This Case Commentary is written by Deepanshi, a Third-Year Law Student of Indian Institute of Management Rohtak

Author: Deepanshi

Case Details:

Court- Supreme Court

Citation- 13 S.C.R. 148

Bench- Aftab Alam, Ranjana Prakash Desai

Decided on- 1 April 2013

Parties:-

Appellant- Novartis AG

Respondent- Union of India

Introduction

Novartis AG v. Union of India, 2013 marks an important legal precedent upon the annals of patent law in the country concerning pharmaceutical patents. The controversy went on regarding patentability by Novartis on a drug-manufactured beta crystalline form of the anti-cancer drug Imatinib Mesylate or, rather put it colloquially, Glivec. This case captured the world's attention because it involved the precarious balance between intellectual property protections and public health matters. The commentary shall try to present an in-depth analysis of the facts, legal issues, judgment, and implications of the case.

Case Facts

The history of this case dates to 1992 when Novartis submitted a patent application for Imatinib in the United States. Imatinib is an anti-cancer drug synthesized by the Swiss researcher Jürg Zimmermann to treat chronic myeloid leukemia (CML). This compound, available as a free base, showed distinct anti-tumor activity and was patented in some regions, among which were the US and Europe.

Novartis then developed the beta crystalline formulation of Imatinib Mesylate which provided an even better stability and fluidity profile. The beta crystalline formulation was a variation of the original salt form, Imatinib Mesylate, and was alleged to be more bioavailable in the human system and easier to orally absorb. In 1998, it had garnered the patent in India and formed the core of the contention that the litigation would soon revolve around.

In 2006, the Indian Patent Office refused to grant a patent on grounds that the beta crystalline form had failed to show "a substantial improvement in efficacy" from the known Imatinib Mesylate, mandated by Section 3(d) of the Indian Patents Act, 1970. The Novartis appealed the case before the Intellectual Property Appellate Board (IPAB), which also rejected the appeal. Then finally, the case was carried before the Supreme Court of India.

Legal Issues

The central legal questions this case had revolved around the interpretation and application of Section 3(d) of the Indian Patents Act, 1970. Specifically, under consideration before the Court were the following:

1. Whether the beta crystalline form of Imatinib Mesylate was a novel invention in the terms of Section 2(1)(j) and (ja) of the Patents Act.

2. Whether this version of the drug itself a formulation that met the "enhanced efficacy" requirement under Section 3(d)?

3. Was Section 3(d), which bars patents on incremental innovation in drugs, well within the purview of Indian law and compliant with the requirements of the TRIPS Agreement.

Novartis Submissions

Novartis argued that the beta crystalline form of Imatinib Mesylate was an invention having patentability. The company argued that improvement presented by the beta crystalline form in its improved flow properties and lower hygroscopicity, greater bioavailability. According to Novartis, these properties made it significantly different from the parent Imatinib Mesylate. These properties, according to Novartis, constituted improvements in activity and, hence were satisfied under Section 3(d).

Novartis argued that Section 3(d) of the Indian Patents Act violates Article 14 of the Indian Constitution, as it treats equals unequally and holds that equals can be treated alike by allowing the compound to be amended whenever required. Besides this, Novartis further submitted that India's patent law violates the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, to which India is a signatory.

Counter argument

Novartis opposed this patent by raising the argument that the beta crystalline form did not provide any added benefits of therapeutics over the parent drug, Imatinib Mesylate. Even though this version may have shown better bioavailability, it was no comparison to enhanced therapeutic activity. It was essentially claimed that Novartis was resorting to "evergreening," a process under which a company makes minor changes in an already available drug to extend its rights under the patent.

Furthermore, CPAA and Indian generic drug manufacturers also claimed that the award of the patent to Novartis will further limit access to lifesaving medicines not just in India but also in other developing countries that depend on affordable generics.

Judgment

On April 1, 2013, the India Supreme Court delivered a unanimous verdict and rejected Novartis' application for the patent. The Court ruled that though the beta crystalline form of Imatinib Mesylate was a new variant of a known compound it did not satisfy the criteria of "enhanced efficacy" provided in Section 3(d) of the Patents Act. According to the Court, "efficacy" in the said terms refers only to "therapeutic efficacy" rather than an improvement in physical and chemical properties like bioavailability and stability.

The court held that Novartis had failed to explain meaningfully how the beta crystalline form offered any significant improvement in the therapeutic benefit in comparison to the parent Imatinib Mesylate. It considered mere evidence of increased bioavailability as insufficient for crossing over the Section 3(d) test.

The Court reiterated once again the constitutionality of Section 3(d) and held it in conformity with the obligation of India under the TRIPS Agreement. It has emphasized that Section 3(d) had been enacted to avoid the mischief of evergreening and to balance between giving encouragement to genuine innovation and making available drugs at affordable prices.

The rationale behind the Judgment

The Supreme Court relied upon the interpretation of "efficacy" as defined in Section 3(d) of the Patents Act. However greater bioavailability increases the absorption of a drug in the body, and again, that does not guarantee a superior therapeutic effect. Therapeutic efficacy, as the Court might define it, is the effectiveness with which a drug treats or even cures a disease. Novartis did not convincingly present evidence that beta crystalline Imatinib Mesylate has any sort of therapeutic benefits not provided by the alpha form.

In any event, the Court has further condemned Novartis as having tried to enhance its patent monopoly by seeking a minor variation of an existing compound as a discovery. It reiterated that the very purpose of Section 3(d) is to discourage such practices and ensure patents are granted only for true innovations, which can benefit patients with real usability.

Impact of the Verdict

The decision had far-reaching implications in not only the drug industry but public health in developing nations as well. It further entrenched India's status as a vital source of cheap generic drugs and made it an epithet as "the pharmacy of the world." The Court's decision to reject Novartis' patent claim allowed manufacturers of generic drugs to continue producing cheap versions of Glivec, thereby allowing thousands of patients afflicted by cancer across the world to receive life-saving treatment.

The judgment also gave a clear and hard message to the global pharmaceutical companies that India's patent policy is strict about incremental innovation. Though the judgment did not altogether close the door for patents on incremental innovations, it raised the bar by compelling the production of sufficient evidence of "enhanced efficacy" in cases where essential medicines were involved.

Conclusion

The Novartis AG v. Union of India case is a judgment that puts in the record books one of the most significant findings this world has been witnessing for patent law and pharmaceutical patents. This case throws light on the fine balance between innovation support and public access to medicines. This is a very important mechanism through which the Supreme Court could impede the practices of evergreening while making low-cost drugs available for use, particularly in developing nations. The judgment further seals the principle that patents must be granted only for innovative improvements that genuinely bring value to society rather than being used as cosmetic changes in physical appearance.

It remains a benchmark in patent law internationally, even in the discussions of India, for intellectual property, public health, and the rights of developing countries over the cheap supply of medicines.

Case Referred: Novartis AG v. Union of India, (2013) 6 SCC 1

Available at: https://main.sci.gov.in/jonew/judis/40212.pdf