In this case study, the author has analyzed the landmark judgment of Novartis AG v. Union of India In a nutshell, this case related to the rejection of a patent of a drug for not involving an inventive step. The main rationale for rejecting this patent was to avoid the repeated patents of similar products by introducing minor changes on the previous patented product.


Intellectual Property law is the law that governs the legal framework regarding the intangible form of properties. A patent is a type of intellectual property which is given in relation to an invention. An invention (product or process), which is new, useful, involves inventive steps and has industrial application can be patented in India, provided that it does not fall in the categories of non-patentable inventions under the Indian Patents Act, 1970.

Patent is granted to the inventor to enable her to have the legal right to exclude other persons from using, making, selling or offering for sale that invention for a certain period of time, not exceeding 20 years.

This is one of the most controversial judgments in patent law. This judgment received worldwide media coverage and attracted criticism internationally for being too strict in the patenting of pharmaceutical products. However, the stance of Indian courts was justified in the interests of the poor population of the developing country.

In this case study, the author has firstly given a factual description of the facts, issues and the judgment rendered by the Hon’ble Supreme Court of India. Then, the author has critically examined the case from the point of view of India and U.S and also from the point of view of a consumer and a pharmaceutical company. Lastly, the author has concluded the study in favor of the judgment in context of India.

Facts of the Novartis AG v. Union of India

Novartis AG v. Union of India

Novartis International AG is one of the biggest international pharmaceutical companies in the world. It filed a patent application in 1998 under the TRIPS agreement before the Indian Patent Office in Chennai. The patent application sought to obtain patent of ‘Glivec’, an anti-cancer drug to be used in the treatment of Chronic Myeloid Leukemia (CML) and Gastrointestinal Stromal Tumours (GIST). This drug was produced from Beta crystalline form of “Imatinib mesylate”. In many countries, this drug has been patented and is used for the treatment of cancer.

At the time when Novartis had filed this patent application, India followed the process patent approach and only processes, not products could be patented in India as per the Indian Patent Act, 1970. Post the Patent (Amendment) Act, 2005, now the patents of products is possible in India as Section 5 of the Act was repealed. Therefore, it was in 2005 that Novartis’s patent application was taken into consideration by the Madras Patent Office and was rejected by it on the ground that the drug ‘Glivec’ was predicted by prior publication and consequently, could not fulfill the requisites of novelty and non-obviousness.

Secondly, it was held that the product was not patentable under Section 3(d) of the Act as it did not reveal any substantial changes in therapeutic efficacy over its previous form, which is Zimmermann patent.

After the Madras Patent Office’s rejection, Novartis filed two writ petitions in 2006 before the Madras High Court under Article 226 of the Constitution of India. One petition challenged the constitutionality of Section 3(d) of the Indian Patent Act, 1970 on the grounds of alleged violation of Article 14 and TRIPS agreement. Another petition sought to challenge the order of rejection of patent by Madras Patent Office. In 2007, the case was transferred by the Madras High Court to the Intellectual Property Appellant Tribunal (IPAB), an appellate body patent controller.

Upon hearing, IPAB rejected the appeal of Novartis on the ground that although the drug stood the test of novelty and non-obviousness, it was hit by Section 3(d) of the Indian Patent Act, 1970. The main rationale for rejecting this patent was to avoid the repeated patents of similar products by introducing minor changes on the previously patented product and giving easier accessibility to Indian people of life-saving drugs. This is also known as ever-greening of patents.

Hence, in 2009, Novartis filed a Special Leave Petition (SLP) before the Supreme Court of India under Article 136 of the Constitution of India to challenge the decision of IPAB.

Issues for Consideration

Novartis AG v. Union of India

The Supreme Court formulated the following issues for consideration in the SLP filed by Novartis in Novartis AG v. Union of India –

  1. Meaning of ‘known substance’ under Section 3(d) of the Indian Patent Act, 1970.
  • Meaning of ‘efficacy’ under Section 3(d) of the Indian Patent Act, 1970.
  • Whether increase in bioavailability will amount to increase in therapeutic efficacy under Section 3(d) of the Indian Patent Act, 1970.
  • Whether the invention “Beta crystalline form of imatinib mesylate” alleged in the patent application is more efficacious than the substance that it originated from, which is “Imatinib mesylate”.

The Judgment

Novartis AG v. Union of India

In a nutshell, the Supreme Court held that the drug failed the test of Section 3(d) of the Indian Patent Act, 1970. Now, the issue-wise analysis:-

On the first issue, the Apex court had to deduce whether “mesylate salt form of imatinib” had been disclosed prior to 1997 and therefore publicly known or not. Upon presentation of documentary evidence, the court observed that it was publicly known. This was the form in which the drug was marketed.

