This article is written by Harsha Jeswani and further updated by Shriya Singh. It discusses in detail the facts of the case, the issues raised, the provisions involved, and the observations of the Supreme Court. Additionally, it also covers the after effects of the landmark judgement.

This article has been published by Shashwat Kaushik.

Introduction

Intellectual property is an intangible category of property, and a ‘patent’ is a subset of it. An innovation that grants its owner the legal right to prevent others from creating, using, or commercialising it for a certain amount of time in exchange for publishing an enabling disclosure of the invention is known as a patent. When an innovation is granted a patent, the state grants the creator a legislative right to prohibit others from producing, using, or commercialising their creation for a maximum of 20 years. 

Download Now

One of the seminal rulings in Indian history was rendered by the two-judge bench of the Hon’ble Supreme Court of India in Novartis AG v. Union of India (2013). In this landmark judgement, the pharmaceutical corporation Novartis contested the denial of their patent application for the leukaemia treatment Gleevec, launching the first significant judicial challenge to India’s recently modified patent legislation. India supposedly made the last adjustments needed in 2005 to bring its intellectual property laws up to par with the World Trade Organization’s minimum standards for intellectual property protection, known as the Trade-Related Aspects of Intellectual Property Rights. 

The judgement rendered by the Supreme Court in the case mentioned above is one of the landmark judgements of the Supreme Court. The decision came as a relief for millions of people around the world to have access to medicines at a low cost, thus preventing the pharmaceutical industries from “evergreening” their patents.  While the judgement is seen as a means to ensure the availability of life-saving drugs at an affordable price to people in India and elsewhere, at the same time the decision defined the scope of Section 3(d) of the Patents Act, 1970. In the said matter, the Supreme Court refused to grant a patent to a drug by Novartis AG on the basis that the said drug did not involve an invention that is capable of being patentable under Indian law.

Details of Novartis A.G. v. Union of India

Following are the details of the case-

  1. Case Name– Novartis Ag vs Union Of India & Ors
  2. Equivalent Citations– AIR 2013 SUPREME COURT 1311, 2013 AIR SCW 2047, 2013 (5) SCALE 12, 2013 (6) SCC 1, 2013 (115) CORLA 7.2 SN, 2013 (3) KCCR 276 SN, (2013) 2 RECCIVR 685, (2013) 5 SCALE 12, (2013) 3 MAD LJ 421, (2013) 3 MAD LW 449, (2013) 4 ALL WC 3611
  3. Court– Supreme Court of India
  4. Bench– Justice Ranjana Prakash Desai and Justice Aftab Alam
  5. Appellants– Novartis AG, Natco Pharma LTD., M/S Cancer Patients Aid Association 
  6. Respondents– Union of India & Others
  7. Judgment Date– 1st April, 2013

Brief facts of Novartis A.G. v. Union of India

Novartis, a multinational pharmaceutical company with headquarters in Switzerland, applied in 1997 for a patent of Glivec, an anticancer medication used to treat gastrointestinal stromal tumors and chronic myeloid leukaemia. The company claimed to have invented the beta crystalline salt form of imatinib (Imatinib is a 2-phenylamino-pyrimidine derivative protein used to manage and treat chronic myelogenous leukaemia, gastrointestinal stromal tumours, and other cancers), which is imatinib mesylate. The medication was a vital one, which had already been granted the status of patent in thirty-five other nations.

A two-stage innovation procedure incorporating the insertion of a predetermined number of beta crystals into Imatinib’s base form resulted in the claimed inventive step and served as the foundation for Novartis’ patent application for the beta crystalline version of Imatinib in India.

Particularly, the patent application’s claims state the following details regarding imatinib’s beta crystalline form-

  • Its flow qualities were more advantageous,
  • Its thermodynamic stability was superior, and 
  • Compared to imatinib’s alpha crystalline form, it was less hydrophobic.

The beta crystalline form of imatinib was said to be “new” and superior because of these properties, which included “better processability of the methanesulfonic acid and the inclusion of a complex formula-I, in addition, provides the benefit of processing and storing.

