Indian Patent Law TRIPS Compliant: Novartis judgment shows the way – PEAH

While patients groups around the world have expressed joy over the Novartis decision of the Supreme Court of India, western Multi National Companies (MNCs) and their governments have expressed extreme displeasure over it. Some in the US have even urged their Administration to take India to the Dispute Panel under the WTO, as according to them, Indian patent law is not compliant. They have even found supporters in the business community in India. Unfortunately these kinds of criticisms reflect either ignorance at worst or poor understanding of the debate at the best. Worse still criticism appears to be motivated. So what is the Novartis case all about?

Indian Patent Law TRIPS Compliant: Novartis judgment shows the way

By Anand Grover*

Senior Advocate practicing in the Supreme Court of India and the Director of the Lawyers Collective HIV/AIDS Unit

Earlier, like a number of countries, India did not provide patent protection for products in the field of foods and medicines. This was because after India gained independence, it found that the medicines were mostly imported, they were amongst the highest priced in the world, the pharmaceutical industry in India was dominated foreign Multi National Companies, the Indian generic industry was practically non-existent. In response the Patent Act was amended and patent protection for products was removed and patent protection for processes was kept intact. The period for protection was limited to 7 years. In this India was simply following a number of other countries in Europe, notably Germany.

As a result of this apparently very minor change, the Indian generic industry flourished, competition increased, prices of medicines in India plummeted and became affordable. By 1988 India became a next exporter of drugs and by the middle of 1990s it was delivering over 90% of the Anti- Retrovirals for HIV in the developing world. These were safe efficacious quality drugs at affordable prices. India became the pharmacy of the developing world.

In the meantime under the pressure of western MNCs and their governments, which wanted that the world should have intellectual property (IPR) laws like the US, TRIPS Agreement was entered into. It was brought into force on 1 January 1995. Under the TRIPS Agreement, different countries, had to make their laws TRIPS compliant at different times. India had to finally comply with its TRIPS obligations by 1 January 2005.

Importantly, the western MNCs and their Governments did not get what they wanted in the TRIPS Agreement. The TRIPS Agreement only provides for the minimum standards and leaves the precise working to be left to the member countries. The TRIPS Agreement sets out only the mandatory minimum standards of IPR protection and enforcement measures that WTO member countries have to provide. Thus, in terms of patent law, the TRIPS Agreement mandates that member countries have to provide patent protection for products and processes for a period of twenty years, for products and process which are novel, not obvious and are industrially applicable. However it does not stipulate what is “new” or “inventive step”. These are known as flexibilities, which the developing countries were able to extract as a major concession. Thus they have the flexibility to define for themselves these terms in their patent laws.

When India had to finally comply with its TRIPS obligations by the 1st January 2005, that is it had to have protection for product and process patents for 20 years.

But there was a problem. It was noted that in the developed countries, US, Europe and Japan, patents were being granted not only for the New Molecular (or Chemical) Entities [NME or NCE] but also new forms of the same. For instance if a base of a compound is the NCE or NME, had been granted a patent, then even a salt or crystalline form of that compound was also being granted patents, even though it may not have any additional therapeutic benefit, provided of course it satisfied the criteria of novelty, inventive step and industrial applicability. In fact over 75% of the patented drugs were such forms of known substances.This allowed what is known as ever greening, patent term being extended for new forms without any real therapeutic benefit. This eliminated competition, extended monopolies, making drugs unaffordable and inaccessible, adversely impacting the Right to Health.

Addtionally the world had seen a crisis in the access to medicines over AIDS epidemic, when drugs were being sold at the rate of USD 10,000 per patient per annum, leaving huge populations to die. Because of the Indian generic competition, available at that time at USD 350 per patient per annum, it was possible to launch a huge global effort of providing ARVs across the world to the people who needed them, saving millions of lives. This had led the WTO, which oversees the TRIPS Agreement, to pass the famous DOHA Declaration, highlighting the member countries right and need to protect public health while implementing the TRIPS Agreement.

The Indian Parliament had a challenge. The challenge was to strike a balance to, on the one hand, comply with the obligations under the TRIPS Agreement and provide for patent protection for both product and processes for 20 years; and on the other hand substantially limit ever greening, promote generic competition and thereby protect the Right to Health. In so doing it enacted section 3(d) of the Indian Patents Act. Simply it states that a new form of a known substances would not be patented unless it has enhanced efficacy over the known substance. Section 3(d) is perfectly compliant with TRIPS when one takes into account the flexibilities available to member states.