On the second issue, the court interpreted the meaning of ‘efficacy’ under the aforesaid section. The court said that it meant that the drug must reveal an improvement in its therapeutic effect or curative ability in comparison to its old form, only then can patent be obtained. In regards to pharmaceutical products, the court observed that therapeutic efficacy could have several meanings. It could mean only curative effect or it could extend to include increased safety or decreased toxicity.

Therefore, the court did not indulge deep into the interpretation of the word and left it open. The evidence presented by Novartis alleged that their drug was different in certain properties relating to production and storage like heat stability. The Apex court said that such differentiation although important from the perspective of storage, is not relevant to evidence the enhanced therapeutic efficacy.

Upon the third and fourth issue, the court observed that to stand such efficacy test, the earlier form and the new form had to be compared. Upon such comparison by the court, the results were very odd. While Novartis alleged 30% increase in the bioavailability of its drug, the court noted that such increase was not made in reference to the known and previously available mesylate salt form, which is in reality soluble, but was in reference to free base form of imatinib, which was not marketable as it was insoluble. Therefore, the court held that Novartis in fact did not conduct comparison between the new and the old form of salt.

The term ‘bioavailability’ was interpreted by the court to mean the measure of level at which the drug is made to exist in the human body. Such level of bioavailability may or may not have an effect over the therapeutic efficacy or curative ability of the drug. The petitioner, Novartis offered no evidence to prove that the beta crystalline form of imatinib was more efficacious and had more therapeutic effect than the earlier form.

In the present case, the court held that such effect has not been proven. The court however, did not say that change in bioavailability can never result in increase in therapeutic efficacy. It only held that the petitioner had to establish such proof of enhanced efficacy, which the latter was not able to.

The Supreme Court observed that the basic intention of Section 3(d) of the aforesaid Act is to prevent the practice of ever-greening of patents. However, it does not mean that it bars all incremental inventions. Inventions involving life-saving drugs require great caution and deliberation in the interests of the masses. However, this case faced worldwide criticism and called out the strict approach of Indian courts in relation of patenting of pharmaceutical products.

Critical Analysis of the Judgment

Novartis AG v. Union of India

This judgment has been criticized internationally. A number of international pharmaceutical companies showed criticism of this judgment as compromising the future of innovation, especially in Indian markets. It was further severely criticized by U.S Chamber of Commerce. However, before giving opinion on the quality and context of the judgment, it is necessary to understand the difference in the Indian and U.S approach of patenting,

Indian patenting approach is stricter than the U.S or EU approach. In India, the inventor does not only need to prove the novelty of the known compound and its difference with the old form, but also needs to establish that the alleged improvement will further improve the treatment of the patients. While this approach was also followed by U.S till 1995, it changed its approach in case of Re Brana. Now, it allows patents to be granted to inventor even in minor modifications. Therefore, U.S advocates the practice of ever0greening of patents, while India considers it to be a violation of its laws.

The argument put forward by the U.S to justify this practice is that such practice encourages innovation and new drugs. However, it fails to comprehend it form the point of view of a consumer as it allows the inventors to market and sell expensive patented versions of a popular drug. On the other side, the contention extended by India for not allowing such a practice is to protect the interests of the people as it is a developing country.

Such practice would otherwise allow the marketability of life-saving drugs at a high price, which is not affordable by a common Indian person. Some might argue that the stringent approach of Indian courts might threaten the innovation and long-term welfare of the patients by not allowing minor modifications in drugs to be patented.

In the context of this case, it can be argued that the Supreme Court has nowhere said that a new form of compound can never be patented, nor has it held that improving bioavailability of the drug will never result in increased therapeutic efficacy. All that was held by the Apex court was that Novartis failed to establish either of the contentions.


Novartis AG v. Union of India

In the context of India, this judgment is a huge relief for the consumers as it prevents marketability of expensive life-saving drugs without proven improved efficacy on its therapeutic effects as an average person in India will not be able to afford the same. This case has discouraged such companies which even after earning billions of money by selling life-saving drugs prevent people from purchasing such drugs at low price.

This is in the interest of the poor people of the country whose lives are protected by disallowing the companies from obtaining patent over such drugs. This is in line with protecting and balancing the interests of all the stakeholders and acts as a check against the over-capitalization of medicines in a developing country like India. Protecting the interests of the poor and underprivileged by offering life-saving drugs at reasonable rates is in line with the constitutional spirit of Directive Principles of State Policy.

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