We are surrounded by many things around us like books, clothes, toys, food, table, chair, pen, bulb etc. almost everything and these are all the creations of mind of various people and this creation of human mind is known as ‘Intellectual property’.
Black’s Law dictionary defines ‘Intellectual Property’ as category of intangible rights protecting commercially the valuable products of the human intellect and intellectual property is divided into two broad categories as; a) Industrial property such as patents, trademarks, geographical indications, industrial designs, trade secrets and b) copyright and related rights and in order to protect the rights of creator government passed various statutory legislations in accordance to the pace of time.
We are living in a twenty first century where people have a notion of grasping the opportunities, acquire knowledge and ability to translate this knowledge for their own advantages by commercial exploitation to extract the fruits of profits out of it and promote social good. This paper will specifically explain the patent, protection of patent, which inventions are patentable and which are non-patentable subject matter, benefits of India being a member state of WTO TRIPS, proper understanding of the word ‘efficacy’, ‘ever greening’, ‘incremental invention’ used in section 3(d) of Patents Act, 1970 from the practical perspective in the light of a case study of a famous case ‘Novartis Ag. V. Union of India’.Keywords: Efficacy, Ever greening, Incremental Invention, Industrial Property, Intellectual Property, Patentable.
In India, Patent is governed by a statutory act “The Patents Act, 1970” which came into force on April 20, 1972 after replacing Indian Patents and Designs Act, 1911. This act came into force on the recommendations made in comprehensive report of Ayyangar Committee headed under the chairmanship of Justice N. Rajagopala Ayyangar. The crux of this act were:
Balance between individual and societal interest,
The basic ideology of the act was laid down in section 83, Patents Act, 1970 which states that the patents are not granted merely to enjoy monopoly for importation of patented invention but to encourage development of invention, promote growth by commercial exploitation, promotion of technological advancement, dissemination of technology for public good, protection of public health and nutrition, promotion of public interest especially in sectors of socio-economic and technological development in India,
Patent were granted to all products except food, medicines, drugs, substance produced by chemical process,
Period of protection were granted fourteen years from date of filing. In cases of foods or medical drugs this period is of seven years from date of filing or five years from date of sealing, whichever is earlier.After India became signatory to TRIPS, government passed amendment bill 1999 to bridge the conflict between Patent Act 1970 and TRIPS on the following points;
Redefining the definition of ‘Invention’,
Section 3(g) of the act was omitted to bring in conformity to Article 27.1 of TRIPS,
Insertion of clause 4A in section 10 of the act,
Amendment in section 45 of the act, to mean date of patent as date of filing of an application.
But this bill has some lacunas such as flexibility with TRIPS has not been achieved, ignores the issues of pharmaceutical companies, definition of ‘Patentable invention’ creating confusion of ‘ever greening’. So this bill was again amended in 2005 and came into force from January 01, 2005 consisting of following key factors;
Product patent was granted along with process patent on foods, drugs, medicines, chemical processes,
In scope of what is not considered to be inventions included ‘mere new use or a known substance’,
A computer program per se is not patentable but its technical applicability in industry or a combination with hardware is patentable
Time period i.e. twelve months for filing complete specification is provided after filing of provisional specification otherwise the application stands to be abandoned,
An application is only be examined on the request of an applicant and also possible to request for early publication of an application in Form 9,
Forms were made simple. Instead of filing lots of forms, only one form is required to be filled for all types of patent application (convention application, PCT National Phase application, Divisional application or Patent Addition),
An Indian resident has to take prior permission for filing a patent application outside India,
Provisions relating to Exclusive Marketing Rights (EMR) and WTO/ mail box application were removed,
Pre grant and post grant (within one year from grant of patent) opposition rights on the basis of lack of novelty, inventive steps, industrial application is been provided to the persons,
Provision of compulsory licensing for manufacture and export of patented pharmaceutical products to other countries having insufficient or no manufacturing capacity in pharmaceutical sector to address the issue of public health on the satisfaction of two conditions; a) country to which the export is made has no capacity to manufacture the product, b) the recipient country should grant the compulsory license for import and sale of drug,
An appellate board was constituted by the name Intellectual Property Appellate Board (IPAB) to file an appeal against the decision of controller and the power of revocation is also conferred to this appellate board.
