Madras High Court dismissed Novartis challenge to Indian Patents Act, 1970

[Guest guest]

*MADRAS** HIGH COURT DISMISSES NOVARTIS' CHALLENGE TO THE INDIAN PATENT LAW*

6 August 2007

A division bench of the Madras High Court today dismissed a challenge to section

3(d) of the Indian Patents Act, 1970 filed by Swiss pharmaceutical multinational

Novartis AG and its Indian subsidiary, Novartis India. These petitions

challenged the validity of a key provision in the Indian law, which seeks to

prevent ever greening and which provided one of several grounds on which the

Patent Controller rejected Novartis AG's patent application for the

b-crystalline of Imatinib Mesylate, brand name Glivec (Gleevec).

In March 2005, with retrospective effect from 1 January 2005, the Indian

Parliament amended its 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 May 2006, Novartis filed writ petitions 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 the TRIPS Agreement.

In the challenge to section 3(d), Novartis 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. 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 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 Government of India, CPAA and the generic companies argued that neither

could private companies such as Novartis challenge a law as being TRIPS

non-compliant nor could an Indian court decide whether the Indian patent law is

TRIPS compliant or not. The appropriate forum, they argued, is the WTO Disputes

Settlement Body. Upholding this argument, the Madras High Court held that it

was not the proper forum to decide whether the Indian patent law was TRIPS

compliant or not.

The other ground of challenge raised by Novartis was that the use of the term

" efficacy " in section 3(d) is vague and ambiguous, and therefore violates the

equality provision (Article 14) of the Indian Constitution.

During the arguments, while conceding that the meaning of the term

" efficacy " is known, Novartis contended that because there was no clarity as to

what constituted " enhancement of efficacy " and " significant enhancement of

efficacy " as required by section 3(d), the law was vague and lent itself to

arbitrary decisions by the Patent Controller. The Government of India, CPAA and

generic companies argued that section 3(d) is not in violation the equality

provision of the Indian Constitution as the concept of efficacy is

well-known to persons in the pharmaceutical industry and it is impossible to lay

down a " one size fits all " standard to determine what constitutes a significant

enhancement of efficacy. Dismissing the petition, the Madras High Court held

that section 3(d) was not vague or arbitrary and therefore did not violate the

Indian Constitution.

The full text of the judgment will be made available shortly on our website

(www.lawyerscollective.org).

Novartis' challenge to the Patent Controller's decision, which was filed before

the Madras High Court, has been subsequently transferred to and is pending

before the Intellectual Property Appellate Board.

*Brief background of the Gleevec case*

In 1997, Novartis AG 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. In 2003, it was granted

Exclusive Marketing Rights (EMR) for marketing Gleevec in the Indian market. On

the basis of the EMR, Novartis AG obtained 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).

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