Novartis Case Review

This Post was first published on 15th May, 2013.


Decided by the Supreme Court of India, CIVIL APPEAL Nos. 2706-2716 OF 2013.


Brief Facts

The Appellant, Novartis, filed an application for patent in 1998 for a crystalline salt form of Imatinib and its use in cancer treatment.
It specifically claimed the methanesulfonic acid addition salt form of the compound, Imatinib, called as Imatinib Mesylate (commonly referred to as Glivac or Glivec), in its beta crystalline form, which is non-needle shaped, having better flow properties, thus better processible, less hygroscopic and more thermodynamically stable, thus better storable than its needle shaped, alpha crystalline form, characterized by the differences in the melting points and the X-ray diffraction diagrams. It also claimed that the Beta crystalline form of Imatinib Mesylate has higher bio-availability when compared to the free base form of Imatinib by thirty percent.
The application was rejected by the patent office and later by the Intellectual Property Appellate Board on the ground that the compound did not meet the requirements of Section 3(d), which excludes new forms of a known substance with known efficacy from the scope of patentability unless enhanced efficacy is shown. The Appellate Board relied on the decision of the Madras High court, which held that enhanced efficacy means enhanced therapeutic effect and stated that the compound in question lacked efficacy and therefore fell within the scope of Section 3(d). It however agreed that the compound satisfied the other patentability requirements, such as industrial applicability, novelty and inventive step.  Novartis challenged the decision of the Appellate Board before the Supreme Court of India, which led to this decision.


The Supreme Court considered four issues:
1. What is the true import of section 3(d) of the Patents Act, 1970?
Holding: Section 3(d) seeks to set higher standards to chemical and pharmaceutical inventions. It provides that incremental inventions or improvements over a substance, referred in the section as new forms,  that lack enhanced efficacy when compared to the efficacy of the  original substance are not patentable. Enhancement in efficacy with respect to pharmaceutical substances means therapeutic efficacy and does not include enhancement of the properties of the substance such as flow, stability or bioavailability, unless such properties result in enhanced therapeutic effect.
2. How does Section 3(d) interplay with clauses (j) and (ja) of section 2(1)?
Holding: Section 3(d) lists certain types of substances that are not considered as inventions. The enquiry under section 3(d) is different from the enquiry under Section 2(j), which defines an invention. Section 3(d) assessment is not an extension of analysis under Section 2(j).
3. Does the product for which the appellant claims patent, qualify as a “new product” which comes by through an invention that has a feature that involves technical advance over the existing knowledge and that makes the invention “not obvious” to a person skilled in the art?
Holding: By virtue of its disclosure in the parent patent with respect to Imatinib, which was filed before the patent application in question, the salt form, Imatinib Mesylate, is not novel and inventive. It does not satisfy the requirements under Section 2(j) and 2(ja). It must be noted that the Supreme Court did not discuss whether the beta crystalline form of the salt satisfies the said requirements.
4. In case the appellant’s product satisfies the tests and thus qualifies as “invention” within the meaning of clauses (j) and (ja) of section 2(1), can its patentability still be questioned and denied on the ground that section 3(d) puts it out of the category of “invention”??
Holding: The patentability of a substance can be denied under Section 3(d), even if the substance satisfies Sections 2(j) and 2(ja). The Supreme Court infact denied patentability of Imatinib Mesylate in beta crystalline form irrespective of its enquiry under Section 2(j).


