Novartis AG v. Union of India and Others, SLP (Civil) Nos. 20539–20549 of 2009

In this case, which is presently before the Supreme Court of India, Novartis AG (Novartis) challenges the order of the Intellectual Property Appellate Board (IPAB) rejecting its patent application for Gleevec (beta crystalline form of imatinib mesylate), an anti-cancer drug used to treat chronic myeloid leukemia.

The outcome of this case will affect not only the patenting of this particular anti-cancer drug, but will also determine the position in India on patenting of new forms of already known substances. Novartis has challenged the IPAB’s interpretation of section 3(d) of India’s patent law and its application to Novartis’ patent application for the beta-crystalline form of an already known substance, imatinib mesylate.

Section 3(d) of the Indian Patents Act, 1970 is the public health safeguard in the Indian patent law that, amongst others, disallows patenting of new forms of known substances, unless the new form exhibits a significant enhancement in efficacy. It is one of the safeguards introduced by Parliament of India in 2005 to prevent evergreening. Evergreening is the practice of pharmaceutical companies to obtain patents on frivolous or minor changes to known drugs and thereby establish or extend their monopoly over a drug.

Background Note

In 1997, Novartis AG, a pharmaceutical company based in Switzerland, filed a patent application in the Chennai (Madras) Patent Controller’s office for the beta-crystalline of imatinib mesylate, brand name Gleevec (Glivec) claiming that it invented the beta-crystalline form of imatinib mesylate, a salt of the free base, imatinib.

Novartis’ patent application was kept in the mail-box and not examined until 2005 as the TRIPS Agreement permitted developing countries such as India that did not provide product patent protection to pharmaceuticals and agrochemicals to introduce such product patent protection from 1 January 2005.

In the meantime, Novartis obtained Exclusive Marketing Rights (EMR) for marketing Gleevec in India. On the basis of this, it obtained orders from the Madras High Court preventing some of the Indian generic manufacturers from manufacturing and selling generic versions of the medicine. At that time, Novartis was selling Gleevec in India at USD 2666 per patient per month. Generic companies were selling their generic versions in India at USD 177 to 266 per patient per month.

In 2005, India amended its patent law to comply with its obligations under the TRIPS Agreement to provide process and product patent protection in all fields of technology, including pharmaceuticals and agrochemicals. Cognisant of patenting practices, Parliament introduced a significant and important provision to prevent evergreening— section 3(d).

After the 2005 amendment to the patent law, Cancer Patients Aid Association (CPAA) and several generic companies filed pre-grant oppositions 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). These arguments were based on the fact that Novartis had already been granted a patent in 1993 in the United States and other jurisdictions for the active molecule, imatinib, and that the present application only concerned a specific crystalline form of the salt form of that compound.

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, 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).

[Downloads: Novartis’ Patent Specification, CPAA’s pre-grant opposition, Novartis’ reply statement and CPAA’s rejoinder.]

Novartis’ patent application rejected by Patent Controller [January 2006]

In January 2006, the Patent Controller in Chennai, in a series of landmark orders, refused to grant Novartis a patent, agreeing, amongst others, with the contentions of the CPAA and generic companies that the subject of the application lacked novelty, was obvious, and was not patentable under section 3(d).

[Downloads: Order of the Patent Controller in the oppositions filed by CPAA, Cipla Ltd, Hetero Drugs Ltd, Natco Pharma Ltd and Ranbaxy Laboratories Ltd]

The patent rejection meant that generic companies could manufacture and market their generic versions of the drug, both in India and abroad, and make available the generic imatinib mesylate priced at less than one-tenth of Novartis’ price.

In June 2006, Novartis AG and its Indian subsidiary, Novartis India, filed a series of writ petitions against the Government of India, CPAA, and four Indian generic manufacturers (Natco, Cipla, Hetero, and Ranbaxy), before the Madras High Court. These writ petitions challenged the decision of the Patent Controller to refuse to grant Novartis a patent for the beta-crystalline form of its anticancer drug, imatinib mesylate, as well as the validity of section 3(d) that provided one of several grounds for rejecting its patent application.

[Downloads: Writ Petition Nos. 24759 of 2006 and 24760 of 2006 were filed by Novartis AG and Novartis India respectively challenging the validity of section 3(d). Writ Petition No. 24754 of 2006 was filed by Novartis AG against CPAA and Union of India, challenging the decision of the Patent Controller on merits in CPAA’s pre-grant opposition. Writ Petition Nos. 24755 of 2006 to 24758 of 2006 were filed by Novartis AG challenging the decisions of the Patent Controller in the other pre-grant oppositions.]

Over a period of time, the writ petitions challenging the decision of the Patent Controller were converted into statutory appeals. In April 2007, the Government of India notified the IPAB as the body to hear appeals relating to patents. Consequently, Novartis’ appeals were transferred to the IPAB, a specialist tribunal on matters relating to intellectual property.

Constitutional validity of section 3(d) upheld by Madras High Court [August 2007]

Meanwhile, in August 2007, the Madras High Court issued its judgment rejecting Novartis’ writ petitions challenging the validity of section 3(d). The Madras High Court refused to examine whether section 3(d) was in compliance with the TRIPS Agreement.

Novartis’ primary contention in its challenge to the constitutional validity of section 3(d) 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 Constitution of India.

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 of the equality provision of the Constitution of India 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. It held that the term “efficacy” was known in the pharmaceutical field to mean “therapeutic efficacy”.

While dismissing Novartis’ writ petitions, the Madras High Court held: “We have borne in mind the object which the Amending Act wanted to achieve namely, to prevent evergreening; to provide easy access to the citizens of this country to life saving drugs and to discharge their Constitutional obligation of providing good health care to it’s citizens.”

Neither Novartis AG nor Novartis India challenged the judgment of the Madras High Court upholding the constitutional validity of section 3(d).

Appeal on merits rejected on the ground of section 3(d) alone [June 2009]

The next round of litigation then commenced before the IPAB

After a series of litigation in which Novartis contested the constitution of the IPAB, Novartis’ appeals challenging the Patent Controller’s orders were finally heard by a specially constituted Bench of the IPAB, comprising Justice Negi (Chairperson) and Dr PC Chakraborty (Technical Member) in November and December 2008.

In its order issued in June 2009, the IPAB overturned the Patent Controller’s findings on novelty and inventive step and held that the beta-crystalline form of imatinib mesylate was new and involved an inventive step.

However, the IPAB held that Novartis’ alleged invention did not satisfy the test of section 3(d) in as much as Novartis did not provide data to show that the beta-crystalline form of imatinib mesylate exhibited significantly enhanced therapeutic efficacy over imatinib mesylate, the known substance.

Primarily on the basis of this finding, the IPAB rejected Novartis’ appeal and refused to grant it a patent for the beta-crystalline form of imatinib mesylate.

Proceedings before the Supreme Court

Challenging the IPAB’s order, Novartis approached the Supreme Court directly by filing a special leave petition challenging the IPAB’s interpretation and application of section 3(d) to its patent application. Subsequently, Natco Pharma and CPAA filed cross-petitions challenging the IPAB’s findings on other issues including novelty and inventive step.

Hearing Updates

Due to the keen interest, both domestically and internationally on this case, Lawyers Collective HIV/AIDS Unit, representing CPAA in these matters, will provide daily updates on the progress of the case. The reports will be factual updates and will not contain any comments as it is impermissible under the Indian law relating to contempt of court.

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