To meet the needs of changing time of dynamic environment, India became signatory to many international arrangement with an objective to strengthen the patent law and coming in league with the modern world. To which India is a signatory are;
A GATT (General Agreement on Tariffs and Trades) was established in 1947 and only multilateral instrument governing world trade. A total of eight negotiation rounds were held out of which the last round was Uruguay round held in 1986-1994 and discussions were made on the topic of agriculture, services and IPR. After long discussions World Trade Organisation (WTO) was established in which 123 nations participated including India and TRIPS (Trade Related to Intellectual Property Rights) agreement was the final result and covers the following areas like copyrights and related rights (like rights of performers, producers of sound recording, and broadcasting organisations), Trademarks (also service marks), Geographical indications (including appellation of origin), Industrial Designs, Patents (including new variety of plants), Layout designs of integrated circuits and undisclosed information..
This Agreement deals with three important features;
a) All member nations are obliged to provide their minimum standards in every field for the protection of Intellectual Property Rights and should clearly describe the subject matter to be covered, rights to be conferred, exceptions to such rights and minimum duration of protection.
b) Every member nation are obliged to provide the enforcement mechanism to protect Intellectual Property Rights and describe the procedure for the dispute mechanism at domestic level and remedies and special requirements related to border measures and criminal procedures to filled in detailed specifications.
c) All the disputes arising between members of WTO with respect to the obligation arising out of TRIPS Agreement are subject to WTO’s dispute settlement procedure.
As regard Patents, there is a general obligation to comply with the substantive provisions of the Paris Convention. In addition, the Agreement requires that 20 year patent protection be available for all inventions, whether of product or processes, in all field of technology. Inventions may be excluded from patentability if it founds to be contrary to public order and morality. The agreement also allows exclusions for diagnostic, therapeutic and surgical methods and for plants and animals (other than micro-organism) and essentially biological processes. Plant varieties however, must be patentable either by patents or by a sui generis system. The agreement lays down conditions for grants of compulsory licensing or governmental use of patents without the authorization of the owner. Rights conferred in respect of patents for processes must extend to the products patents. Under certain condition the burden of proof shall be on defendants to prove that they have not used the patented process.
Paris Convention for the Protection of Industrial Property was adopted in 1883 in Paris and was the first Intellectual Property treaties. Patents granted in different contracting states for the same invention are independent of each other. On contracting state cannot obligate the other contracting state to grant a patent similarly this concept applies in case of refusal, annulment, termination. Every contracting state must make provisions of compulsory licensing and if it not sufficient to prevent the abuse, there may arise a situation of forfeiture of patent and the proceeding may be instituted after a time period of two years from the grant of first compulsory licensing.
Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the purpose of Patent Procedure, 1977; International Depository Authority provides that the deposit of micro-organisms for patent procedure is sufficient to produce it before the national patent offices of all contracting states. And this authority functions to store micro-organism.
Patent Cooperation Treaty (PCT) was concluded in 1970 providing common procedure for filing application by the name PCT application or international application and after the time duration of 31 months an inventor can file an application for national phase entry with provisional or complete specification.
Patent Law treaty was concluded on June 1, 2000 and came into force on April 28, 2005 with respect to provide the user friendly procedure with regard to national and regional patent applications and patents in order to avoid unintentional loss of substantive rights which may arise on incapacity to comply with procedure and time limits.
PATENT LAW IS A PIECE OF SOCIAL ENGINEERING
“Law is social engineering which means a balance between competing interests in society, in which applied sciences are used for resolving individual or social problems.”
According to Roscoe Pound, social engineering is consisting of two words social means group of individual forming society and engineering means applied science to make a new product after experimentation and experience by means of a machine or instrument or device. The three interests exist in the concept of social engineering i.e. Individual interest, Public interest and social interest. From the individual point of view, individual interests are their personality (the physical person, freedom of will, honor and reputation, privacy and sensibilities, belief and opinion), domestic relations (parents and children, husbands and wives and marital interests), interests of substance (interest of property, succession, freedom of contract, promised advantages, freedom of association, continuity of employment) and on the other hand public interest is the standpoint of the political life while social interest focuses on the needs of the social groups in general security, social institutions security, general morals, conservation of social resources, political, economic, cultural progress.
The five postulates have been mentioned in Pound’s theory in his article ‘A survey of social interest’, that are:
Jural Postulate I: Man assumes that no other men will intentionally commit aggression on him in a civilized society,
Jural Postulate II: For beneficial purpose, a man must assume that they can control what they have discovered or created by their own labour and what they have acquired under social and economic order.
