Novartis update for 27 March 2007

[Guest guest]

Novartis update for 27 March 2007

The Novartis matter resumed today. Basha continued with his argument that 3(d)

did not provide any guidelines and was therefore arbitrary. He cited judgments

to show that where Parliament does not provide guidelines the act can be voided

as arbitrary under Art. 14 of the Constitution.

He argued that the decision as to whether there was a significant enhancement in

efficacy was left entirely up to the patent controller, and that if the Patent

Controller decided in a particular case, it would adversely affect the consumer

groups who would not have all the necessary knowledge to challenge the order. He

insisted that there should be guidelines either specified by law or by a

notification issued by the government or by subordinate legislation.

At this point, J. Balasubramaniam asked how it would be possible for the

legislature to determine what enhanced efficacy would be in all situations.

Therefore, the law gave the discretion to the patent controller, and if the

patent controller made an error, this could be corrected by the appellate

courts.

J. Sridevan added that fixing a certain standard for all drugs would result in

inequality, as different standard would apply to different drugs.

Basha then again argued that the flexibilities in the Doha Declaration pertained

only to compulsory licensing, and did not contemplate or allow 3(d).

VT Gopalan, the Additional Solicitor General appearing for the Government of

India and the Patent Controller, introduced caselaw to support his argument that

the Court was the final arbiter to determine Parliament's intent. He argued that

the Court could take into consideration all relevant circumstances in

determining the objectives of the legislation.

He then requested that the Court take note of the international community to

section 3d. In this vein, he read aloud certain portions of Congressman Waxman's

letter to Novartis discussing the importance of sec. 3(d) in making drugs

accessible and affordable, and of the " chilling effect " of Novartis's challenge

in encouraging other member states from introducing public health safeguards

into their laws. He also introduced the letter from the Members of the European

Parliament to support these arguments. He then concluded

that this view of the international community reiterated the fact that

patentability standards were meant to be member specific, and that 3(d) was in

compliance with TRIPS.

He then addressed the issue of Novartis' claim that 3(d) conferred excessive

delegation of powers. He argued that the trend in recent times was not to

invalidate the delegation of the discretionary power itself, but to challenge

the improper exercise of that discretionary power in individual cases. He added

that because the function of the Patent Controller was quasi-judicial, in which

all parties were given an opportunity to be heard and avenues for appeal

existed, these provided sufficient safeguards against the exercise of an abuse

of these discretionary powers.

He cited further judgments to support the claim that not all grants of

discretionary power is not discriminatory, and that there is no presumption that

even where wide powers are granted it will be abused.

He then cited further caselaw supporting the primacy of domestic legislation

over international treaty obligations.

At this point, J. Sridevan interjected and said that the primacy of domestic law

was no longer in doubt. She asked, given that Novartis claims that section 3(d)

is not TRIPS compliant, and that the respondents claim that 3(d) is TRIPS

compliant, could the Court express its views on this matter?

Gopalan replied that the Court should not look into the issue at all, and in his

view, the matter was not justiciable.

J. Balasubramaniam asked at this point what his response was to Novartis'

contention that efficacy could not be made a patentability standard because

efficacy was determined during clinical trials. Gopalan replied that he would

address this issue during the appeals phase.

Then, Lakshmikumaran, apprearing for Ranbaxy and Hetero, began his argument by

claiming that paragraph 5 of the Doha Declaration was not exhaustive of the

flexibilities discussed in paragraph 4. He noted the language in paragraph 4

discussing the right of members to protect public health, as well as the

language in paragraph 5 that discussed flexibilities as including, but not

limited to, compulsory licensing. He argued that this

language gave member states extra elbow room in taking measures to protect

public health, in whatever form.

Lakshmikumaran then responded to Bhushan's argument yesterday about the fact

that if patents did not exist, then there would be no research, no medicines,

and thus people would die. He pointed out that there in fact was no product

patent protection in India until 2005, and yet new drugs were being developed.

Bhushan then clarified that his hypothetical concerned a situation in which no

product protection existed anywhere.

Lakshmikumaran then pointed out that 3(d) was a valid exercise of the

flexibilities available under TRIPS. In response to Bhushan's arguments that Art

27 of TRIPS provided an exhaustive list of exclusions, he read out section 3(a)

which disallows the patenting of frivolous applications, and the latter part of

section 3(d), which excludes new use, neither of which are expressly provided

for in Art. 27. He then argued that section 3(d) only clarified when a patent

application became frivolous in line with the basic

patentability criteria. He explained that section 3(d) was necessary to stop

ever greening, and explained how companies could subsequently patent frivolous

modifications to extend patent protection.

