Novartis Case Hearing Update - 22.2.07

[Guest guest]

Dear All,

As you may recall, the Novartis case was last heard by the Chennai High Court on

the 16th of February. Arguments in the matter resumed yesterday. Below is an

update from the Lawyers Collective HIV/AIDS Unit team on the hearing in the

Court yesterday. Stay tuned for the update on today's proceedings!

Kajal

___________________________________________

NOVARTIS CASE HEARING UPDATE - 22.2.07

The Novartis matter resumed today for further oral arguments. At the outset,

the Court indicated to the parties that they were inclined to convert the writ

petition into an appeal, on the condition that no new grounds are added in the

converted appeal. The CPAA and the generic companies agreed to this proposal,

but counsel for Novartis indicated that they would seek instruction from the

client.

Thereafter, the oral arguments by the government, the generic companies and the

CPAA on Section 3(d) began. Starting off was the Additional Solicitor General,

Mr. VT Gopalan, appearing for the Union of India and the Patent Controller.

Gopalan responded to two of Novartis’ claims: (1) that 3d was arbitrary and (2)

that 3d violated trips. He said that the amendment was not arbitrary and in

violation of Article 14 because the concepts of “efficacy” and “significant

efficacy” are well known and definite in the field. He pointed out that TRIPS

allowed flexibilities for member countries. He claimed that TRIPS allowed

countries to prevent the abuse of intellectual property rights, including

evergreening. He pointed to article 7, 8 and 27 as containing inherent

flexibilities.

On constitutional validity, he argued that it is a settled position in India

that Parliament cannot be forced to introduce a law. He further pointed out

that once a law is enacted by Parliament, courts are bound to administer the law

in accordance with the Constitution. There is no decision to the effect that law

in violation of an international treaty is void.

On constitutional validity of 3d in light of Article 14, he pointed out that

there are only two grounds available for challenging a statute in India: (1)

that the law violates the fundamental rights guaranteed in the constitution, or

(2) Parliament lacked the authority to enact the law in question. Given that

Novartis had failed to state either ground, it had no basis for bringing this

issue before the Court.

He then relied on the Statement of Objects and Reasons of the Patents Amendment

Act, observing that it mentioned the Doha Declaration. After explaining the

mandates of the Doha Declaration to the Court, he contended that the steps to be

taken to bring about changes in the patent law had to be member-specific in the

context of flexibilities permitted under the TRIPS Agreement.

Gopalan pointed out that the Patent Controller’s order denying Novartis a patent

on Glivec were based on other issues besides 3d, including lack of novelty and

obviousness. Simply because Novartis had not been granted a patent did not give

it a legal basis for challenging the statute. Even assuming that, in this

instance, the Patent Controller had arbitrarily applied section 3d, this only

provided Novartis with a basis for challenging the Patent Controller’s Order,

but not the statute itself.

Finally, he contended that the Parliamentary debates that Novartis introduced

showing that the legislation discussed the high costs of Glivec and the problem

of evergreening was not evidence of Parliament, in bad faith, specifically

targeting Novartis.

He also pointed out that the fact that there was such debate in Parliament

actually constituted evidence of a legitimate purpose – of Parliament heeding to

the will of the people in enacting 3d. As such, this was a perfectly legitimate

exercise. Rather than showing irrationality as contended by Novartis, this

indicated deliberate decision making in accordance with democratic procedures.

Mr Lakshmikumaran, counsel for Ranbaxy and Hetero, argued that the Court cannot

strike down a law on the ground that it violates an international treaty. He

showed that the settled law in India was that a treaty does not become law on

its own; it can only be used as an interpretive tool used in the case of

ambiguity. In the case of a direct conflict between domestic and international

law, the domestic law prevails. He distinguished the UK EOC v. Secretary of

State case that Novartis relied on, ((1994) 1 ER 910), to point out that the

issue there whether the Court’s jurisdiction to grant a declaration and nothing

more.

Addressing Novartis’ request for a declaration that section 3d was incompatible

with TRIPS, Lakshmikumaran asserted that if the Court did make such a

declaration, without granting any further relief, Novartis would use it as

ammunition to convince Switzerland to take India to the WTO Dispute Panel.

