for the final form of its drug Gleevec. The
court engaged in an unreasonably narrow analysis of enhanced efficacy,
potentially stifling secondary patents on important drugs and creating
significant uncertainty for pharmaceutical companies going forward. Novartis
AG evinces the ongoing tension between maintaining India’s status as the
“pharmacy of the world” and promoting scientific innovation in South Asia.
Novartis AG v. Union of India is
not the only recent case that has frustrated multinational pharmaceutical
companies’ attempts to break into India’s expanding drug market. In November
2012, the IPAB denied patent protection to Roche Holding AG’s hepatitis C drug
Pegasys, holding that the drug was “obvious” and thus did not satisfy India’s
inventiveness requirement. Only several months later, in March 2013, the Indian
Patents Office granted a compulsory license to Natco Pharma, permitting it to
sell a generic version of Bayer AG’s cancer drug Nexavar at a fraction of the
price for which Bayer sells its own drug. These cases illustrate the
difficulties that modern changes to Indian patent law have created for
multinational drug companies trying to enter India’s pharmaceutical
marketplace. Moreover, they raise the question whether India’s patent regime
has become overly protective of public health at the expense of important drug
development.
By limiting “enhancement of . . . known
efficacy” in Section 3(d) to therapeutic efficacy, the Supreme Court of India
engaged in an unreasonably narrow analysis of the issue, potentially stifling
veritable innovation by drug producers. The court’s restrictive interpretation
of efficacy excludes many important improvements on a drug—including increased
bioavailability, increased heat stability inside the body, longer shelf-life,
and reduction of microbial growth—because they do not result in an enhanced
healing effect on the body.
Rather than limiting its interpretation
of Section 3(d) to therapeutic efficacy, the Supreme Court of India should have
adopted either of the two following interpretations. First, the court could
have reasonably found that the inventive-step and industrial-application
requirements in Section 2(1)(j) encompass the enhanced-efficacy requirement.
Because “the inventive step and industrial application requirements themselves
require some level of increased efficacy above the prior art in order to obtain
a patent. Functionally, Section 3(d) is not a second bar to clear, but rather
is a reminder to patent examiners not to extend patents for drugs that are
considered obvious. Alternatively, the court could have found that
enhanced-efficacy refers broadly to improvements in the functioning of drugs.
Evergreening is commonly misunderstood,
and the threat it poses is perhaps exaggerated. A drug company engages in
evergreening when it extends the “market exclusivity of a drug beyond the life
of its original patent by obtaining multiple patents that cover different
aspects of that drug, including the active ingredient, formulations, methods of
manufacturing, chemical intermediates, mechanisms of actions, packaging,
screening methods, and biological targets. Evergreening, however, is sometimes
described as obtaining a second patent for the same subject matter while a
preexisting patent is in effect.
The court in Novartis AG manifested
a poor understanding of evergreening when it compared the beta crystalline form
of imatinib mesylate to distant free-base imatinib, rather than imatinib
mesylate. Because it was not capable of being administered as a drug to humans
in the first place, free-base imatinib lacked evergreening potential. Counsel
for Novartis testified that free-base imatinib, if given in solid dosage form,
. . . would sit in the stomach like a brick and would pass out with no
therapeutic effect. Despite the fact that free-base imatinib could not be
administered as a drug, the court precluded Novartis from receiving a patent
for a product that likely would have benefitted patients. The court thus
indicated that evergreening may include “the transformation of an entirely
inert substance into one that actually produces an effect on the human body.”
This suggestion is unsettling because the court’s application of Section 3(d)
barred the grant of a patent for a pharmaceutical product that the Indian
Parliament, in targeting evergreening, likely had no intention to exclude.
The court concluded that “whether or not
an increase in bioavailability leads to an enhancement of therapeutic efficacy
in any given case must be specifically claimed and established by research
data. Although the court ruled that Novartis did not provide sufficient
research data, it did not identify what type or amount of data would be enough
to prove enhanced efficacy.