Jural Postulate III: A man must assume that those who are considered as a member of society by him will respond him in good faith and can make good reasonable expectations from their promises and carry out their undertaking on the expectations,
Jural Postulate IV: A man must assume that the person engaged in due intercourse with each other will act in with due care and will not cause unreasonable injury to others.
Jural Postulate V: A man must assume that others, who employ agencies or maintain things, will make use of it in a harmless in their normal action in the sphere elsewhere will restrain them within their personal bounds.
By looking at our present Patent law, it is evident that various jural postulates are satisfied. The first Jural Postulate is satisfied as the Individual has the freedom to work and create their invention and can have the exclusive rights over it. The second Jural Postulate is satisfied as every inventor has the right to take patent over his invention. The third and fourth Jural Postulate is satisfied as the right to oppose is given to the people, revocation of a patent, infringement of a patent and the Fifth Jural Postulate is satisfied by making a provision on compulsory licensing under which a third party after three months of grant of patent can ask for the license in case where the product is not satisfying the needs of the public, invention is not within the territory of India and invention is not made available to the public at affordable price.
Thus it is evident that patent law is a piece of social engineering by the following points;
Exclusive right to use, make, sell innovation is given to patentees,
Considerations been made by the patent office and consequently accruing an interest in them,
Right have been conferred to third parties also like, opposition rights, infringement, revocation. for this they can file a suit,
Compulsory licensing strikes a balance between societal and individual interest and put a check.
ESSENTIAL REQUIREMENTS FOR OBTAINING A PATENT
A ‘Patent’ is derived from the word ‘Patene’ which means ‘to open’. A ‘patent’ means a patent granted for any invention under the provisions of the act. It is considered as a statutory monopoly right protecting the patentee against any unlicensed user of the patented device.
An invention means a new product or process including an inventive step and capable of industrial application. So we can conclude from this that the invention should be new, non-obvious and has industrial applicability.
New Invention: under section 2(1)(l) of the Patents Act 1970 means any invention or technology which has not been anticipated by publication in any document or used in any country of the world before the date of filing of patent application with complete specification.
Courts have interpreted this term in accordance with facts and circumstances of the case as;
Kerala High Court held that any new or useful machine or any new or useful improvement in machine is an invention. While decide the point that a product or process is new or not, court determine it in accordance with section 3 of the act.
Delhi High Court in F. Hoffman-La Roche Ltd. V. Cipla Ltd. observed that a product or process is considered as new if the subject matter does not fall in public domain and state of art, which means that the matter is made available to public by oral or written description or in any other way.
Supreme Court of India observed that important fundamental principle of patent law includes novelty or utility. A product or process must be new or creation of mind as opposed to verification of what was already known before date of patent.
Inventive step: In accordance with section 2(1)(ja), Patents Act 1970, it means a feature of an invention which involves technical advances as compared to existing knowledge or having economic significance or both and the invention is not obvious to a person skilled in the art. Element of obviousness vitiates inventive step. So, inventive step is an essential ingredient of patent but the reason of delay and laches may apply to this. And the obviousness is determined by keeping in view; scope and content of prior art, level of ordinary skill in the prior art, difference between the claimed invention and the prior art and objective evidence of non-obviousness.
Industrial Application: In accordance with section 2(1)(ac), Patents Act 1970 means that an invention is capable of being made or used in an industry. The mere usefulness will not be considered as industrial applicable.
EXCLUSIONS OF PATENTABLE SUBJECT MATTER
The list of subject matter which are not considered as patentable is given under section 3 of the Patents Act 1970 as follows;
Frivolous or illegal inventions,
Inventions contrary to public morality or justice or which causes serious prejudice to humans, animals or plants life or to environment,
The discovery of scientific principles or living or non-living substances present in nature,
The discovery of a new form from known substance which doesn’t result in increasing the substance efficacy,
Admixture of substances,
Duplication of devices,
Agriculture or horticulture methods,
Medicinal, surgical, curative, therapeutic, diagnostic processes or treatments which render humans, animals disease free and helps in increasing their economic value,
Mathematical formulas, business methods, computer programs, algorithms,
Literary, drama, music, artistic works, cinematographic films, sound recordings,
Method of performing mental act or playing game,
Topography of integrated circuit, and
WHY SECTION 3(D) INTRODUCED IN THE ACT?
