Intellectual Property Rights

Submitted by: Nishin Shrikhande

Roll no: 46.
F.Y. 3year LLB. Course.
Symbiosis Law School, Pune.

On
22nd August, 2016.
Under the guidance of
Prof. Amol Sapatnekar
Professor, Intellectual Property Rights
Symbiosis Law School, Pune.
Topic: Article Analysis of Evolution of the Indian Patent Act and the present position: Through the
Prism of the Novartis Case by -By Dr. Shobhalata Udapudi and Mr. Fakkiresh Sakkarnaikar

INDEX

1. WHAT IS THE THEME OF THE ARTICLE...3

2. COMMENTS ON THE DECISION OF THE CASE4-5
3. ISSUES & REGULATIONS6
4. ANALYSIS.7-9
5. CONCLUSION..10
6. BIBLIOGRAPHY..11

WHAT IS THE THEME OF THE ARTICLE

The article, Evolution of the Indian Patent Act and the present position: Through the Prism of the Novartis
Case talks about the development and the molding of the Indian Patent Act of 1970 in India post the
independence. It also stresses on the importance of the accessibility of medicines to each and every person
in the country and also lays importance on the right to health of each and every individual. The article also
deals with the analysis of the landmark case of Novartis Vs. Union of India 1, which mainly deals with the
patent claim made by Novartis on their cancer-curing drug called Gleevec.
The article also talks about the progression and development of the Indian Patents Act of 1970, which
replaced the Patents and Designs Act of 1911 along with a lot of various other amendments. It also talks
about the development of Intellectual Property Rights in India who was one of the main founding
members of the General Agreements on Tariff and Trade (GATT), which had to be followed under the
guidelines and criterion of the Trade-Related Aspects of Intellectual Property Rights (TRIPS). Whilst
discussing the exclusive marketing rights of pharmaceutical and agricultural products, the article has also
mentioned about a case known as the Indian Mailbox Case 2, which were two cases that were helpful in
setting a precedent for the amendment of the Indian Patents Act of 1970.
The key issues of the Indian Mailbox case were
i.

a. India's mailbox rule under which patent applications for pharmaceutical and agricultural

ii.

chemical products could be filed; and

The mechanism for granting exclusive marketing rights to such products.

The article describes section 3(d) of the Indian Patents Act, which represents patentability as a concept
being separate from invention which went through a lot of changes and amendments before
incorporating them finally in the year 2005. The authors also mention that these amendments of the Indian
Patent Act were applied to the Novartis Case and the judgment was based specifically on section 3(d) of
the Act.
Thus, to sum it all up the articles main theme revolves around the timeline and the chronological
framework of the Indian Patents Act along with the statutes laid down by the GATT as well as the TRIPS
and how this development has had an impact on the decision taken in the Novartis Vs. Union of India case
along with the appeal which was made in that case.

1 Novartis v. Union of India, AIR 2013 SCC

2 India Patent Protection for Pharmaceutical and Agricultural Chemical Products
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COMMENT ON THE DECISION OF THE CASE

