Thursday, April 4, 2013

Decision of the Supreme Court in the Novartis Case

[Vinita Sithapathy, who is a lawyer and a company secretary, has contributed the following post.

Vinita graduated from Government Law College, Mumbai in 2008. She has advised clients on banking and finance and corporate M&A transactions since 2008. She can be contacted at

Although the subject-matter of the post is beyond the usual scope of the Blog, the significance of the Supreme Court decision justifies its discussion.]

The judgment rendered by the Supreme Court earlier this week in the case of Novartis AG (“Novartis”) v. Union of India has been applauded as a landmark one that will help provide millions of people around the world access to cheaper medicines and prevent pharmaceutical giants from “evergreening” their patents. While no doubt the effect of the judgment will be to ensure the availability of affordable life saving drugs to people in India and elsewhere, the crux of the judgment lies in the fact that Novartis AG was denied a patent not on account of the pricing of its drugs or its profit motive but on the basis that the drug that it sought a patent for did not involve an invention that was patentable under Indian law. The Supreme Court in delivering its judgment delved deep into various issues including the history of patent law in India, legislative debates surrounding the now famed amendment to Section 3(d) of the Patents Act, 1970 (the “Patents Act”), development of the pharmaceutical market in India and the chemical composition and properties of the beta crystalline form of Imatinib Mesylate (marketed as Gleevec), the drug which was under consideration for the patent.

The Supreme Court decision was delivered on a special leave petition preferred by Novartis challenging the decision of the Intellectual Property Appellate Board, which held that the drug that Novartis sought a patent for was hit by Section 3(d) of the Patents Act (“Section 3(d)”) and therefore was not an invention which could be patented under Indian law. Section 3(d) provides:

“the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant” [is not an invention within the meaning of the Patents Act.]

Section 3(d) also contains an explanation stating that:

“For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

The original free base form of Imatinib Mesylate is Imatinib, which is patented in the US and the EU and is referred to as the Zimmermann patent. Imatinib in its free base form is used for producing Imatinib Mesylate, its pharmaceutically acceptable salt version. Imatinib Mesylate is further used for producing its beta crystalline form. Therefore, Novartis contended that in producing the beta crystalline form of Imatinib Mesylate, there were two inventions involved – each step of the process being a separate invention.

The Supreme Court considered the following questions:

(i)        Is Imatinib Mesylate, the salt version of the free base form of Imatinib, an invention that is patentable under Indian law?

(ii)       Is the beta crystalline version of Imatinib Mesylate an invention patentable under Indian law?

In answering the first question, the Supreme Court made the following observations:

(a)        The application for grant of the Zimmermann patent in the US specified that the invention related to Formula 1 (being derivatives of N-phenyl-2-pyrimidne-amine, one of which was Imatinib) and its compounds. The application further stated that the compounds of Formula 1 included their respective salts. The application also stated that the invention was in relation to the treatment of tumor in warm-blooded animals by administering a Formula 1 compound or its pharmaceutically acceptable salt to such animals.

(b)       The beta crystalline form of Imatinib Mesylate was later patented in the US in 2005. However, the drug Gleevec was launched in the market on the basis of the Zimmermann patent itself much before 2005. Novartis’ application before the Food and Drug Administration, USA stated that the active ingredient in the drug for treatment of patients suffering from Chronic Myeloid Leukamia was Imatinib Mesylate and that the Zimmermann patent covered this drug.

(c)        When Novartis applied for a patent for the beta crystalline form of Imatinib Mesylate in the US, the Board of Patent Appeals held that there was a presumption that the Zimmermann patent teaches a person skilled in the art, the manner of use of Imatinib or a pharmaceutically acceptable salt thereof in the treatment of tumors in warm blooded animals.

(d)       When Natco Pharma Limited marketed a drug called Veenat 100 in the UK, Novartis issued a legal notice against Natco pointing out that the active pharmaceutical ingredient of Veenat 100 was Imatinib Mesylate, which was covered by the Zimmermann patent in Europe.

Based on these observations the Supreme Court came to the conclusion that Imatinib Mesylate, the salt version of Imatinib in its free base form is covered under the Zimmermann patent and is a known substance from the Zimmermann patent.