This section was introduced in amendment act 2005 to protect pharmaceutical patent for the time in India with an objective to prevent pharmaceutical industries from manufacturing old medicines with a minute improvement or in other words we can call it ever-greening in which every business man, professional in order to extract fruits of royalties from the substance, they do it by making a substance from the known substance with petty improvements and also to make it compatible with TRIPS agreement.
A Patent is granted to the inventor for the creation of invention for a time span of twenty years in which an exclusive rights to use, make, and sell his invention is given and also provided with a monopoly right to exclude others from using it without prior authorization of the owner of the patent. After the expiry of this time span of twenty years the invention comes to the public domain and the owner is prohibited from making profit out of it. Here, comes the concept of “Ever greening” where the industry tried their best to extend additional twenty years of a drug by making minor reformulations and without increasing necessary therapeutic efficacy to gain more profits out of it.
The effort was made to strike a balance between patent and to make the life-saving drugs affordable to the common man in the nation. For achieving this aim, compulsory licensing was introduced in which a third person is given a license in public interest, public health and to make available the drug at cheaper price. United States of America has also made efforts to prevent ever greening by introducing Hatch Waxman Act for procedure regulating approval of generic drugs and also includes the provision related to period of data exclusivity, mechanism for obtaining stays on generic product releases.
In Section 3(d), Patents Act, legislators used the expression “discovery”, “new form of a known substance”, “does not enhance efficacy” and the intention behind to add these words are;
Calcutta High Court in CIT v. Assam Oil co. Ltd. observed that human beings knowledge progresses and increased at every stage of learning. They get to know the new things that they weren’t knew it before as the world were meant to be flat before it was known that it is round. Similarly, Newton’s Law of Gravitation also exists before he brought this knowledge in front of the world. So this is the basic difference between discovery and invention. In discovery we get knowledge of the things which are existing prior while in invention there is an involvement of mind to create a new thing which is non-ordinary in the eyes of skilled person.
Various combinations (i.e. salts, ethers, esters, polymorphs, metabolites, pure form, isomers, and mixtures of isomers) have been given under the explanation to be considered as a new form of a known substance unless it differs in terms of properties of efficacy. In Cipla Ltd. V. F Hoffmann La Roche Ltd. Court tries to interpret the legislative intent; as the three words are being used in the section that are known substance, new form and new product but no definition of what is considered as substance or product is provided in the act. As we look from chemistry perspective a new substance would be any substance resulting from a chemical change and if we look from philosophy perspective each inanimate object by virtue of its particularity or determine form is opposite to the genus. Likewise a stone is a determined form and if we chiseled it to form a statue it will be in a new form.
The test of efficacy gives protection to genuine inventions and is considered as an essential element for grant of patent even if any person wants to create something through an combinations of derivatives given in the explanation of the provision then they have to clear the test of efficacy to prove their invention worthy. In Glochem Industries Ltd. V. Cadila Healthcare Ltd. And Ors. Deputy Controller, on the basis of stability and efficacy considered crystalline form of clopidogrel Besylate used for preventing blood clotting and cardiac ailments possessing the host of characteristics of enhanced efficacy. Hence, section 3(d), Patents Act, 1970 did not attract.
Schematic flow of section 3(d), Patents Act, 1970
According to the flowchart, in a nut shell, Patent office grants patent to a mere discovery of substance from the derivatives resulting in enhancement of efficacy, if the result of known process/ machine/ apparatus is new reactant or new product and vice versa.
PERSPECTIVE OF DIFFERENT COUNTRIES TOWARDS THE SCOPE OF POLYMORPH PATENTING
Polymorphism is derived from two words ‘polus’ means many and ‘morph’ means different structures or shapes or we can say in other words as a capability of a molecule to change itself into different shape. This concept was found by Napolean Bonaparte in the year 1812 when he and his soldiers wore the army uniform full of shiny buttons on it and this shiny buttons used to change its colour into dirty gray in winters. At that time it is considered as God’s wrath but now the scientific reason is due to polymorph transition. The first case study related to polymorphism comes into picture in Ritonavir, an antiretroviral drug used to cure AIDS and HIV infections under the brand name ‘Norvir’. This is a semisolid capsule tablet melts at 122 degree Celsius and in summers it was found to be melted due to high temperature. To solve this, the capsules were later replaced by refrigerated gelcaps. So, Indian legislators considered this not as a sole factor for increasing the efficacy because it leads to increment in bioavailability. United States of America, china and Europe did not expressly restrict patent on the basis of polymorphism but the limitation were put under case laws or patent examination guidelines.
