This case primarily revolves around the interpretation and application of section 3(d) of the Patents Act, 1970, in relation to the patentability of a beta crystalline form of Imatinib Mesylate, a drug used to treat chronic myeloid leukemia. The Supreme Court of India had to decide whether this new crystalline form of the drug met the necessary requirements for patentability under Indian patent law, particularly in light of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement.

• Background:
  • Novartis AG, a pharmaceutical company, filed an application for a patent for the beta crystalline form of Imatinib Mesylate in 1998.
  • The drug, marketed under the names Glivec and Gleevec, is an important cancer treatment.
  • India's patent regime underwent significant reforms in 2005, including the introduction of Section 3(d), which aimed to prevent "evergreening" of patents in the pharmaceutical industry.
  • Section 3(d) disallows patents for minor modifications of known substances unless they show enhanced efficacy.
     
• Novartis AG's Patent Application:
  • Novartis AG sought a patent for a new form of Imatinib Mesylate, claiming that the beta crystalline form exhibited superior stability, better processability, and lower hygroscopicity compared to the alpha crystalline form.
  • The application, filed in 1998, was rejected by the Indian Patent Office under Section 3(d).
  • The rejection was based on the finding that the change was a mere modification of an existing substance with no substantial increase in efficacy.
     
• Historical Development of Patent Law:
  • The Supreme Court of India provided a detailed account of the evolution of patent law in India, particularly in the pharmaceutical sector.
  • This analysis was crucial to understanding the legislative intent behind the Patents Act, 1970, and its amendments, especially Section 3(d).
     
• Pre-Independence Era – Patents and Designs Act, 1911:
  • During British rule, India's patent regime was governed by the Patents and Designs Act, 1911.
  • This law allowed both product and process patents, including in pharmaceuticals and chemicals.
  • The system was criticized for benefiting foreign entities, stifling innovation, and making medicines expensive and inaccessible.
  • The Indian pharmaceutical industry remained underdeveloped, with domestic entities struggling to compete with multinational corporations (MNCs).
     
• Post-Independence Review of Patent Law:
  • After Independence, the government recognized the need for a patent regime tailored to India's socio-economic conditions.

Tek Chand Committee (1949-1950):
The government constituted a committee under Justice (Dr.) Bakshi Tek Chand to review the 1911 Act.Findings: The patent law failed to stimulate indigenous innovation. Patents for food, medicines, and surgical devices should ensure affordability and availability to the public. Recommendations included limiting abuse of patent rights, introducing compulsory licensing, and revoking patents that were not adequately exploited in India. Result: Based on these recommendations, the 1911 Act was amended in 1950 and 1952 to introduce compulsory licensing provisions for food and medicines.

Justice N. Rajagopala Ayyangar Committee (1957-1959):
A second committee, headed by Justice N. Rajagopala Ayyangar, conducted a comprehensive review of the patent system.Findings: The 1911 Act primarily benefited foreign entities and did not encourage domestic research or industrial development. A large majority of patents in India were held by foreigners, often without significant economic or technological benefits for India.

Recommendations: Retain process patents but exclude product patents for food, medicines, and chemicals to make essential products affordable and accessible. Introduce strict working requirements to prevent abuse of patents. Create a patent law aligned with India's developmental needs. Result: These recommendations became the basis for the Patents Act, 1970.

Patents Act, 1970:Enacted to replace the 1911 Act, the Patents Act, 1970 was a landmark reform that redefined India's patent regime.

• Exclusion of Product Patents: Section 5 explicitly barred product patents for food, medicines, and chemicals. Only process patents were allowed, ensuring that generic manufacturers could produce affordable versions of drugs using alternate methods.
• Compulsory Licensing: Strengthened provisions to prevent monopoly abuse and ensure public access to essential products.
• Shortened Patent Duration: The term for process patents in pharmaceuticals and food was reduced to five years from the date of sealing or seven years from the date of filing, whichever was earlier.
• Impact: This law catalyzed the growth of India's domestic pharmaceutical industry, enabling Indian companies to develop affordable generic medicines. By the 1990s, Indian pharmaceutical firms accounted for a significant share of the domestic market and emerged as global leaders in generic drug production.

TRIPS Agreement and its Impact:

• India became a founding member of the World Trade Organization (WTO) in 1995, which included obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
• TRIPS Requirements:
  • Mandated the introduction of product patents in all fields, including pharmaceuticals, by 2005.
  • Required provisions for patent protection of at least 20 years from the filing date.