Novartis is one of the worlds leading pharmaceutical company, which has been involved in the
manufacturing of many drugs, and hence it has a huge name in the medical world. In the year 1998, it filed
a patent application for its new version of cancer drug known as Glivec or Gleevec. The foundation of this
drug was a composition of the base of Imatinib Mesylate (IM) which was at the time a new invention by
Dr. Zimmerman in April/May 1993 in a salted crystalline form known as IM Alfa which was patented in
the following years, however on further research the patentee was able to make it into a further crystallised
form which helped in enhancing certain properties of the drug namely IM Beta and then claimed for it to
be an invention and filed for its patenting by Novartis on July 17, 1998 in the Chennai Patent Office.
The Patent grant was rejected on certain claims made by the opposition that were challenged under the
provisions of the Patents Act, 1970 the respondents in this case being leading pharmaceutical companies
filed for a lawsuit in the Madras High Court, the high court of Madras lacking adequate jurisdiction
regarding the argument u/a 27 of the Trade Related Aspects of Intellectual Property Rights(TRIPS), that
amounted to enhancement in the known efficacy was not defined in the Act, which subsequently gave
discretionary powers to the Patent controller which the appellants suggested that might be abused by
rejecting said patent application on the grounds that there was no invention and the lawsuit ultimately
became a landmark trial in the honourable Supreme Court of India as it challenged the envelope of the
Patents Act,1970. The case hinged on Section 3(d) of the Indian Patents Act which does not allow patents
of new version of known drug molecules if they make it more effective than before.
In the meantime, many Indian companies produced generic drugs at very cheap rate which was consumed
by over 3,00,000 people in the country. On the other hand Glivec only managed to get used by 16000
people. The judgement lay down by the Honourable Supreme Court of Indian in the case of Novartis v.
Union of India & Ors., in light of what the counsels found the bench stated that the beta crystalline form of
Imatinib Mesylate, fails both the tests of invention and patentability as was provided under clauses (J),
(ja) of section 2(1) and Section 3(d)3, the appeals of Novartis AG fail and were dismissed with cost.
It hence needs to be noted that mere modification of a drug does not give the drug novelty and also
repatenting a drug falls under the purview of evergreening which is prohibited in the Indian Patent Act. It
was indeed a correct and a justified decision by the Supreme Court of our country when it ordered that
Novartis will not be allowed to patent their drug. The reason why this case is termed as an important
landmark judgement is because this judgement reinforced the fact that getting a patent in our country isnt
3 Supra note5
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an easy job and there needs to be something extraordinary which will help people as well as help in
boosting the economy of the country to a great extent. It raises the bar for companies trying to patent any
of their products in the country.
As stated above and according to statistics, Indians prefer the generic version of glivec because it is easily
available as well as it is not expensive at all hence it is affordable to all classes of people be it a middle
class man or an upper middle class man. This is very cruicial because in a country like ours with the
worlds second highest population, we need to make sure that the right to a good health is given to most of
the citizens and hence in order to enforce this, the affordability of medicines needs to be of a very high
priority. As the decision also picked the health of the people it also paved a clear path to establish and
secure human rightsby complying the right to health through its judgement. If Novartis was given the
patent, the accessibility as well as affordability of the drug would have severely reduced and hence
affected a lot of people.
It was also a very poor marketing strategy by Novartis as they did not consider the fact about why would
people prefer their drug over a generic drug which is already present in the market and serving its purpose
to a lot of people in the country. A pack of 30 tablets cost close to 75000 INR, while the generic version of
Glivec, with a pack of 120 tablets costs close to 65000 INR. This reduces the affordability rate of the drug
by the people.
Thus, this decision was a crucial one for our country because it helped in lifting the bar and standards for
patenting in our country as well as was one of cases where the judges laid a huge amount of importance of
human rights, mainly the right to health and gave its decision by preferring the generic version which was
serving the same purpose over a new one. Novartis guaranteed to perform a lot of philanthropic initiatives
wherein they would provide the drug for free, but this did not help the Supreme Court in giving its
decision.

IRAC ANALYSIS

ISSUES

a. Whether the invention is in consistent with section 3(d) of the Indian Patents Act, 1970?

b. Whether Glivec is a patentable product?

c. Whether the invention qualifies for the test of novelty and inventive for the alleged product?

REGULATIONS

i.

Section 3 (d), Patents Act, 1970 mainly deals with inventions that are not patentable due to
mere discovery or enhancement in the known efficacy.

ii.

Section 2 (j) (ja), the Patents Act, 1970 deals with the definition of an invention, its
patentability criteria in terms of novelty and economic applicability.