On the basis of this, Asia Pacific regions are also planning to grant patent to breakthrough inventions. Argentina also in its patent guideline excluded the subject matter of hydrates, solvate and polymorphs from pharmaceutical and chemical inventions as considered to be the intrinsic property of the substance. Japan Patent office declared that the use of drug can be patented if its new use can be differentiated from the original one. In Article 19, Mexican Industrial Property law, 1991, Mexico mentions;
“Juxtaposition of known inventions or mixtures of known products or alteration of the use, form, dimensions or material thereof, except where in reality they are so combined or merged that they cannot function separately or where their particular qualities or functions have been so modified as to produce an industrial result or use not obvious to a person skilled in art.”
ROUNDTABLE DISCUSSION ON ISSUE OF SECTION 3(D), PATENTS ACT 1970
On March 29, 2010 Federation of Indian Chambers of Commerce and Industry (FICCI) organized a round table discussion at FICCI, New Delhi with an aim to discuss the issues regarding section 3(d), Patents Act, 1970 which was attended by government officials, politicians, pharmaceutical industries representatives, lawyers, NGO’s, academicians etc.
Mr. TC James was given a task to make a report on the topic “Patent Protection and Innovation; section 3(d) of the Patent acts and Indian Pharmaceutical Industry”. This report was divided into four parts excluding introduction and conclusion i.e. Nature of incremental innovation, the benefits of incremental innovation for pharmaceutical industries in India, performing patents act to realize the benefits of incremental innovation for pharmaceutical industries and need for adequate incentives.
The statistics were shown in the report that in the year 2004-05 the number of patent granted to pharmaceutical industries were 765 which later got increased by 3500 after the patent amendment act 2005. Thus we can analyze it that there has been no reduction in innovations due to the amendments made in 2005. So it draws a clear line of distinction between incremental innovations and ever greening of products or processes.
The key points of the report were;
Difference between big breakthrough and incremental innovation,
Incremental innovation is advantages as it strikes a balance between societal and right holder interest as it makes available the variety of drugs to the society at an affordable rates and thus promoting health of the society,
Strength of Indian pharmaceutical companies was seen in incremental innovations and they are filing patent applications for abroad for incremental innovations,
This section is not TRIPS compatible and is a bar to incremental innovations.
Later on, a committee named ‘Mashelkar Committee’ was constituted and assigned a work to study whether section 3(d) is compatible to TRIPS agreement or not for pharmaceutical substance to New Chemical Entity (NCE) or new medical entity involving combinations. The committees answer regarding this was ‘NO’ if they made it in affirmative form then the pressure will lie on government to amend the Patent Act to provide the restrictive definition of patentable subject matter in accordance with public interest. So, in this way committee favored innovations resulting in ‘enhancement of efficacy’ and is against the ‘frivolous innovations contrary to natural laws’ and ‘ever greening’ and also sets the criteria for safety and efficacy standards involving new forms, analogs etc.
Some have the misconception that section 54, Patents Act 1970 which provides a provision of patent addition in which a controller may on the request of an applicant grants the permission to make improvement or modification in an invention but this right also gets exhausted with the invention only and an applicant cannot apply for this once your invention comes in public domain. This was done to prevent ever greening because ever greening will affect the public health as it would delay the entry of cheap generics so, section 3(d) prevents the extension of exclusivity of drugs beyond the prescribed time period i.e. twenty years. It is necessary for our country to make expenses on research and development activities rather than making reformulation of product or processes so that the public health be promoted and our country will move one step further towards welfare state.
United Kingdom Commission on Intellectual Property Rights (CIPR) in a report state that developing countries are not bound to make their rules and regulations of IPR regime according to the standards of developed countries. So it is not clear yet that the government amended section 3(d) according to this statement or not but this section provides an example of rationale limitation of scope of patent is achieved. Thus this section can be considered as path breaking for other countries as it inspires other countries on a point to avoid unhealthy practice of extending the life of drug by making reformulations because earlier the time period was fourteen years which later got increased to twenty years, this extension of time denotes that the legislators have already provided enough time period to extract profits out of it and contribute to development.