Reiterating its prior decisions stating that  the text of a statute must be seen in the light of its context, which is understood from internal and external sources, the Supreme Court reviewed the history of the patent law in India from 1911 to 2005, with specific emphasis on Agreement on TRIPs and changes brought about for its compliance. Stating that patent systems are not created for inventors but in the interests of national economy, the Court pointed out how the patent law in India impacted the pharmaceutical industry. Noting that the growth of Indian pharmaceutical and chemical industry was propelled by the 1970 Patents Act, which enabled effective health care in India and many other countries, the Supreme Court observed that the changes in patent provisions to comply with TRIPs agreement were brought about bearing in mind the context of health care as served by the Indian pharmaceutical companies. Though the Court cited discussions about Section 3(d) in the parliament and its perceived role in safeguarding access to health, it did not delve into the role of public health and public interest in interpreting Section 3(d).
Talking about patentability, the Court pointed out that an invention would be patentable only if it satisfies the twin tests of invention, which tests novelty, industrial applicability and inventive step, and patentability, which is provided under sections 3 and 4. Though certain products or processes are inventions in the general sense, the Court observed that they may not be eligible inventions under the patent law. Discussing the backdrop of Section 3(d), the Court pointed out that the section primarily deals with pharmaceutical and chemical inventions and that its objective was to prevent abuse of product patents in medicines. According to the Court, the amended portion of section 3(d) clearly sets up a second tier of qualifying standards for chemical substances/pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, checks any attempt at repetitive patenting or extension of the patent term on spurious grounds.
With respect to Imatinib Mesylate, pre-cursor of the invention in question, the Supreme Court after analyzing the scope of a prior patent filed by the Appellant on Imatinib, infringement action initiated by the Appellant against NATCO, an Indian pharma company, and articles published by the inventor, came to the conclusion that Imatinib Mesylate was not new and lacked inventive step. It pointed out that the salt form was covered in the US Patent, which claimed Imatinib and all its pharmaceutically acceptable salt forms. While coming to the said conclusion, the Court pointed out that the scope of claims in a patent cannot go beyond the disclosure and teaching in the patent. It stressed that it did not want the law of patents to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.
Having established that Imatinib Mesylate formed part of prior disclosure, the Supreme Court compared its efficacy with that of Beta Crystalline form of Imatinib Mesylate, which was its polymorph, for purposes of Section 3(d). Stating that efficacy under Section 3(d), for pharmaceutical substances, meant therapeutic efficacy, the Court reviewed the data with respect to enhanced flow properties, increased thermodynamic stability, reduced hygroscopicity and enhanced bioavailability, submitted by the Appellant, and concluded that the Beta Crystalline form of Imatinib Mesylate did not have enhanced efficacy. The said properties, according to the court, did not contribute towards enhancing the efficacy in treatment of cancer when compared to the free base Imatinib or its Mesylate salt.
Discussing about the meaning of efficacy, the Court stated that therapeutic efficacy of a medicine must be judged strictly and narrowly.  It came to this conclusion based on the fact that the text added to section 3(d) by the 2005 amendment, which laid down the condition of “enhancement of the known efficacy” and the fact that the explanation required the derivative to “differ significantly in properties with regard to efficacy”. According to the Court, not all advantageous or beneficial properties are relevant, but only such properties that directly relate to efficacy, which in case of medicine, is its therapeutic efficacy. The mere change of form with properties inherent to that form would, as per the Court, not qualify as “enhancement of efficacy” of a known substance.
As a precautionary measure with respect to interpretation of the judgment, the Court stated at the end that Section 3(d) does not bar patent protection for all incremental inventions of chemical and pharmaceutical substances. It, according to the court, would be a grave mistake to read this judgment to mean that section 3(d) was amended with the intent to undo the fundamental change brought in the patent regime by deletion of section 5 from the Patent Act.