Nevertheless, agricultural and medicinal goods were not granted patents in India until then. That is to say, only methods and processes were granted patent in India and not the products. In accordance with the TRIPS agreement, pharmaceutical items were granted patent protection in India after 2005. Following that, India updated its patent legislation and began awarding patents for medical products. The Madras Patent Office subsequently rejected Novartis’ 2006 application for a patent on its medication Glivec, citing the drug’s prior, internationally patented version as the reason for no significant improvement in therapeutic efficacy. Section 3 of the Indian Patents (Amendment) Act, 2005, served as the foundation for the aforementioned ruling. This provision states that a known chemical may only be patented if its new forms demonstrate “enhanced efficacy.” The Patent Office determined that Glivec could not be patentable under Section 3(d) of the Act, since it did not identify any increased effectiveness in the medication.

Novartis filed two writ petitions under Article 226 of the Indian Constitution with the High Court of Madras in May 2006. The first appealed against the Madras Patent Office’s decision to deny Novartis’ request for a patent, while the second contested the Indian Patents Act’s Section 3(d) on the grounds that it violated Article 14 of the Constitution and was unclear, arbitrary, and not compliant with TRIPS.

The Madras High Court denied Novartis’ Writ Petitions, stating that it lacked the authority to assess whether a local statute violates an international treaty and hence could not evaluate if Section 3(d) complies with TRIPS.  Regarding Section 3(d), the Amending Act’s goals were to stop evergreening and give individuals simple access to life-saving medications. It cannot be seen as ambiguous and arbitrary as a result.

The Intellectual Property Appellate Board (IPAB), an appellate body of patent controllers, saw the beginning of a new period of litigation as the said case was transferred to IPAB from the High Court. Although the IPAB regarded the imatinib mesylate beta-crystalline form as a novel and innovative development, it declined to award Novartis a patent for the medication due to its violation of Section 3(d) of the Act. Novartis filed a Special Leave Petition under Article 136 of the Constitution with the Supreme Court to contest the aforementioned ruling.

Provisions involved 

The entire case mainly deals with the following provisions of the Patents Act, 1970:

Section 2(1)(j) 

Section 2(1)(j) of the Patents Act, 1970, defines the term “invention“. The provision states that invention means a new product or process that involves an inventive step and is capable of industrial application. 

Section 2(1)(ja) 

Section 2(1)(ja) of the Patents Act, 1970, defines “inventive step“. It states that an inventive step is a feature of an invention that involves technical advances. It further states that the technical advancement, when compared to the existing knowledge, economics, or both, does not make the invention of wheels in the eyes of the persons killed in that art.

Section 3(d) 

Section 3 of the Patents Act, 1970, brings out a list stating what are not inventions within the meaning of this Act. Section 3(d) provides that the following are not inventions –

  • The simple act of discovering a new form for a substance that is already known; or 
  • The mere discovery of a new property, the application for which is already in existence; or 
  • The simple act of using a machine, apparatus, or process that is already known unless the known process produces a new product or uses at least one new reactant. 

The explanation attached to the provision provides that for the purpose of this Act, certain substances are considered to be the same unless their properties significantly differ in terms of efficacy. The mentioned substances are as follows –

  • salts, 
  • esters, 
  • ethers, 
  • polymorphs,
  • metabolites, 
  • pure form, 
  • particle size, 
  • isomers, 
  • mixtures of isomers,
  • complexes, 
  • combinations, and 
  • other derivatives of a known substance

Issues

The main issues that came before the Supreme Court were:

  1. Whether the invention is inconsistent with Section 3(d) of the Patent Act or not?
  2. How should efficacy be interpreted under Section 3(d) of the Patent Act?
  3. Does the invention qualify for the test of novelty and invention for the alleged product?
  4. Whether the invention of the ‘beta crystalline form of imatinib mesylate’ claimed by Novartis is more efficient than the substance from which it is derived, i.e., ‘imatinib mesylate’?