He argued that this was a case in which Novartis claimed not to understand the

concepts of efficacy and significant enhancement of efficacy, and therefore

wanted the law struck down. However, he claimed that Novartis was refusing to

understand the meaning of efficacy, but that in Europe, Novartis fully

understood these concepts and used them to gain marketing approval for many

drugs.

He then argued that the language from the European Directive was actually

borrowed from pre-existing judge-made law in Europe that had become codifed. He

showed how Novartis was actually party to the case in which these concepts were

litigated to show that Novartis had full understanding of what efficacy meant.

The case in which Novartis was involved concerned a " critical dose drug, " in

which a slight overdose could prove fatal and a slight underdose could prove

ineffective. He used this example to show how the concepts of " efficacy " and

" significance " could vary from drug to drug, and how Novartis itself was aware

of this fact.

He reiterated that the appropriate forum for determining TRIPS compliance was

before the DSU, and that any such pronouncement by the Court would only result

in embarrassment.

Responding to J. Balasubramaniam's earlier question to Gopalan about whether it

made sense to require a showing of efficacy at the patentability stage,

Lakshmikumaran argued that this was routinely done by patent applicants. He

explained that the industrial application requirement imposed a duty upon

applicants to show that any given molecule it wanted to patent could at least

potentially have some therapeutic efficacy. He claimed that clinical trials

would only confirm the substance's efficacy, and would prove the

safety of the drug. He pointed out that 3(d) excluded the word " safety " that was

included in the EC directive for precisely this reason. He argued that guidance

in legislation is required only when the terms are not known, but that the terms

used in 3(d) were well known to those skilled in the art.

Grover, appearing on behalf of the Cancer Patients Aid Association, began his

argument by asserting that Novartis, not being a party to the TRIPS agreement,

lacked standing and that the Court lacked jurisdiction to issue a declaration of

TRIPS compliance. He brought to the Court's attention cases he had cited earlier

to support the argument that in dualist nations, domestic courts had no role to

play if a country failed to abide by its international obligations, unless the

treaty expressly provided for private rights of enforcement.

He then reiterated his argument that Art. 27 was not exhaustive and pointed to

various provisions in section 3 of the act that were not expressly provided for

in 27.

He then pointed to authorities to show that TRIPS flexibilities extended to

setting stricter standards for patentability by defining the basic criteria of

patentability as it saw fit. He pointed to the CIPIH report, which approvingly

cited section 3(d) of the Act as a valid exercise of TRIPS

flexibilities to prevent evergreening. He then introduced Novartis' own slide

presentation on salt selection, in which Novartis acknowledged the usefulness of

subsequent patents on salts and polymorphs to extend patent protection.

He then distinguished the caselaw that Novartis had cited regarding excessive

delegation, and pointed out that none of these cases applied to the case at

hand, because none of the cases dealt with the validity of the grant of

quasi-judicial discretionary power. He argued that the inherent safeguards in

the grant of quasi-judicial power – i.e., fair hearing, reasoned decision, and

opportunity to appeal was sufficient to check the abuse of such powers.

He then argued that the explanation to section 3(d) actually provided the

further guidance to the patent controller in two ways: to show what new forms of

known substances are, and to explain that " significant enhancement of efficacy "

could be shown by a showing of a " significant difference in properties with

regard to efficacy. "

Bharat Raman, appearing for Natco, argued that Novartis, throughout the

prosecution of the application, had full knowledge of what was meant by efficacy

and enhancement of efficacy. He cited to Novartis' own replies to the patent

oppositions in which Novartis had argued that the beta-crystal form was a

significant enhancement over the free base. Raman argued that it was only

because Novartis had failed before the patent controller that they were now

claiming that they were ignorant of the meaning of these concepts.

He cited to further caselaw to show that it was precisely the duty of the Court

to give meaning to terms in legislation. In this vein, he compared section 3(d)

to a new born baby, and implored the Court to give it time to grow.

He further argued that there was nothing inappropriate in borrowing concepts

contained in one legislation for use in another body of law. He cited to the old

Patents Act, 1970, which borrowed the concept of " drug " from the Drugs and

Cosmetics Act.

Responding to Novartis' argument that its novelty could be possibly lost if it

were required to disclose test data to obtain a patent, Raman referred the

judges to section 30 of the Act. This provision protects communications made by

an applicant to the government in furtherance of an investigation of the

invention.

The matter was adjourned until tomorrow.

In solidarity,

Anand

Chan

Prafulla

e-mail: <george.julie@...>