Home » Case Note » Analysis of the Supreme Court’s Novartis Judgement

Analysis of the Supreme Court’s Novartis Judgement

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A. Introduction

The Supreme Court in a recent landmark decision has rejected a patent application made by the drug manufacturer, Novartis AG (“Novatis“) in relation to its cancer cure drug Gilvec. This decision is a significant development in India’s nascent patent regime. This brief note analyses the implications of the judgment.

B.  Brief History of the Novartis Case

On 17 July 1998, Novartis filed an application before the Patent Office, Chennai for grant of patent on the beta crystalline form of Imatinib Mesylate (“Drug“), which is used for the treatment of leukemia. On 25 January 2006, the Assistant Controller of Patents and Designs passed an order rejecting the patent claim filed by Novartis on the grounds that the invention claimed by Novartis was obvious, anticipated and that the grant of patent on the Drug is not permitted under Section 3(d) of the Patents Act, 1970 (“Patents Act“). Against this order, Novartis filed an appeal in the Madras High Court, which was later transferred to the Intellectual Property Appellate Board (“IPAB“). The appeal was rejected by the IPAB on 26 June 2009. Aggrieved by the rejection of grant of patent on the Drug, Novartis approached the Supreme Court. The Supreme Court in its judgment dated 1 April 2013 (“Judgment“) has upheld the rejection of Novartis’ patent claim on the Drug.

 C. Analysis Of The Judgment

In terms of the Patents Act, for a new product or process to qualify as an “invention”, the following criteria must be met:

(i)       it must be new;

(ii)      it must involve an inventive step, i.e. a feature of the product/process;

(A)     involves a technical advancement as compared to the existing knowledge; and/ or

(B)     has economic significance;

and that makes the product/process non-obvious to a person skilled in the art;

(iii)     it must be capable of industrial use.

Further, for an invention to be patentable, it must not fall under the categories set out in Section 3 and 4 of the Patents Act. The main issue facing the Supreme Court was whether the Drug stands the test of patentability as specified in Section 3 (d) of the Patents Act, the relevant potion of which reads as follows:

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.”

Section 3(d) of the Patents Act was inserted through amendments made to the Patents Act in 2005, at the time when India was making its intellectual property regime compliant with the Agreement on Trade Related Aspects of Intellectual Property Rights. The basis for including such provisions in the Patents Act was to avoid ‘evergreening’ – a term given to the practice of extending the patent life of a drug by making incremental and minor changes to an existing drug.

The Supreme Court held that, the term “efficacy” in Section 3(d) meant “the ability to produce a desired or intended result”. Therefore, the test of efficacy in the context of section 3(d) would depend upon the result, the function or the utility that the product under consideration is desired or intended to produce. Consequently, the court concluded that in the case of a medicine that claims to cure a disease, the test of efficacy could only be “therapeutic efficacy”, i.e. the capacity of the drug for beneficial change.

The court further held that a mere change of form with properties inherent to that form would not qualify as an enhancement of the efficacy of a known substance.

Thereafter, the court concluded that the physiological properties of the Drug, i.e., more beneficial flow properties, better thermodynamic stability and lower hygroscopicity do not result in enhancement of “therapeutic efficacy”. Further, on Novartis’s claim that increase in bioavailability results in enhancement of therapeutic efficacy from the known substance, the Supreme Court held that the same will need to be collaborated with necessary data and research in each case and as Novartis did not submit any material to demonstrate this, the Drug fails to satisfy the test laid down in section 3(d) of the Patent Act.

It must be noted that the rejection of Novartis’ patent claim over the Drug does not impact the patentability of incremental chemical and pharmaceutical substances. The Supreme Court has clearly stated that Section 3(d) does not bar patent protection for all incremental inventions of chemical and pharmaceutical substances, leaving the question of patentability of such substances to be determined on a case-to-case basis. Therefore, in interpreting cases under Section 3(d), courts in India will now look into the ability of the product to materially improve upon an existing result.

D. Conclusion

The Judgment has largely been welcomed as it has paved the way to increased accessibility of the Drug in India at reasonable prices. However, in spite of the fact that the Judgment clarifies that it must not be construed as a ban on patent protection to all incremental inventions of chemical and pharmaceutical substances, the pharmaceutical industry has signalled that the Judgment may have an adverse impact on investments in drug research and development in India.

However, this apprehension may be misplaced. The Judgment upholds and affirms the “product patent” regime and actually protects genuine innovators. What the Judgment has considered as not patentable are minor tweaks to a patent that is about to expire in order to cloak it in the garb of a “new product”. The Indian law therefore appears to have been interpreted in consonance with international standards, i.e. protection of an innovative new product as opposed to a minor change to the product. The Judgment is narrow in scope and therefore provides a clear expectation to companies in terms of objectively identifying the standards on which drug research should be based in order for a new drug to be afforded protection under the Indian patent regime. What the Judgment does not do is base its logic and reasoning solely on the availability of the Drug at a reasonable cost. The reasoning is firmly based in strict legal interpretation and the certainty and lack of subjectivity that such an interpretation provides ought to be welcomed.



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