It is section 3(d) has been under challenge by Novartis and the foreign MNCs and their governments, who have been carrying on a relentless campaign against it.

When the Novartis application for patent for its drug was published by the Patent Controller, 5 entities filed oppositions against it, the Cancer Patient Aid Association (CPAA) and 4 Indian generic companies. Novartis argued before the Patent Controller that its drug, Gleevec, the beta crystalline form of imatinib mesylate salt, was new (or novel), not obvious and industrially applicable. The Oppositionists contended otherwise and also that it was hit by section 3(d). The Patent Controller in his decision agreed with the Oppositionists and held that claimed invention was not novel, it was obvious and it was hit by 3(d). There was no dispute it was industrially applicable.

Against the decision of the Patent Controller the Novartis not only filed appeals but also challenged the validity of section 3(d). It argued that 3(d) was arbitrary and violated the Constitutional provision in this behalf as also that it did not comply with TRIPS. The Madras High Court rejected both the challenges. Pertinently it held that it is not for an Indian court to decide about TRIPS compliance. For that the remedy is provided under TRIPS. Significantly no member State has thought it fit to take the issue of 3(d) to the Dispute Panel under the TRIPS agreement. Obviously because it is TRIPS compliant.

The Appeals were heard by the Intellectual Appellate Board, which held that though the claimed invention was novel and not obvious it was hit by section 3(d) and thus not patentable. It is against this decision that Novartis went to the Supreme Court.

Novartis had argued that the beta crystalline form of imatinib mesylate salt was a two fold step invention over the free base of imatinib disclosed in the Zimmerman patent, firstly from imatinib to non-crystalline form of imatinib mesylate and thereon to the beta crystalline form of imatinib mesylate salt. They argued that the steps were novel and non-obvious. The Court disagreed with Novartis and held that the non-crystalline form of imatinib mesylate salt was disclosed and anticipated in the Zimmerman patent.

However on the beta crystalline form of imatinib mesylate salt, the court assumed that it was novel and not obvious and decided the fate of the claimed invention on the basis of section 3(d).

For the purpose of satisfying the requirement of 3(d), that is the new form being significantly more efficacious over the known substance, Novartis had filed affidavits to show that the beta crystalline form of imatinib mesylate salt was 30% more bioavailable than the imatinib free base as according to them that was the known substance. They also contended that its three additional properties, namely more beneficial flow properties, better thermodynamic stability, and lower hygroscopicity, were properties with regard to efficacy.

The Court held that for the purpose of section 3(d) imatinib free base could not be taken to be the known substance and the comparison with that the claimed invention was not correct. The non-crystalline form of imatinib mesylate salt was the known substance and comparison should have been made with it. It was also because the claimed invention was derived from it. The court further opined that increased bioavailability was on account of the salt and the crystalline form.

Secondly the Court held that efficacy in section 3(d) is therapeutic efficacy. In that context the physio-chemical properties, namely beneficial flow properties, better thermodynamic stability, and lower hygroscopicity, may have advantages but were not properties with regard to efficacy.

On the question of bioavailability, the Court held that bioavailability by itself cannot determine efficacy. In each case the applicant has to determine, through animal in vivo models, how therapeutic efficacy is effected. As Novartis had not done that, it had not satisfied the test of section 3(d) of the Indian Patent Act.

The Novartis decision has enormous significance. The relentless by western pharma MNC to whittle down section 3(d) has been repelled. The case has also made clear what is the meaning of efficacy in section 3(d). Mere advantages is not sufficient. The Applicant has to show by animal in vivo models how therapeutic efficacy is significantly enhanced.

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* Anand Grover is a Senior Advocate practicing in the Supreme Court of India and the Director of the Lawyers Collective HIV/AIDS in India.

Mr Grover is a pioneer in the field of HIV and has handled several hundred HIV/AIDS related litigations in India. He appeared in the first HIV case relating to the HIV activist, Dominic D Souza, The Lucy D Souza case, challenging the isolationist Goa Public Health Amendment Act. He also fought the first case on blood transfusion in the Calcutta High Court, P v. Uol as well as successfully arguing against the patenting of anti-AIDS drug Nevirapine Hemi-hydrate. He and his team in the Lawyers Collective represented the Cancer Patients Aid Association in the Novartis case from the Patent Controller to the Supreme Court.

The United Nations Human Right Council appointed Mr Anand Grover as Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health at its eighth session held in June 2008.