Novartis court hearing - an update from Chennai - 16.02.07

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The Madras High Court, before Justices Mr Balasubramaniam, and Ms Prabha Sridevan, continued hearing the Novartis matter today. Mr Soli Sorabjee, former Attorney General of India, appeared for Novartis AG in the petition challenging the constitutionality of section 3(d).

Mr. Sorabjee began his argument by referring to Articles 1 and 27 of the TRIPS agreement, and pointed out that there was a binding obligation on India to introduce a law in accordance with Art 27 of the TRIPS agreement, which requires member states to provide patent protection for all inventions, provided that they are new, inventive and capable of industrial application. (See bottom of e-mail for the text of the written submission he presented to the Court in connection with his argument)

He then traced the legislative history of the 2005 amendment to the Indian Patents Act, and referred to the Statement of Objects and Reasons (SoR) of the amendment, and emphasised that the SoR explicitly acknowledged the obligation that India had to introduce a TRIPS compliant law. From this, he argued that India had a conscious obligation to introduce a TRIPS compliant law.

He then pointed out that in prior versions of Section 3(d) before the passing of the Patent Amendment Act, the clause " a new form of a known substance which does not result in the enhancement of the known efficacy of that substance " was not in the original ordinance. He contended that that this portion, as well as the corresponding explanation, were unique to India and did not find a place in any patent law in the world. This, in conjunction with the fact the provision was introduced by Parliament at the last minute indicated that it was in violation of Article 27 of TRIPS and irrational.

It was his contention that section 3(d) restricted patents to new chemical entities. In this context, he referred to the Mashelkar Committee report, which concluded that it would be a violation of TRIPS if the patenting of pharmaceutical products were restricted to new chemical entities. He also argued that implicitly, the Mashelkar Committee actually held that Section 3(d) was also not in compliance with the TRIPS agreement.

At this stage, J. Sridevan interjected, stating that the Mashelkar Committee did not say anything relevant on the matter, as the term " new chemical entity " occurs nowhere in the Patents Act. She also pointed out that it appeared that Section 3(d) merely explained the term " new " in article 27 of TRIPS and allows patents to be granted to new forms if they are more efficacious.

Mr. Sorabjee replied that to the extent the explanation to Section 3(d) deemed derivatives of known substances to be the same substance, it prevented the grant of patents to substances that otherwise meet the requirements of novelty, inventive step and industrial application.

Mr. Sorabjee then argued that " efficacy " was not a term used in patent laws of other countries, that it was not defined and that it was vague. He argued that the term " significant " was also vague, and no standard for determining significance was set out in the law. He claimed that both these expressions, " significantly " and " efficacy " conferred upon on the patent controller unguided power, rendering it arbitrary.

Mr. Shanti Bhushan, also appearing for Novartis, argued that the Court did have jurisdiction to declare a provision of a statute as incompatible with an international treaty or an agreement, relying on a U.K. judgment from the House of Lords in Equal Opportunities Commission v. Secretary of State.

Mr. Bhushan also argued that the issue at stake was whether innovative research should be encouraged or inhibited. He seriously contended that if the logic of Section 3(d) was accepted, then nothing would be patentable because everything ultimately was a combination of known elements such as carbon, hydrogen, oxygen and nitrogen.

After Novartis finished their arguments with respect to Section 3(d), the parties moved on to the issue of whether it was appropriate to convert Novartis' writ petition challenging the Patent Examiner's decision into an appeal. Mr. Bhushan assured the Court that Novartis would not be adding any new grounds or introducing new facts if the conversion was allowed. The respondents opposed the application by Novartis AG to convert their writ petition challenging the patent controller's order into an appeal.

The Court then adjourned until Thursday, 22 February. Beginning then, the issue of conversion will be fully argued and decided, and the respondents will be given the opportunity to respond the Novartis' arguments regarding Section 3(d).

We will resume our updates when the hearing resumes.

From Chennai,

Lawyers Collective HIV/AIDS Unit Team

Anand

Chan

Prafulla

Below is the text from the written submission submitted by Mr. Sorabjee during his argument:

Propositions of Mr.Soli Sorabjee, Sr. Advocate, on behalf of the Petitioner

1) Section 3(d) as amended is in clear breach of Article 27 of TRIPS

2) Legislation in breach of India s accepted international obligations and which would invite retaliatory action under the WTO and lead to erosion of India credibility in the international field suffers from the vice of irrationality and arbitrariness and is violative of art. 14.

3) Alternatively, section 3 (d) is violative of art. 14 because the concept of " enhancement of the known efficacy " is totally vague and undefined.

4) The explanation insofar as it creates a fiction whereby derivatives of known substances are deemed or considered to be the same substance even though factually they may constitute a different substance, is absolutely irrational and arbitrary.

5) The expression " unless they differ significantly in properties in regard to efficacy " is vague and nebulous. The explanation does not afford any guidance as to what constitutes significant difference in properties. No guidelines are statutorily laid down for the exercise of power of rejection of a patent application on the ground mentioned in sec 3 (d).