By noting this, an attitude of US is also changing towards this. In November 2006, council on Foreign Relations made a special report on reforming US Patent Policy and observed that;
“more rigorous standards for determining whether an invention is obvious or novel be applied to patent applications.”
subsequently, in KSR International Company v. Telefax Inc. case, the US Supreme Court observed;
“Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility”.Basheer observes;
“By making derivatives with enhanced efficacy patentable, section 3(d) encourages the sequential development of existing products or technologies to help bring in improved products that address unmet public health needs.”
NOVARTIS A.G VS UNION OF INDIA
Citation: (2013) 6 SCC 1
Date of Judgment: 1st April 2013
Name of the Judge/s: Hon’ble Justice Mr. Justice Aftab Alam and Hon’ble Justice Ms. Ranjana Prakash Desai
Article 14 of the Constitution of India, 1950
The state shall not deny to any person equality before law or equal protection of law within the territory of India, prohibition of discrimination on the grounds of religion, race, caste, sex or place of birth.
Article 27 of the TRIPS Agreement
Patents shall be available for any inventions, whether products or processes, in all fields of technology provided that they are new, involve inventive step and has the element of industrial application and this right is enjoyable without the discrimination of place of invention, field of technology and whether the products are imported or locally produced.
Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.
Article 64 of the TRIPS Agreement
The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding shall apply to consultations and the settlement of disputes under this Agreement except as otherwise specifically provided herein.
Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 shall not apply to the settlement of disputes under this Agreement for a period of five years from the date of entry into force of the WTO Agreement.
During the time period referred to in paragraph 2, the Council for TRIPS shall examine the scope and modalities for complaints of the type provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 made pursuant to this Agreement, and submit its recommendations to the Ministerial Conference for approval. Any decision of the Ministerial Conference to approve such recommendations or to extend the period in paragraph 2 shall be made only by consensus, and approved recommendations shall be effective for all Members without further formal acceptance process.
Section 2(1)(j) of Indian Patents Act, 1970
Definition of “invention” is provided under this sub section as a new product or process involve an inventive step and capable of industrial application.
Section 2(1)(ja) of Indian Patents Act, 1970
Amendment 2005 makes the definition of “inventive step” more precise as a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.
Section 3(d) of Indian Patents Act, 1970
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. Explanation. -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.
Background of the case:
Novartis is a pharmaceutical company focuses on manufacture, develops and market a range of health products worldwide. The drug ‘Glivec’ was originally being developed by a medicinal chemist named ‘Jurg Zimmerman’ and the name imatinib was given by World Health Organization (WHO) as a non-proprietary name. The derivatives including derivative is found useful to treat warm blooded animals as it contains the properties of anti-cancer enzymes. This was submitted in US for patent on April 28, 1994 and the patent was granted in 1996. On the basis of scientific research it was found that beta crystalline of imatinib is more stable and for the same product on the basis that it contains new properties like thermodynamic stability, lower hydroscopicity than the alpha crystalline form of imatinib Novartis applied for the patents in India also in 1998 but the application was dealt only in 2005 when India became the signatory to WTO TRIPS.
Imatinib was developed in the late 1990s by biochemist Nicholas Lydon, a former researcher for Novartis, and oncologist Brian Druker of Oregon Health and Science University and in 2003 by using this salt, Novartis introduce leukemia drug called Gleevec in India at a rate of INR 14103 and filed an application for want of patent in India which got rejected.
A patent is an exclusive right given by the law to the owner of an invention to make it, use or exploit his invention for a limited period of time (i.e twenty years from the date of filing) and prevent the others from making, using, importing or selling the invention without his permission. This invention can be any product, process to use, or a method to do new things etc.
Through the facts, Novartis is a global healthcare company based in Switzerland that provide solutions to the evolving need of patients worldwide. This company filed series of patent application, one of which is US in 1990 for a drug containing “imatinib”. They were granted patent as this drug contains pharmaceutically accepted salts and the US Food and Drug Administration (FDA) approved in the form of Novartis marketed drug “Gleevec”.