There, if the dispute panel ultimately decided that section 3d was in fact

compatible with TRIPS, it would have the effect of placing the Court in an

embarrassing situation in which it had been effectively overruled by a foreign

body. To avoid this embarrassing situation, he pleaded with the Court not to

engage in such a purely academic exercise.

He then pointed out that Novartis’s contention that concepts contained in

section 3d was unique to India was incorrect. He relied on the EU Directive

2001/83/EC, which contains language virtually identical to 3d in the context of

regulatory approval of generic drugs. He used this to point out that the

concept of efficacy was very well known in the field, and certainly very well

known to Novartis, which had made several applications for generic forms to be

marketed in the Eurpoean Union, and thus relied on the directive. He futher

pointed out that they had referred to efficacy in their own specification that

was rejected in India.

Lakshmikumaran then argued that there is no basis for claiming that simply

because “efficacy” is capable of more than one construction, it is rendered

arbirtrary. These are relative terms, but well understood by people skilled in

the relevant art. He claimed that Parliament deliberately left the term

undefined in order to cover the myriad of circumstances in which this concept

could be applied. He pointed out that in fact, introducing specific benchmarks

of significance or efficacy would in fact render the statute arbitrary.

Finally, he addressed the issue of the Mashelkar Committee report. He pointed

out that in view of the fact that the committee had withdrawn the report it may

not be necessary to go into the matter. Nevertheless, he argued that the terms

of reference were completely different from the issue of the validity of section

3d.

Mr Arvind Datar, counsel for Cipla, again raised the issue that international

treaties must be specifically incorporated into Indian law for it to have

domestic effect, and that once Parliament has spoken, the Courts must give

effect to it, regardless of any international law to the contrary. He asserted

that there is always a presumption of constitutionality, and the burden was on

Novartis to substantiate its claim. However, he pointed out that Novartis had

laid no foundation in its pleadings to make out its claim of arbitrariness.

Datar asserted that 3d complies with TRIPS and was in fact a “golden mean.”

Referring to varying practices of countries in allowing patenting of

discoveries, he argued that there was no universal yardstick of patentability.

He argued that though terms such as novelty and obviousness were not defined in

the patent law, they were not uncertain and such terms are incapable of being

precisely defined. He said that the construction of a patent was the duty of

the court. There could be no “one-glove fits all” policy and that the

determination of each application should be left to the Patent Controller, but

ultimately subject to appeal in the Courts.

Anand Grover, counsel for Cancer Patients Aid Association, reinforced the theory

that Novartis could not maintain its request for a declaration of TRIPS

non-compliance. He distinguished the EOC case on the ground that the UK had

specifically given domestic effect to the EEC Treaty and that the EEC Treaty

itself conferred rights on individuals to enforce its provision and for courts

of member countries to enforce them.

He distinguished the EEC Treaty from the TRIPS Agreement, which does not create

any rights in favour of individuals or confer any private right of enforcement

to individuals. Disputes, if any, have to be between member states as laid down

in the Dispute Settlement Understanding, which by its own terms is the exclusive

means of resolving disputes. The DSU, Art. 23 prohibits member countries from

unilaterally deciding whether the TRIPS Agreement has been complied with.

Grover then compared TRIPS to a prior multilateral treaty, NAFTA, which

specifically provides for individuals to enforce the terms of the treaty against

a state through arbitration. The drafters of the TRIPS Agreement were aware of

such private enforcement procedures but chose not to incorporate them into

TRIPS.

He then pointed out Articles 7 and 8 of the TRIPS Agreement as well as two

authoritative commentaries on TRIPS (by UNCTAD-ICTSD and WTO-WHO) to highlight

to the many inherent flexibilities contained in the TRIPS Agreement. He pointed

out that the concepts of novelty, inventive step and industrial application are

not defined and that countries are free to determine the means of implementing

these requirements, whether through legislative or judicial. He showed that

countries may wish to adopt stricter standards for patentability criteria to

prevent evergreening.

Anand Grover will continue his arguments tomorrow.

In solidarity,

The Lawyers Collective HIV/AIDS Unit team

Anand

Chan

Ramya

Kajal Bhardwaj

e-mail: <k0b0@...>