Novartis v Union of India

i
A Case Study

Glivec
ii
and Novartis are the buzzwords that have become synonymous with India and
its Patent law. Today, there is unprecedented pressure from the US for India to buckle
down from its position on patent protection and ease the passage of patents such as
the one for beta crystalline form of Imanitib Mesylate
iii
.

While everyone has a take on the subject, it is important to note the historical reasons
behind the enactment of the notorious S. 3(d). The Supreme Court stated, A statute is
best understood if we know the reason for it. The reason for a statute is the safest
guide to its interpretation.
iv
However, first the reasons provided by the Supreme
Court to reject the grant of the patent to Novartis once and for all shall be examined.

The Supreme Court judgment noted the parliamentary debate while S. 3(d) was being
considered on the floor: A company (Novartis) which obtains a patent by changing
their chemicals, before the expiry of the patent, they will again apply for a patent and
again get a patent the drug (Gleevec/Glivec), is used for the treatment of Leukemia
cost of the drug for the treatment of this disease comes to about Rs. 1,20,000 per
month

in India. At the same time, the generic versions are available in the country
which cost only Rs. 8,000 to Rs. 10,000.
v


Thus, the Supreme Court adjudged that Section 3 was an added layer of protection.
What is an invention under S. 2(1)(j) of the Act may not necessarily be patentable
under S. 3 of the Act. The duality of meaning
vi
was added by the Government in order
to allay the fears of the members from the Opposition concerning the introduction of
product patents for pharmaceuticals and agricultural chemicals. The amendment of S.
3(d) somewhat softened the blow of the introduction of product patents which India
was bound to do in order to comply with TRIPs.

This takes the discussion further back to why India was hesitant to introduce product
patents in the first place. The Justice Ayyangar Report of 1959 which led to the
enactment of the original Patents Act, 1970 quoted from Michel with approval:
Patent systems are not created in the interest of the inventor but in the interest of
national economy. The Rules and Regulations of the patent systems are not governed
by civil or common law but by political economy.

Following from the Report, the original had a S. 5, which read as follows:
Section 5. I nventions where only methods or processes of manufacture
patentable In the case of inventions
(a) claiming substances intended for the use, or capable of being used, as food
or as medicine or drug, or
(b) relating to substances prepared or produced by chemical processes
(including alloys, optical glass, semi-conductors and inter-metallic
compounds), no patent shall be granted in respect of claims for the
substances themselves, but claims for the methods of processes of
manufacture shall be patentable.
This Section, which effectively denied any sort of product patent was deleted in the
2005 Amendment to comply with Indias obligation as a signatory of the TRIPs
Agreement and Member of WTO. However, several observations and scholarly
publications attributed Indias strict patent policy as a direct cause of the growth of
the Indian Pharmaceutical industry. Due to a budding generic drugs industry, there
was great indigenous opposition to the TRIPs Agreement. During the course of the
arguments in the Supreme Court in this very case, Dr. Dhawan, appearing for Cipla,
called the TRIPs a predatory and coercive agreement.
vii


But the fact remained that India had to amend its Patent law to come in line with the
requirements of TRIPs.



i
Novartis AG v. Union of India and Ors. AIR 2013 SC 1311
ii
J. Zimmermann, Pyrimidine Derivatives and Processes for the Preparation Thereof,
https://www.google.com/patents/US5521184.
iii
In fact, the USA took India to a WTO panel (WT/DS50/AB/R, dated December 19,
1997) in regard to the absence, in India, of either patent protection for pharmaceutical
or agricultural chemical products under Art. 27 of TRIPs; this was confirmed by the
WTO. On appeal, the WTO Appellate Body recommended that the Dispute
Settlement Body request India to bring its legal regime for patent protection of
pharmaceutical and agricultural chemical products into conformity with Indias
obligations under TRIPs Agreement.
iv
Utkal Contractors and Joinery Pvt. Ltd. and Ors. v. State of Orissa and Ors.
(1987) 3 SCC 279
v
Ibid at 1 Para 82
vi
Ibid at 1 Para 91
vii
Ibid at 1 Para 65