In this case, Novartis is a swiss based company which applied for a patent in 1998 in India as per the TRIPS agreement of the World Trade Organization stating that the substance used in the anti drug for leukemia is an invention. They filed a “mail box” patent application in Madras patent office for imatinib mesylate, a beta crystalline form of the free base imatinib, but this application is processed in India in 2005 when India’s patent law allows product patent for pharmaceutical products. This application got rejected by the Assistant Controller of Patents and Design on the ground that it does not satisfy the requirements of patent i.e. novelty and non-obviousness as per the Indian Patent Act, 1970. At that time Appellate Tribunal Board overseeing the case related to patent was not in existence but before the High Court could decide on the matter, the Intellectual Property Appellate Board (AIPB) was formed and the case was transferred thereto as per section 117 G of the act that allows to transfer the pending proceedings or the case to Appellate Board. The board deviates from the decision which was made by Assistant Controller of Patents and Design and held that Novartis met the requirements of novelty and non-obviousness which was necessary as per the Patent Act. However it rejected the application on the ground that it was a mere discovery of a new form of a known substance which did not result in the enhancement of the known efficacy of that substance and also because Novartis could not prove any significant efficacy of the drug. Thus the application was rejected by the board since Novartis failed to fulfill the requirements as per Section 3(d) of the Indian Patents Act, 1970.
Not satisfied with the decision of Appellate Board, Novartis filed two writ petitions before the Madras High Court in May, 2006 under Article 226 of the Indian Constitution declare that section 3(d) of the Patents Act, 1970 as substituted by the Patents (Amendment) Act, 2005 is non complaint with the TRIPS agreement or is unconstitutional being vague, arbitrary and violative of Article 14 of the Constitution of India and consequently to direct the Controller General of Patents and Designs to allow the patent application. Indian government, the Patent Office, several Indian generic drug manufacturers and an Indian public interest group were the respondents of the suit. High court held that the object of section 3(d) of Indian Patent Act, 1970 was to prevent “ever greening” by companies and also stated that the Novartis has a right to present the case before the court of law over the appellate board. Subsequently in 2009 after the decision of Appellate Board, Novartis filed a Special Leave Petition in Supreme Court under Article 136 of Constitution of India due to urgency, as the patent if granted on appeal would expire by 2018.
Question of Law:
The following issues were raised before the Supreme Court:
Whether the drug that Novartis sought a patent for was hit by Section 3(d) of the Patents Act?
Courts in India have jurisdiction to review Section 3(d) of the 2005Amendment to check its compliance with Article 27 of TRIPS, and alternatively, whether courts in India has the power to grant declaratory relief that Section 3(d) is not compliant with TRIPS and therefore violates Article 14 of the Constitution of India?
Whether it involves ever greening?
Whether imatinib mesylate in beta crystalline form has enhanced efficacy over imatinib or imatinib mesylate to clear the test of section 3(d) of Patent Act?
Whether Section 3(d) is in violation to Article 14 of Indian Constitution because of it is vague, arbitrary and confers uncontrolled discretion to the Patent Controller?
Appearing for Novartis, Mr. Tehmtan R. Andhyarujina, Senior Counsel, urged that once it got established that the beta-crystalline form of imatimib mesylate was an “invention”, section 3(d) could not have been applied by the IPAB to reject Novartis’ patent application. He said that the IPAB’s holding indicated a complete non-application of mind in as much as it held the beta-crystalline form of imatinib mesylate to be an invention and then applied section 3(d)—a provision relating to discoveries—to refuse the grant of patent to Novartis’ invention’. Disputing the IPAB’s holding that the term “efficacy” in section 3(d) means therapeutic efficacy, Mr. Andhyarujina has put forward his views that the IPAB has erroneously relied on the Madras High Court’s interpretation to interpret the word “efficacy” and means the same as therapeutic efficacy in the pharmaceutical field.
Supreme Court decided the matter de novo looking into both the facts and laws involved in the case.
The court first analyzed the question of section 3(d) of Patents Act, 1970. It was clear from the Zimmerman patent that imatinib mesylate itself was not new and hence is incapable to qualify the test of invention as laid down in sections 2(1)(j) and 2(1)(ja) of the Patents Act, 1970. The court then examined the beta crystalline form of imatinib mesylate and opined that this pharmaceutical substance is moreover a polymorph of Imatinib Mesylate. Therefore, the Supreme Court held that the drug that Novartis sought as a patent was hit by Section 3(d) of the Patents Act and therefore was not considered as an invention 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”, which is not an invention within the meaning of the Patents Act.
Section 3(d) also has an explanatory clause;
“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 pharmaceutically acceptable salt version. Imatinib Mesylate is further used for producing its beta crystalline form. Along with this, the Supreme court held that Section 3(d) did not violate Article 14 of the Constitution of India and was not vague or arbitrary and didn’t confer uncontrolled discretion to patent controller.