ANALYSIS
ISSUE 1:
Section 3(d) of the Indian Patents Act, 1970 states that 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 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 Supreme Court laid down an approach that actually contended Novartis AG (the appellant) use of
Imatinib Mesylate (IM) and its salt crystalline form IM Alfa which was used by Novartis and other
pharmaceutical companies for the production of their cancer medication. When Novartis AG changed the
formulation of the aforementioned IM Alfa and filed a patent for the theoretical invention of IM Beta
which they claimed to be patented because it had better flow and thermo stability. This was a breakthrough
on their part as in laymans terms it was more soluble, easier to process and had better process ability of
the methanesulfonic acid addition salt of a compound of formula I.
The court held that Section 3(d) did not violate Article 14 of the Constitution of India and was not vague
or arbitrary, and did not confer uncontrolled discretion to the Patent Controller. The court rejected
Novartiss arguments that Section 3(d), which denies patents to new uses of known substances unless the
patentee can show enhancement of the known efficacy or differing significantly in properties with
regard to efficacy, was ambiguous and unclear. While these two phrases are not explicitly defined, the
court held that it was common practice for the legislature to use general language and leave the courts to
interpret the language based on the context and facts of each case. Moreover, the court held that Novartis
was a sophisticated party who had the technological expertise to comprehend the enhanced efficacy
requirement.4 The court also rejected Novartiss argument that Section 3(d) was arbitrarily enacted. 5
Novartis argued that the actual amended Section 3(d) was not the same as the one originally proposed to
the Parliament, which made no mention of an efficacy requirement, and was substituted in the current form

4 (The writ petitioner is not a novice to the pharmacology field but it, being
pharmaceutical giant in the whole of the world, cannot plead that they do not know
what is meant by enhancement of a known efficacy and they cannot snow [sic] that
the derivatives differ significantly in properties with regard to efficacy.)
5 Before TRIPS most developing had not established a patent procedure on
pharmaceutical inventions, surprisingly, many industrialized countries excluded
pharmaceutical products from patentability in early phases of their development.
Pharmaceutical patents were first authorized in Japan in 1976, Switzerland in 1977
and Italy in 1978, and were unavailable in Finland, Greece, Iceland, Monaco, Norway,
Portugal and Spain as late as 1988.
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of Section 3(d) without explanation.6 The court held that Section 3(d) was not arbitrarily enacted, referring
to the parliamentary debates leading to the 2005 Amendment.161 The debates revealed that there was
widespread fear that the earlier proposed amendments would deny Indian citizens of access to affordable
medicines and open up the possibility of ever greening. Thus, the court found that the legislature did not
arbitrarily enact Section 3(d) in its final form.
Finally, the court held that Section 3(d) did not confer unlimited discretionary power to the Patent
Controller and was not discriminatory. The court emphasized that discretionary power did not necessarily
mean that it would be discriminatory. The Patent Controllers discretionary power under Section 3(d) in
deciding whether a known substance has enhanced efficacy did not automatically lead to an arbitrary
exercise of discretionary power or discrimination against Novartis. Furthermore, the court opined that the
judiciary should be more deferential to the legislature in the field of economic regulation.

ISSUE 2:
Glivec as a drug, was already present in the market before Novartis AG applied for a patent for their form
of Glivec. This was a generic drug which was available everywhere and since it was inexpensive, the
demand for it was high. However, Novartis AG decided to seek a patent on a slightly altered version
potentially giving it a longer period of market exclusivity. The reason for this is that Novartis claimed in
their initial patent application for IM Beta that the enhanced discovery had:
i.
ii.
iii.

More beneficial flow properties.

Better thermodynamic stability and
Lower hygroscopicity than the prior IM Alpha.