To rebut this finding of the court, Novartis argued that the scope of coverage under a claim in a patent is different from and wider than what is disclosed under the patent in its specification. In other words according to Novartis, Imatinib Mesylate was covered under the Zimmermann patent and therefore out of bounds for production by any person other than Novartis, but since it was not disclosed under the Zimmermann patent, there was scope for it to be invented and consequently for it to be patented by Novartis in India. The Supreme Court held that such distinction if considered acceptable would invalidate the rationale of patent law. Patent laws allow monopoly to be granted to certain persons in respect of inventions for a specific period of time on the basis that the invention be disclosed and made available to the public for their benefit. The court held that covering undisclosed inventions under a patent would negate the fundamental rule underlying the grant of patent. The court also held that it does not wish Indian law to develop in a manner where there is a vast gap between coverage and disclosure under a patent.

On this basis the Supreme Court held that Imatinib Mesylate and its pharmacological properties are known from the Zimmermann patent itself and therefore it is not an invention that can be patented under Indian law.

The Supreme Court then went on to answer the second question and observed that the beta crystalline form of Imatinib Mesylate being a polymorph of Imatinib Mesylate is directly covered under Section 3(d). Novartis contended that Section 3(d) was inserted in the Patents Act in its present form out of abundant caution and any invention that meets the threshold of novelty and inventive step under Section 2(1) of the Patents Act cannot fall within the restrictions of Section 3(d). Here, the Supreme Court referred to the parliamentary debates in 2005 when Section 3(d) was amended and observed that Section 3(d) was amended to prevent abuse of product patents in medicines and agricultural products and to allay the fears of the opposition that product patents, especially in the pharmaceutical sector were capable of being abused by “evergreening”. The court observed that in its opinion, the amended Section 3(d) is meant to especially cover pharmaceutical products and is meant to set up a second tier of qualifying standards for patenting pharmaceutical products. This is a very strong observation by the Supreme Court and clearly all pharmaceutical patents need to satisfy the Section 3(d) test.

Novartis also argued that a “conceivable” substance is not necessarily a “known” substance as required under Section 3(d) and that “known” meant well established and proven beyond doubt. Novartis further argued that neither Imatinib nor Imatinib Mesylate had any “known” efficacy in that sense and therefore the question of enhanced efficacy of the beta crystalline form of Imatinib Mesylate did not arise. The Supreme Court however rejected this submission and held that even the term “publicly known” although it may warrant a wider interpretation than “known” was, in fact, interpreted more narrowly than the construction submitted by Novartis. On this basis, the Supreme Court held that the beta crystalline form of Imatinib Mesylate is a form of a known substance (i.e. Imatinib Mesylate) with known efficacy.

On the question of whether the beta crystalline version had enhanced efficacy as compared to that of the salt version of Imatinib Mesylate, the Supreme Court observed that all the material on record compared the beta crystalline version of Imatinib Mesylate to the free base form of Imatinib. There was nothing on record to compare the beta crystalline version with the intermediate salt version. The Supreme Court also held that enhanced “efficacy” of a medicine should be determined by taking into account its “therapeutic efficacy”. The Supreme Court further held that better flow, thermodynamic stability and lower hygroscopicity, while beneficial do not determine efficacy of a medicine. On the basis that there was no evidence to prove that the beta crystalline form of Imatinib Mesylate provided enhanced therapeutic efficacy over Imatinib in its free base form, the court held that the beta crystalline version failed the Section 3(d) test.

The Supreme Court came to this conclusion after a detailed analysis of the facts and circumstances of this case. The court went on to specify that this case should not be interpreted to mean that Section 3(d) bars all incremental inventions. Keeping that in mind, it is unfair to criticize this decision as a loss for innovation. If anything this decision is a sign of strength and indicates that our judiciary is empowered to see through any attempt at “evergreening” existing patents and is capable of recognizing a genuine invention from a masked one. The Court in fact went ahead to note that the marketed package of “Gleevec” specified that the drug contained Imatinib Mesylate in its salt form and not in the beta crystalline form. Therefore, it observed that the patent claim appeared to be a camouflaged attempt to obtain a patent for Imatinib Mesylate, the salt form, which was not otherwise possible under Indian law.

- Vinita Sithapathy


rohit chhabra said...

Nice and very informative - Rohit Chhabra

Anonymous said...

the analysis especially in the last three paras is not satisfactory. No would realise that on reading the analysis from other sources and the main text.

Anyways but a good attempt