Even if a certain amount of data is
sufficient to prove enhanced efficacy, it is unreasonable to require drug
manufacturers to prove enhanced efficacy so early in the drug-development
process. In his amicus brief to the court in Novartis AG, Shamnad
Basheer, a law professor at West Bengal University of Juridical Sciences, said,
“it would be impractical for drug companies to seek patents only after they
have conducted years of clinical trials that could provide definitive proof
that updated drugs work better than their older versions.” Pharmaceutical
companies usually seek patents several years before they are able to sell a
drug on the market
The 2005 Amendment’s changes to Indian
patent law are not favorable to multinational pharmaceutical companies. Section
3(d) poses the greatest threat to these companies by significantly restricting
their ability to obtain secondary patents on important drugs. Because
pharmaceutical products are exceedingly expensive to produce, drug
manufacturers rely on the monopolistic rights offered by patents to recoup the
exorbitant costs of researching and developing such products.
07. IMPACT OF THE NOVARTIS JUDGMENT
01. Impact in India
The Times of India (a known media group) said the
granting of patent would violate moral standards as the price of the newer form
of Glivec is too high compared to that of the income of average Indian. It also
felt the application violates section 3(b) of Indian Patent Act, 1970 which says “An invention whose
primary or intended use or commercial exploitation of which could be
contrary public order or morality or which causes serious prejudice to human,
animal or plant life or health or to the environment are not inventions
within the meaning of this Act.”
Since
the launch of Novartis’ patient assistance programme in 2002, Novartis have
provided nearly USD 1.7 billion worth of Glivec to Indian patients enrolled in
Glivec International Patient Assistance Program (GIPAP) at free of charge which
is laudable.
“The Glivec case will be a lesson for Pharma
Companies in a sense that they need to be more cautious about launching their
newest drugs in India before obtaining a patent” according to Marie
Fischer-Sabatie, Vice President – Senior Credit Officer, Moody’s Investors
Service. “Patented drugs must be priced smartly in India” said Kiran Mazumdar
Shaw of Biocon. Ranjit Shahani, Novartis India MD says “Supreme Court’s Glivec
ruling will ruin innovation”. So, in the Patent v. Patient battle in India,
patent has been put in the back seat to provide affordable drugs to the
patients in India.
The
Supreme Court’s rejection favors Indian patients specially the low income
groups as they can avail drugs from generic drug makers at a cheaper cost.
Novartis’
reaction was not surprisingly stated as an economic and research threat. It
stated that the “decision … discourages innovative drug discovery essential to
advancing medical science for patients.” It further stated that: “Novartis most
certainly continues to seek patents for its innovative products in India … but
will be cautious in investing in India especially with regard to introduction
of innovative medicines.” However,
Novartis in an effort to minimize negative publicity also strategically noted
that the 16,000 people (which represent around 95% of the patients currently
taking the branded drug Glivec in India) from the “Novartis Glivec
International Patient Assistance Program” will continue to receive the drug
free of charge.
02. Impact in Other Countries
This
judgment has attracted worldwide press coverage. It has received severe
criticism from a number of originator pharmaceutical companies, including
Novartis, and from the US Chamber of Commerce, to the effect the judgment of
the Indian Supreme Court has dealt a harsh blow against the future of innovation.
The
case involves a substantial number of fairly complex technical issues,
including some fairly complex legal issues.
One
of the most useful outcomes of the Supreme Court judgment is a renewed focus on
what innovation is — and how it should be rewarded. The death of innovation in
the country and the end of research for diseases which matter to us — is the
popular idea that patents are a proxy for innovation.
In
the last three decades, the global gold rush for patents has been dominated by
filings for minor and mostly inconsequential innovations, at the expense of
breakthrough innovation. In large part, this is because weak standards in the
patent laws of developed countries (led by the U.S. and Europe) have explicitly
encouraged this shift
If
the patent regimes of developed countries are dominated by minor patents, many
or most of which have no demonstrable innovation to show, why are they so
avidly pursued by global pharmaceutical companies? Any patent regime which
incentivises secondary patents with weak laws will only serve to extend
commercial monopolies at low levels of innovation — and will no longer provide
the incentive for genuine innovation. The genius of the Supreme Court judgment
on Novartis’s patent application lies in restoring the connection between
patents and innovation by upholding and legitimising a regime with a higher
threshold of inventiveness.