Arguments by both parties 

Arguments raised by the appellant

The following arguments were made by Novartis-

  • Novartis stated that the provision [Section3(d)] is ambiguous and has resulted in arbitrary decisions since it is unclear what exactly qualifies as an “enhancement of efficacy” and “significant enhancement of efficacy,” as needed.
  • Novartis contested the Intellectual Property Appellate Board’s decision regarding Section 3(d). They contended that while its patent application meets the requirements for novelty, inventive step, and industrial application and qualifies as an “invention” under Section 2(1)(j) of the Patents Act, 1970, the provision pertaining to “discoveries” does not apply to it.         
  • They also claimed that the Intellectual Property Appellate Board’s ruling ignored the fact that they believed the beta-crystalline to be an innovation and that it met the novelty test. Instead, they applied Section 3(d), which deals with discoveries, and rejected Novartis’ invention for patent protection.
  • They contested the Intellectual Property Appellate Board’s ruling that the word “efficacy” refers to medicinal efficacy, claiming that a single word in legislation cannot have two distinct meanings. In other words, they argued that there cannot be any further meaning associated with the term ‘efficacy’ other than ‘medicinal efficacy’.
  • They argued that enhanced biodiversity and thermodynamic stability are characteristics that improve efficacy, and the beta crystalline form of imatinib mesylate demonstrated both of these qualities. Ultimately, they concluded that only the beta crystalline form of imatinib mesylate had a therapeutic effect, in contrast to the original forms.
  • It is not conceivable to demonstrate greater efficacy of the beta-crystalline form of imatinib mesylate; Section 3(d) could only be applied to substances already in existence and stressed that such efficacy had never been proven for imatinib.

Arguments raised by the respondents 

Numerous arguments were presented by the respondents in the Apex Court, with the main goal being to demonstrate that-

  • The beta crystalline form of imatinib mesylate is neither novel nor non-obvious given that the drug was first published in 1996 in Cancer Research and Nature.
  • The efficacy mentioned in Section 3(d) should be understood to mean therapeutic efficacy rather than just physical efficacy.         
  • The Doha Declaration was used by the respondents a lot, and they also included passages from parliamentary discussions, Non-Governmet Organisations’ petitions, and the World Health Organization’s petitions, among other sources, to emphasize the public policy aspect of the arguments about the accessibility and price of life-saving medications.

Observations of the Supreme Court

The 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. For the patentability, the product, thus. has to qualify for the test laid down in Section 3(d) of the Patent Act. The Section clearly specifies that a new form of the substance is not patentable under Indian law unless it enhances its “known efficacy”. 

Novartis contended that the physicochemical 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.

Three alternative meanings of “enhanced efficacy” have been assigned by the Hon’ble Supreme Court in this case. They are-

  1. The first interpretation holds that India’s standards for “industrial application” and “inventive step” fully encompass greater effectiveness.
  2. According to the second meaning, any improvement in how well a medication works as a treatment is referred to as increased effectiveness.
  3. The third is that, according to the Madras High Court and the IPAB, greater efficacy solely refers to therapeutic efficacy. There are trade-offs associated with each interpretation, and they all have implications for public health, innovation, and ever-greening.

The Supreme Court in the Novartis case examined the relationship between Section 2(1)(j) and Section 3. It found that they create separate filters, that is, even though a product or a process might be considered as an invention under Section 2(1)(j), it could still be denied a patent under Section 3 if it falls within any of the enshrined listed items of Section 2(1)(j).

The court recognised that Section 2(1)(j) states that there are three elements of invention, which are given as follows-

  • It must be new, and it must possess novelty 

One of the most important factors in determining whether an invention may be patentable is its uniqueness. “Any invention or technology that, as long as the subject matter has not entered the public domain or is not part of the state of the art, has not been anticipated by publication in any document or used in the nation or abroad in the world before the date of filing of a patent application with complete specification.” Stated differently, the originality requirement mandates that an innovation must never have been disclosed to the public. It must be entirely original and unrelated to any previous works of the same or similar kind. 