Implications – Legal and Business

From word one, the direction of the Supreme Court’s judgment was clear in its purpose. It was an all encompassing defeat for the Appellant, Novartis, which infact seem to be ably aided by the arguments put forth by its attorneys. That aside, the Supreme Court has in its course towards rejecting the patent application made observations and laid down principles, some of which reiterate the customary approach and others, unconventional to say the least. It is note worthy that the decision, at no point, made statements that favour patent holders, which probably completes their fateful story of litigation at the highest level.
The judgment has laid down two important principles with respect to patentability, which lend some clarity to patent and business decision making. By ruling that analysis of patentability is a two prong approach, first, assessment of whether the subject is an invention  and second, whether the invention falls within the non-patentable subjects, each prong to be analyzed independently, the Court has put to rest any confusion with respect to the relationship between invention and unpatentable inventions. Like earlier, the requirements must be analyzed independently and patentability is a cumulative effect of satisfying both requirements. This is very much in line with the practice being followed by the patent office, courts and also, attorneys.
With a bit of equivocation and what seems like a conscious decision to stay away from specifics, the Court has laid down the purpose and scope of Section 3(d). Limiting the scope of the section to pharmaceutical and chemical inventions, the Court rightly pointed out the well accepted objective, which is to prevent patent abuse and evergreening. However, when it reached the much anticipated part of the section, the meaning of efficacy and tests for its assessment, the Supreme Court’s exposition fell short of clarity. It washed its hands by deciding the case based on its particular facts and by only stating that the meaning of “enhanced efficacy” must be given a narrow construction. To make matters worse, the Court went on to say that this decision does not preclude patents on improvements. Only one aspect is clear from the decision, to pass the muster of Section 3(d), the applicant must build objective experimental data on therapeutic efficacy and data with respect to properties, how much ever research it may involve, would not be enough.
Unfortunately, inferences based on state of the art and inherent advantages flowing from a product’s properties will not be considered, however predictable they may be. In other words, a prospective patent applicant must conduct experiments and compile data to showcase therapeutic efficacy before his application goes for examination. Strategically, nothing much changes except the fact that any one desiring a patent grant on a new form of a known substance must invest on studies aimed at showing therapeutic effect and hope that the data would be ready by the time of examination. This study must of course be preceded by elucidation of therapeutic efficacy in the provisional or complete application, based on predictability or prior experimentation.
This case was infact a great opportunity for the Supreme Court to lay down a test for enhanced efficacy rather than a broad level explanation, which was any way given by the Madras High Court. But it was not to be and as far as Section 3(d) is concerned, the law has not travelled much distance. Conscious, though it might be, it is not good news for patent applicants. By reiterating time and again that the section is limited to pharmaceutical and chemical inventions, the Supreme Court has also open the doors for a TRIPs compliance challenge based on discriminatory treatment of pharma/chemical inventions.
In contrast to the well established purpose of patent law to promote the progress of science and technology for public good, the Court stated in its effort to justify provisions favouring generic companies that the primary purpose of patent law is to safeguard the interests of national economy and not to reward inventors. Its justification was based on statistics of changing role of Indian pharma companies by virtue of changes in patent law among others. While the objective of promoting Indian pharma companies through favourable patent provisions is unquestionable and has worked well for boosting the industry, it neither forms the foundation of patent law, nor is patent law’s application limited to pharma sector. Unfortunately for Indian patent jurisprudence, it seems that the Supreme Court has adopted a constricted purpose, misconstruing or not construing patent philosophy. It is evident from various statements in the judgment that patent law, largely based on experiences in one field, has been seen as a negative instrument, which must be handled carefully.
The purpose construed by the Supreme Court does not end with elucidating its objectives, it infact runs through the whole judgment, surfacing at various points in its analysis of the facts at issue. One glaring example is the Court’s construction of prior disclosure through interpretation of claims. By equating patentability with infringement analysis, the Court has blurred the well defined boundary between the two. It has not only vouched against the doctrine of equivalence, which expands the scope of claims beyond their literal meaning to protect patent holders, wherever just and reasonable, but has meddled with the concept of enablement by stating that the scope of disclosure must be given a wide interpretation, if a patent claim is drafted broadly. As per the Court, claiming is equal to disclosure, irrespective of the experimentation required or state of the art. Infact, the Court compared Hogan, a case involving a chemical invention, where the art was quite mature, with Chiron, which involved an invention in biotechnology, a relatively immature field.
While the populistic decision of the Court is praise worthy, the value attributed by it to the patent system is not. Not even once in the whole decision has the Court viewed the patent system in a positive light. Most, if not all statements, about the patent law indicate that it must be dealt with carefully to avoid detrimental results to the economy and health care. Though the decision is related to a pharmaceutical company, its ramifications can extend to other technologies, especially biotechnology.

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