Indian
patent law will not change the way the global pharmaceutical industry innovates
immediately. But it could positively affect pharmaceutical innovation in the
long run. India comprises 1.3 per cent of the global pharmaceutical market by
value. But the symbolic opportunity presented by the Supreme Court’s backing of
Indian patent law, however, is a real threat to the pharma CEOs in New York,
London and Basel. In the long run, as more countries understand the Indian
model, appreciate its legitimacy, and reflect on its benefits to both public
health and innovation, they might want the same. And if that happens, as in the
case of South Africa and some other developing countries, we may begin to see
real, positive change in the way pharmaceutical innovation works.
09. CONCLUSION
Judgment
in Novartis AG Case comes as a huge relief for those people who can’t afford
the lifesaving drugs manufactured by pharma giants. These companies who have
already made billions of dollars prevent people from purchasing the drugs at
low price thus endangering the very life of the poor people by acquiring
patents over their drugs.
The right to health of people is duly protected in a way towards
Trade Related Intellectual Property Rights (TRIPS) agreement by giving nod to
life saving drug. As India is a developing nation it is necessary that the
medicines to be available at cheap and affordable price, the poor cannot be put
at the risk of life when there is
adequate cure exist.
The
Novartis case sets an important precedent for access to medicines by putting
the pharmaceutical industry on the reach of patent law. This case illuminates
how India is respecting its global obligations concerning intellectual property
laws while ensuring that domestic needs are respected by interpreting its legal
obligations in a way that is commensurate with domestic preferences and needs.
The ruling puts social justice over commercial interests and also helps India’s
own domestic industry.
BIBLIOGRAPHY
1. Dr. S.R. Myneni, Law of Intellectual Property, Asia
Law House, Hyderabad, 7th Edition 2014
2. Dorothy Du, Novartis AG v. Union of India,
Evergreening, Trips and Enhanced Efficacy under Section 3(d), Journal of
Intellectual Property Law, University of Georgia, Vol 21, Issue 2, Article 2,
Spring 2014
3. Kevin Tarsa, Novartis AG v. Union of
India: Why the Court’s Narrow Interpretation of Enhanced Efficacy Threatens
Domestic and Foreign Drug, Boston College International and Comparative Law
Review, Volume 39 Issue 3 Electronic Supplement Article 5, 5-18-2016
4.
The Patents Act, 1970, IP Intellectual Property India, updated as on
23.06.2017, Government of India, 2017
9. https://en.wikipedia.org/wiki/Main_Page
NOTES
[i] (2013)
6 SCC 1-A
[ii]
(2013) 6 SCC 1-B
[iii] (2013)
6 SCC 1-C
[iv]
(2013) 6 SCC 1-D
[v]
(2013) 6 SCC 1-E
[vi]
(2013) 6 SCC 1-F
[vii]
(2013) 6 SCC 1-G
[viii]
(2013) 6 SCC 1-H
[ix] (2013)
6 SCC 1-I
[x]
(2013) 6 SCC 1-J
[xi]
(2013) 6 SCC 1-K
[xii]
(2013) 6 SCC 1-L
[xiii]
(2013) 6 SCC 1-M
[xiv]
(2013) 6 SCC 1-N
[xv]
(2013) 6 SCC 1-O
[xvi]
(2013) 6 SCC 1-P
[xvii]
(2013) 6 SCC 1-Q
[xviii]
(2013) 6 SCC 1-R
[xix]
(2013) 6 SCC 1-S
[xx]
(2013) 6 SCC 1-T
[xxi]
(2013) 6 SCC 1-U
[xxii]
(2013) 6 SCC 1-V
[xxiii]
(2013) 6 SCC 1-W
[xxiv]
(2013) 6 SCC 1-X
[xxv]
(2013) 6 SCC 1-Y
[xxvi]
(2013) 6 SCC 1-Z
[xxvii]
(2013) 6 SCC 1-ZA
[xxviii]
(2013) 6 SCC 1-ZB
[xxix]
(2013) 6 SCC 1-ZC
[xxx]
(2013) 6 SCC 1-ZD
[xxxi]
(2013) 6 SCC 1-ZE
[xxxii]
(2013) 6 SCC 1-ZF