In addition to being a completely novel product or service, the innovation has to generate new data and a fresh approach. It has to be different from all that is known at this time. Second, no prior publication of this innovation exists. On the other hand, a straightforward discovery with a few special characteristics does not qualify as an innovation. Furthermore, these two requirements must be met in order to grant patent rights: invention and usefulness. To be eligible for patent protection, an invention must be new and distinct. Novelty by itself does not constitute a complete criteria. Additionally, the product needs to be sufficiently original and helpful.

  • It must have an inventive step. In some jurisdictions, it is also called the non-obviousness requirement, that is, the invention must not be obvious 

A feature of an innovation that makes it difficult for someone with experience in the field to understand and involves either technological advancement relative to what is known already or economic significance. This implies that an individual who is informed about the subject matter of the invention must not be able to recognize the innovation. It ought to be distinct and difficult for an expert in the field to notice.

To develop a product, the inventor or creator must have used their own unique and innovative ideas. The invention should be of the kind that, under normal circumstances, a specialist in the same subject would not have predicted. However, one must bear in mind that the technological answer offered by someone would not be considered creative.

  • It must be capable of industrial applications 

“The invention is capable of being manufactured or employed in an industry” is the definition of industrial applicability. In essence, this indicates that the invention is not feasible in theory only. The requirement that a product should be relevant to all industries suggests that an idea cannot be patented unless it has real-world applications. In order to protect and ensure that the inventor may profit from their invention without fear of competition, patent certificates are granted. It is imperative, therefore, that the innovation be practical and have industrial uses.

The Honourable Supreme Court has seen these elements as the core test for patentability.

“Therapeutic efficacy” is what is meant to be understood when one speaks about efficacy. Since the true objective of Section 3(d) was to prohibit the idea of “ever-greening” patents, no patent can be issued if the test in that Section is not met. Additionally, it was decided that increased bioavailability does not always translate into increased therapeutic effectiveness. It was determined that Novartis’ 30% improvement in bioavailability was inadequate. 

Nothing about the enhanced effectiveness in beta form is disclosed by this patent. In this instance, the Court stressed that Novartis had not shown any proof demonstrating that the drug’s therapeutic impact on the human body was genuinely enhanced by the beta crystalline form’s higher bioavailability. 

The court further said that the definition of “invention” as stated in Section 2(1)(j) is “a new product, but the new product in chemicals and especially pharmaceuticals may not necessarily mean something entirely new, completely unfamiliar, strange, or not existing previously.” As a result, it was decided that imatinib mesylate’s beta crystalline form did not pass the inventiveness and patentability tests.

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 further specified 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, that great care and caution need to be taken so as to protect the right to life of the masses.

Because imatinib mesylate was already covered under the patents for the original drug imatinib, the Supreme Court ruled that it lacked originality. The court examined several scientific publications that explain imatinib, the free base, as well as imatinib mesylate, its salt form. The court further ruled that a patent holder cannot use a restricted interpretation of an already-existing invention when assessing its novelty in relation to a salt derivative while simultaneously asserting a wide interpretation of the same patent in infringement proceedings. The court agreed with the Intellectual Property Appellate Board’s assessment that the beta crystalline form was not a patentable “invention” since it did not satisfy the increased efficacy criteria outlined in Section 3(d) of the Patents Act and could not be regarded as innovative.

Hence, the appeal by Novartis was dismissed.

Rationale behind the judgement

Along with preventing “evergreening,” or the practice of prolonging a patent’s term by making small changes to an already-existing product, the case also seeks to strike a balance between the interests of innovation and public health.

The Glivec medication, which treats chronic myeloid leukaemia and some other cancers, is at the centre of the issue over its patentability. The molecule imatinib, the basis for Glivec, was previously identified and protected under a US patent held by Novartis. Imatinib was said to have been created by Novartis in two distinct forms- imatinib mesylate, a salt form that rendered it soluble in water and appropriate for oral use, and a particular polymorph. 

The Court further explained the intent behind Section 3(d), saying that it was meant to guarantee that only legitimate ideas are given patents in India and to stop the evergreening of patents.