In applying 3(d) of the Act, the Court interpreted “efficacy” as “therapeutic efficacy” because the subject matter of the patent is a compound of medicinal value. Since the term “efficacy” is not defined in the Act, the SC referred to the Oxford Dictionary and observed that Efficacy means “the ability to produce a desired or intended result”. Accordingly the SC observed that factors like “the function, utility or the purpose of the product under consideration” shall be kept in mind to examine any person for the test of efficacy. Therefore, the SC held that in case of medicines, whose function is to cure disease, the test of efficacy can only be “therapeutic efficacy” and acknowledged that physical efficacy of imatinib mesylate in beta crystalline form is stable in comparison to other forms and that the beta crystalline form of imatinib mesylate if compared to imatinib in free base form has 30 per cent increased bioavailability. However, as no material had been offered to indicate that the beta crystalline form of imatinib mesylate will produce an enhanced or superior efficacy (therapeutic) so the court concluded that the beta crystalline form of imatinib mesylate, fails to qualify the test of Section 3(d) of patents act. Thus, upholding the view that Indian Patent Act for grant of pharmaceutical patents apart from proving the traditional tests of novelty, inventive step and application, there is a new test of enhanced therapeutic efficacy for claims that cover incremental changes in forms of existing drugs. The court further reach out on a view that a mere change of form with properties inherent to that form would not be considered valid for qualifying the test of enhancement of the efficacy of a known substance.
“Evergreening,” is referred to the practice whereby pharmaceutical firms extend the patent life of a drug beyond 20 years’ time period provided for patent protection by making minor reformulations and without necessarily increasing the therapeutic efficacy. On the basis of this, Supreme Court rejected Novartis’ attempt to take protection for “ever greening” patent. Meaning that, the modification made by Novartis did not satisfy the standards of inventiveness required under Indian patent law. As a result, Indian pharmaceuticals may continue producing generically Novartis’ medication and sell it in India at a fraction of the Swiss drug’s cost. Novartis claimed that there was a misconception suggesting Gleevec is an incremental improvement or “evergreening” rather than a novel drug.
Thus, we can summarise that the Supreme Court has rejected the plea of Novartis for grant of a pharmaceutical patent for its anti-cancer drug sold in the name of Glivec/ Gleevec. The judgment has received mixed reactions both contented and condemned. Supreme court has carved out a fine line for the grant of new patent, being that unless a therapeutic benefit is gained from the drug sought to be patented, a patent must not be granted, thereby keeping the object of Section 3(d) of Indian Patent Act, 1970 and allows competition, which is useful as it ensures that drugs will be available at a competitive price in the market and thus avoid “ever greening” and permit Indian companies like Natco and Cipla to make and sell Glivec, not only for India but to most third world countries.
Indian became the member of World Trade organisation in 1995 as a result Indian legislators make changes in Indian Patent Law so as to meet its obligations to amend as per the provisions of the Agreement related to Trade Related Aspects of Intellectual Property Rights (popularly known as TRIPS Agreement). TRIPS has benefitted in many ways and helps to combat diseases for example; Southern African Development Community (SADC) were facing many ailments like HIV/ AIDS, tuberculosis, heart disease, do not have pharmaceutical manufacturing capacity to make drugs to cure such diseases and make it available to their public at affordable prices so as a member of World Trade Organisation (WTO) they have the advantage of taking imported medicine from other member countries to protect the people of their country.
The cost made difficult for the people to afford the generic versions of patented medicine. On quote of section 3(d) Indian Patents Act, 1970 the Chennai Patent Office rejected a grant of patent to make it affordable for the people.
Supreme Court has made the decision to protect genuine inventions as against frivolous inventions. As this is a life-saving drug so this should be available at an affordable price so as to maintain a balance between public interest and investor interest.
This is the battle between market monopoly and public good. Supreme Court maintained a sane perspective on drug pricing and accessibility and aimed at preventing ‘evergreening’ and not allowing patents on new forms of existing medicines unless they demonstrate a significant increase in efficacy and sets a higher tier of qualifying standards.
This case proves as a lesson to make government, who are sensitive towards public health needs of its people, understands the possibility of taking advantage of TRIPS flexibility with the aid of an independent judiciary. This decision has been proved a victory for generic industry in India.
Novartis did not lose hope and become successful in registering its patent of new use of Imatinib in South Africa as per Treatment Action Campaign (TAC) and Medecins sans Frontiers (MSF), which does not expire till 2022. This must be a lesson for SADC to amend their IP laws by finding loopholes.