This gave rise to the issue of evergreening in patent law. Evergreening refers to a variety of legal, business
and technological strategies by which producers extend their patents over products that are about to expire,
in order to retain royalties from them, by either taking out new patents (for example over associated
delivery systems, or new pharmaceutical mixtures), or by buying out, or frustrating competitors, for longer
periods of time than would normally be permissible under the law. Evergreening is not a formal concept of
patent law; it is best understood as a social idea used to refer to the myriad ways in which pharmaceutical
patent owners use the law and related regulatory processes to extend their high rent-earning intellectual
property rights particularly over highly profitable (either in total sales volume or price per unit)
"blockbuster" drugs.
Thus, it needs to be understood that mere modification of the product does not give novelty to the new
product and it also does not increase the effect of the output of the new drug compared to the already
6 Id.
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exisiting drug. If, Novartis AG is given the right to patent its drug, it becomes a case of re-patenting and
lies within the purview of evergreening as discussed above and evergreening is prohibited in the Indian
Patents Act of 1970. This is the case because a drug under the same name is being sold in the market at a
cheaper rate and is being utilized by the people.
Hence, although Novartis AG tried to claim a patent based on a variety of changes, which they are
bringing to the drug, Glivec was already present in the market, thus making it a non-patentable product on
the grounds of evergreening.

ISSUE 3:
The Indian government introduced Section 3(d) to prevent multinational pharmaceutical companies from
extending the life of a patent. Because pharmaceutical inventions rarely relate to new chemical entities or
novel active ingredients that have never before been available for therapeutic use, pharmaceutical
companies often prolong patent protection by obtaining separate patents on multiple attributes of a single
product.7
This Part will describe how Section 3(d) regulates the granting of pharmaceutical product patents by
limiting the scope of protection available for derivatives and new uses of a known substance.
Section 3(d) essentially codifies distinct patentability criteria for pharmaceutical and chemical substances
to prevent patents on trivial modifications of known substances.
This Part argues that because other countries have taken more indirect routes to achieve similar objectives,
Section 3(d) is not a radical departure from international practices.
Novartis contended that the physio-chemical properties of the polymorph form of the imatinib mesylate,
i.e. better flow properties, better thermodynamic stability and lower hygroscopicity, resulted in improved
efficacy and hence is patentable under Indian law. But unfortunately clashing with the concept of
evergreening being not in purview of the Indian Patents Act, did not provide Novartis AG the patent since
a cheaper and a generic version of the drug was already present in the market.

7 These attributes include processes of manufacture, formulations, systems of

delivery, new uses and different chemical forms of a known product such as salts,
isomers, metabolites and polymorphic forms
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CONCLUSION
The Supreme Court held that the true intention to enact section 3(d) was to prevent the concept of
evergreening or a renewal of a kind 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, a great acre and caution needs to be taken so as to protect the right to life of the masses.
This judgement is also helpful for the government to take quick steps to increase the accessibility of
generic drugs and this case helps in paving the way for the government to improve the accessibility of the
already exisiting drug in the market. Thus this can help in the distribution of the drug to every nook and
corner of the entire country. This case thus meets the human rights to the highest ends as it chose the right
to health of people over granting a patent to an expensive drug which would have had a very low rate of
accessibility as well as affordability.
Novartis tried to obtain a monopoly in the market by introducing an expensive drug and claiming that it
had better properties than the already existing drug in the market. Cancer is a very serious disease and the
cure for it should be available to a large number of public and not only to those people who can afford
expensive drugs and hence rejecting the patent claim made by Novartis was indeed a correct and a justified
decision by the Supreme Court of our country.
This case hence also helped in raising the bar and the standards to obtain a patent in our country and
proved that filing a patent isnt an easy job and the invention and the patent needs to be of such a nature
that it is good for the general public and inturn helps the country with its progress and development. The
Supreme Court is thus justified in its decision thereby prohibiting the generous approach in granting
patents and granting patents only to genuine inventions as against frivolous inventions. This case is thus a
landmark judgement and it has also helped other companies filing for patents to be more careful and much
more innovative before they file a patent for their products.

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BIBLIOGRAPHY

BOOKS:
1. Intellectual Property Law by P Narayanan. Third Edition.
2. Law relating to Intellectual Prorperty Rights. Fourth Edition. M.K. Bhandari

WEBSITES:
1.
2.
3.
4.
5.

www.manupatra.com
www.wto.org
www.bizandlegis.com
www.lexisnexis.com
www.heinonline.org

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