Since the Court’s ruling guaranteed the continued production and reasonable pricing of generic Glivec in India and other developing nations, the ruling was widely heralded as a win for public health and access to medications. For many CML and other cancer patients, Glivec is a lifesaver; nonetheless, the majority of individuals cannot afford it. While generic manufacturers offer Glivec for roughly $175 per patient per month, Novartis sells it for about $2,600 per patient per month. The ruling was also interpreted as upholding India’s policy space and autonomy in setting its patent requirements and safeguarding the public interest.

Analysis of Novartis A.G. v. Union of India 

The resolution of the problems presented in this case hinged on the appellant’s ability to get the patent, Imatinib Mesylate, by filing an application. The Indian Patents (Amendment) Act, 2005 defines what constitutes a “new invention” as any invention that has not been published beforehand or used in any part of the world prior to the filing date of the patent application, which must include a complete specification. Stated differently, it is neither included in the state of the art as defined by Section 2(1)(l) nor is it a part of the public domain.

While interpreting “inventive step” in accordance with Section 2(1)(ja) of the aforementioned Act, it was held that an invention must either achieve economic significance, a technological advance relative to the state of knowledge, or both and ultimately fail to be obvious to a person skilled in the relevant field.

Consequently, it follows from the definitions above that nothing that already exists or can be learned may be patented.

It is crucial to take note of Section 3(d), which forbids the granting of patents to any derivatives derived from recognized substances, with the caveat that these derivatives must demonstrate ‘enhanced efficacy’. Following the 2005 modification, the innovation for which a patent claim has been filed must, according to Section 3(d), be more effective than the ‘known substance’ from which the newly claimed invention was developed.

The appellants, in this case, believed that ‘Imatinib Free Base’, which is to be designated as the ‘known substance’, would be easier to demonstrate to have a higher level of efficacy than ‘Imatinib Mesylate’. The issue is that this would fall under the category of ‘known substance’ because it was earlier than the claimed invention and continued to exist before it was.

The Supreme Court made it clear that the phrase ‘efficacy’ exclusively encompassed ‘therapeutic efficacy’, rejecting Novartis’s contention for a broader meaning. It was made very apparent that not all positive or helpful qualities are significant, only those that have a direct relationship to efficacy—in the case of medicine, this is therapeutic efficacy.

Regarding the matter of bioavailability, it was stated that this refers to a medication’s capacity to dissolve in a patient’s bloodstream. It was determined that protection may be provided under Section 3(d) in the event that bioavailability increases by 30% and if it can be demonstrated that doing so would boost therapeutic effectiveness. The Court examined the claimed invention’s efficacy with a recognized chemical in order to confirm its therapeutic efficacy, and it concluded that the qualities did not qualify under Section (d) since they did not boost ‘therapeutic efficacy’.

This ruling is highly praised because it stops patented goods from becoming ever-greener, and Section 3(d) of the Patent Act of 1970 prohibits large pharmaceutical companies, like Novartis in this case, from obtaining a second patent by making slight modifications to previously known information or technology. In the end, Novartis was unable to demonstrate that, when compared to ‘Imatinib Mesylate’, the ‘Beta Crystalline form of Imatinib Mesylate’ had greater therapeutic effectiveness.

Significance of Novartis A.G. v. Union of India 

The ruling by the Supreme Court is a major comfort to many who cannot afford the life-saving medications produced by these powerful pharmaceutical companies. By obtaining patents over their medications, these corporations, who have already gained billions of dollars, put the lives of the impoverished at risk by preventing people from buying the pharmaceuticals at a low cost. It is impossible to dispute the significance of patents in preventing new inventions, as long as they are made reasonably accessible to everybody. On the other hand, by gaining a stranglehold on their medications, businesses like Novartis are endangering the lives of these underprivileged individuals.

Nonetheless, the Supreme Court’s ruling made it quite evident that India is a growing nation and that one billion people’s access to affordable medications is essential. Thus, the Supreme Court’s decision to forbid the liberal approach to patent awarding and to limit patent issuance to only legitimate inventions, as opposed to frivolous inventions, was warranted.