India's Transitional Arrangements:

• India used the transitional period allowed under TRIPS (1995–2005) to delay the implementation of product patents for pharmaceuticals and agricultural chemicals.
• During this period, India amended the Patents Act thrice:
  • 1999 Amendment: Introduced the "mailbox system" for filing product patent applications.
  • 2002 Amendment: Enhanced intellectual property rights protection to align with TRIPS.
  • 2005 Amendment: Reintroduced product patents in pharmaceuticals and agricultural chemicals but incorporated safeguards like Section 3(d).

Introduction of Section 3(d):

• Section 3(d) was introduced in the 2005 Amendment to prevent "evergreening" of patents.
• Purpose:
  • To ensure that patents are granted only for genuine innovations that demonstrate enhanced efficacy, not for minor modifications of existing drugs.
  • To balance the TRIPS obligations with India's need to ensure access to affordable medicines.
• The Supreme Court emphasized that Section 3(d) embodies the Indian legislature's conscious decision to adopt a higher threshold of patentability, particularly for pharmaceuticals.

Effect of the 1970 Act and Subsequent Developments:

• The Supreme Court noted the remarkable growth of the Indian pharmaceutical industry due to the 1970 Act.
• Statistics Highlighted:
  • The market share of Indian companies rose from 30% in 1970 to over 75% by 2005.
  • India became known as the "pharmacy of the world," exporting affordable generic medicines globally.
• The Supreme Court traced the evolution of India's patent law to underscore the unique socio-economic context in which these laws were framed.

Procedural Background:

• Application at the Controller of Patents:
  • Patent Application: Novartis AG filed Patent Application No. 1602/MAS/1998 on July 17, 1998, seeking protection for the beta crystalline form of Imatinib Mesylate.
  • Grounds for Opposition: The application faced five pre-grant oppositions filed under Section 25(1) of the Patents Act, 1970.
  • Decision of the Controller (January 25, 2006):
    • The Assistant Controller of Patents rejected the application based on lack of novelty and inventive step.
    • Invalidity of the priority date claimed (July 18, 1997).
• Writ Petitions in the Madras High Court: Novartis AG filed five writ petitions challenging the Assistant Controller's decision and the constitutional validity of Section 3(d).
• Transfer to the Intellectual Property Appellate Board (IPAB): The writ petitions were transferred to the IPAB for adjudication.
• Appeals before the Intellectual Property Appellate Board (IPAB):
  • The IPAB reversed the Controller's findings on novelty and inventive step but upheld the rejection based on Section 3(d).
• Special Leave Petitions (SLPs) before the Supreme Court:
  • Novartis AG directly approached the Supreme Court under Article 136 of the Constitution.

Issues Raised:

• Whether the beta crystalline form of Imatinib Mesylate qualifies as a new invention under Section 2(1)(j) and (ja) of the Patents Act?
• Whether Section 3(d) applies to this case?

Submissions of Parties:

• Novartis AG: Argued that the beta crystalline form was a novel and non-obvious invention and challenged Section 3(d).
• Union of India & Respondents: Contended that granting the patent would lead to monopolistic pricing and make the drug unaffordable.

Provisions of Law Discussed:

• Section 2(1)(j) and (ja): Definitions of "invention" and "inventive step."
• Section 3(d): Prohibition on patents for minor modifications unless they show enhanced efficacy.

Key Elements of the Test for Enhanced Efficacy:

• Therapeutic efficacy is the benchmark.
• Comparison with the known substance is required.
• Physical properties alone are insufficient.
• Objective and quantifiable evidence is required.

Decision:
The Supreme Court dismissed Novartis AG's appeals and upheld the rejection of the patent application for the beta crystalline form of Imatinib Mesylate. The Court ruled that the invention did not meet the standards of patentability under Indian law, particularly section 3(d), and affirmed the importance of ensuring that patent laws do not hinder access to essential medicines.

Concluding Note:
The case highlights the tension between intellectual property rights and public health concerns in the context of patent law. It underscores the importance of ensuring that patent regimes, while promoting innovation, do not impede access to life-saving medicines, particularly in developing countries like India. The judgment reinforces India's approach to preventing evergreening in the pharmaceutical industry, thereby safeguarding public health while honoring international obligations under TRIPS.

Case Title: Novartis AG vs Union of India & Ors.
Date of Order: April 1, 2013
Case No.: Civil Appeal Nos. 2706-2716 of 2013
Neutral Citation: AIR 2013 SUPREME COURT 1311
Name of Court: Supreme Court of India
Name of Judge: Aftab Alam, J.

Disclaimer:
The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539