Update on Novartis v. CPAA case before the Madras High Court

[Guest guest]

Dear friends,

Beginning today, a division bench in the Madras High Court will begin hearing arguments on a series of writ petitions filed by Swiss pharmaceutical multinational Novartis AG and its Indian subsidiary, Novartis India against the Indian government, the Cancer Patients Aid Association (CPAA), and four Indian generic manufacturers: Natco, Cipla, Hetero, and Ranbaxy. The writ petitions challenge the decision of the Patent Controller to refuse to grant Novartis a patent relating to the anticancer drug, imatinib mesylate, as well as the validity of a key provision in the Indian Patents Act that provided one of several grounds for rejecting the patent application.

Due to the keen interest both domestically and internationally on this case, the Lawyers Collective HIV/AIDS Unit, representing the CPAA in these matters, will provide the general public with daily updates on the progress of the case. The reports will be factual updates without any comments as that is not permissible under Indian law relating to contempt. This initial posting will provide a brief factual and legal background leading up to the case.

In 1997 Novartis AG, the Swiss Company filed a patent application in the Chennai (Madras) Patent Controller's office for the B-crystalline of Imatinib Mesylate, brand name Glivec (Gleevec) on the ground that they invented the beta crystalline salt form (imatinib mesylate) of the free base, imatinib.

The patent application was kept in the mail-box and not opened until 2005 as the TRIPS Agreement permitted developing countries to introduce product patent protection from 1 January 2005. In March 2005, with retrospective effect from 1 January 2005, the Indian Parliament enacted the patent law to protect product patent protection. A significant and important provision was introduced to prevent every greening and granting of frivolous patents, section 3 (d).

In the meantime Novartis had got the Exclusive Marketing Rights (EMR) for marketing Gleevec in the Indian market and on that basis got orders preventing some of the generic manufacturers from generic equivalents of Gleevec. Novartis was selling Gleevec at USD 2666 per patient per year. Generic companies were selling their generic versions at USD 177 to 266 per patient per month.

In 2005, the CPAA and the other generic companies filed a pre-grant opposition against Novartis' patent application for imatinib mesylate, claiming, among other things, that Novartis' alleged " invention " lacked novelty, was obvious to a person skilled in the art, and that it was merely a " new form " of a " known substance " that did not enhance the substance's efficacy, and was thus not patentable under section 3(d) of the Patents Act. These arguments were based on the fact that Novartis had already been granted a patent in 1993 for the active molecule, imatinib, and that the present application only concerned a specific crystalline form of the salt form of that compound.

The CPAA and the generic companies contended that the 1993 patent effectively disclosed both the free base, imatinib, and the acid-addition salt, imatinib mesylate. Further, the CPAA and generic companies argued that different crystalline forms of imatinib mesylate did not differ in properties with respect to efficacy, and thus the various forms of imatinib mesylate must be considered the " same substance " under section 3(d) of the Patents Act.

In January 2006, the Patent Controller in Chennai, in a landmark decision, refused to grant Novartis a patent, agreeing with the contentions of the CPAA and generic companies that the subject application lacked novelty, was obvious, and was unpatentable under section 3(d) of the Act.

The patent rejection meant that generic companies could manufacture and market their drug, both in India and abroad, who make available the generic imatinib mesylate priced at less than one-tenth the price that Novartis was charging (USD 166 to 266 instead of 2666 per person per month).

However, in May 2006, Novartis filed the current writ petitions pending before the Madras High Court, claiming that the Patent Controller erred in rejecting its patent application, and further claiming that section 3(d) was, among other things, vague, ambiguous, and contrary to the requirements of TRIPS.

In the challenge to the Patent Controller's order, Novartis has argued that the Patent Controller refused to give weight to the fact that the patent for imatinib mesylate had been granted in 35 other countries, that the Patent Controller disregarded the case law (from mostly foreign jurisdictions) placed before him, and that an in-house laboratory test performed by Novartis scientists on rats to show an alleged 30% increase in bioavailability between imatinib and imatinib mesylate was sufficient to meet the " enhanced efficacy " standard under section 3(d).

The CPAA and the generic companies responded by claiming that the determinations of the other countries' patent offices had no bearing in India, both due to differing standards for patentability and the independence of patent validity under article 4bis of the Paris Convention. They further argued that India is not bound to follow the liberal patentability criteria in effect in many other countries, and is free to set more rigorous standards for patentability. They have argued that Novartis has failed to discharge its burden of showing that the beta-crystalline form of imatinib mesylate differs significantly in efficacy from other known forms of imatinib mesylate.

In the challenge to section 3(d), Novartis has argued that this provision is not in compliance with the TRIPS agreement and that it is in violation with the government's (non-enforceable) constitutional duty to harmonise its domestic laws with its international obligations. Further, Novartis has argued that the use of the term " efficacy " in section 3(d) is vague and ambiguous, and therefore unconstitutional. Recognising the fact that the TRIPS agreement is non-self executing and provides no private right of enforcement (unlike the rights created under Chapter 11 of NAFTA and many subsequent FTAs), Novartis has advanced a somewhat novel claim that while it is open for the Indian Parliament to repudiate its international obligations altogether, it is somehow invalid and unconstitutional for Parliament to otherwise comply with TRIPS except for one particular provision.

The CPAA and the generic companies have argued that it is not open to private companies or the Indian courts to decide whether the Indian Patent law is TRIPS compliant or not. They have further argued that it is not violation of any of the fundamental rights of the Indian Constitution and was passed by a competent legislature, the only two grounds for striking down a statute in India, and therefore not open to challenge. They have also argued that 3(d) is clear and not vague and in full compliance with TRIPS.

Whether Novartis succeeds in these challenges is likely to be determined in the coming days. We will keep you posted.

In solidarity,

From Chennai

Lawyers Collective HIV/AIDS Unit Team

Anand Grover

Chan Park

Prafulla