The Supreme Court ruled unequivocally that, given India’s status as a developing nation, cheap access to medications is necessary to preserve lives and uphold the rights of billions of people. The honourable court further held that when granting patents, a fair and liberal approach must be taken.

Conclusion

The Novartis case, which puts the pharmaceutical business inside the purview of patent law establishes a significant precedent for access to medications. The ruling rendered by the Supreme Court potentially acted as a template for other developing nations when it comes to interpreting and implementing the Trade-related Aspects of Intellectual Property Rights Agreement in the future. This case demonstrates how India is upholding its international commitments with regard to intellectual property laws while making sure that local requirements are met by interpreting its legal duties in a manner that is appropriate for the needs and preferences of the country. The verdict benefits India’s indigenous industries while also prioritizing social fairness above business interests. 

Frequently Asked Questions (FAQs) 

What is a patent? 

Section 2(1)(m) defines the term “patent” and states that it is a patent granted for any invention under the Indian Patent Act, 1970.

Thus, the word patent is not defined under the Act, though what can be patented and what cannot be patented have been specified under the Patent Act. A patent, in common parlance, is a grant from the government that confers on the grantee for a limited period of time (in 20 years) the exclusive privilege of making, selling, and using the invention for which a patent has been granted. It is a contract between society as a whole and the individual inventor. Patent rights are granted only to new inventions which are capable of industrial application.

What are patentability standards? 

To be eligible for a patent, an invention needs to be “new” in the legal sense. An invention lacks the required originality to be patented if it may be predicted from the prior art, which is determined by domestic laws and case law.

In the Indian system, how long is a patent valid? 

Every awarded patent has a 20-year term starting on the day the application was filed. The term of a patent, however, will be 20 years from the international filing date granted under the Patent Cooperation Treaty for applications filed under the national phase of the treaty.

Does global protection come with Indian patents? 

No, patent protection is only applicable inside the borders of India because it is a territorial right. The idea of a worldwide patent does not exist. Nevertheless, if an application is filed in India, the applicant will have twelve months from the date of filing to file a matching application for the same invention in convention nations or under the Patent Cooperation Treaty. Every nation where the applicant needs to safeguard his innovation should grant patents. 

What qualifies for patentability? 

A patent can be applied for an invention that involves an innovative step, is fresh to the market, and has potential industrial applications. Nevertheless, it must not be among the innovations covered by Sections 3 and 4 of the Act that are not patentable.

What is the could-would test? 

The could-would test is a test to determine whether a patented invention is obvious or not. It is necessary to find out whether a person working on a particular problem would have reached the solution and not whether that solution could have been reached. Therefore, it must be very obvious, and it must live within the track in such a way that it must be the most natural suggestion that someone is working on that problem, and that is when a solution is considered to be obvious under patent law.

What is objective indicia for non-obviousness? 

Objective indicia for non-obviousness is a method through which the courts have tried to avoid hindsight bias by developing some objective criteria for non-obviousness. It helps counter the subjective nature of non-obviousness inquiry.

Some examples of such objectives are – 

  • where there was a long felt need for a solution to the problem,
  • The cost spent in arriving at that solution, etc.

What is the seminal case?

Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries (1978) is infamously known as the seminal case. The Supreme Court dealt with the concept of obviousness in this case and laid down a test regarding the same. The court said, “Whether the alleged discovery lies so much out of the track of what was known before as not naturally to suggest itself to a person thinking on the subject, it must be the obvious or natural suggestion of what was previously known.”

What is the evergreening of patents?

Organisations adopt the strategy of “evergreening,” also referred to as “secondary patenting,” to keep generic competition out of their market. Evergreening of patents is the process of obtaining further patents on modifications to the original drug, such as new forms, new dosages, new releases, or new combinations. This will help the domestic generic medicine market grow and millions of people who cannot afford the costly modified drugs.

References

RELATED ARTICLESMORE FROM AUTHOR

LEAVE A REPLY

Please enter your comment!
Please enter your name here