Analysing the Novartis Story


Vol – XLVIII No. 32, August 10, 2013 | Anand Grover

A detailed account of the examination of Section 3(d) of the Indian Patents Act in the Supreme Court’s judgment on Novartis’s patent application for Glivec.

Anand Grover ([email protected]) is a Senior Advocate practising in the Supreme Court and the Director of the Lawyers Collective. He and his team in the Lawyers Collective represented the Cancer Patients Aid Association in the Novartis case from the beginning in the Patent Controller Offi ce to the end in the Supreme Court.

In many ways, the Novartis story starts in the 1980s when western multinational corporations (MNCs), notably the pharmaceutical and music industries in the US, decided that the whole world should have intellectual property regimes like the one in the US; a vision they pursued through their governments, ultimately leading to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, and still being pursued through other means.1

The TRIPS Agreement sets out mandatory minimum standards of intellectual property rights protection and enforcement measures for the World Trade ;Organization (WTO) member countries. Thus, in terms of patent law, in Article 27.1, the TRIPS Agreement mandates that member countries have to provide patent protection for a period of 20 years, for products and processes that are novel, not obvious and are industrially applicable. However, as explained in Correa’s (2013) accompanying article, it does not stipulate what is “new” or an “inventive step”, flexibilities that developing countries secured in TRIPS.

In the 1970s, after considerable deli;beration,2 which has been reviewed in Sengupta’s (2013) contribution, India amended its patent law, notably by removing the protection for product patents and restricting protection only to processes in medicines and foods.

This resulted, not only in competition in the pharmaceutical sector, but gave a lease of life to the Indian pharmaceutical industry, making drug prices in India amongst the lowest in the world. By 1988, India became a net exporter of high quality affordable drugs, eventually becoming the “pharmacy of the developing world”. In the late 1990s, the Indian generic industry was providing over 90% of quality, safe, efficacious and affordable antiretrovirals (ARVs) to the developing world (Waning et al 2010).

India had to comply fully with its obligations under the TRIPS Agreement by 1 January 2005. Parliament amended the patent law in 1999 to introduce the interim Exclusive Market Rights (EMR) r;egime required under TRIPS.3 Later, Parliament amended the Patents Act in 2002 and had to finally comply in 2005.4

By the beginning of 2005, when the final amendments had to be carried out to the Patents Act, Parliament was not only mindful of its obligation under TRIPS, but also of its obligation to protect the Right to Health for its own citizens in India, as also for those of the developing world.5 As illustrated by the Novartis case, it was also conscious of the practice of evergreening: patents being granted not only for the New Molecular (or Chemical) Entities (NMEs or NCEs) with genuine new therapeutic benefits, but also for new forms of the same or known substance. In fact, over 75% of the patented drugs were such forms of known substances (NIHCM 2002), thus eliminating competition, extending monopolies, making drugs unaffordable, and adversely affecting the right to health.

The challenge for Parliament, therefore, 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 evergreening, promote generic competition, and thereby protect the right to health.

Parliament was guided in its deliber;ations by the Doha Declaration6 and s;everal representations from around the world, including from the World Health Organization (WHO) and UNAIDS.7 Importantly, several Members of Parliament cutting across party lines voiced their concerns. And, these hopes were crystallised in Section 3(d) in the Patents Act, among other provisions.

It is Section 3(d) that Novartis challenged and, as noted in Correa’s (2013) contri;bution, relentlessly campaigned against.8

In 1997, Novartis had filed the appli;cation for its claimed invention, the drug Glivec, the β crystalline form of the salt, imatinib mesylate, before the Chennai Patent Controller, and was kept in the mailbox.

Hit by Section 3(d)

After 1 January 2005, the mailbox facility was opened. Five pre-grant oppositions were filed, one by the Cancer Patients Aid Association (CPAA), and four by I;ndian generic companies.9 Novartis contended that the claimed invention was novel, inventive and industrially ;applicable. The oppositionists contended otherwise. They also argued that the claimed invention was hit by Section 3(d) of the Patents Act.

In this respect, Novartis had filed additional affidavits ostensibly to show that on account of the alleged increased bioavailability (30%) of the β crystalline form imatinib mesylate, there was a significant increase in the efficacy in the claimed invention.10 While there was no dispute as to the claimed invention’s ;industrial applicability, the Patent Controller concluded that the claimed invention was neither novel nor inventive and was also hit by Section 3(d), thus, rejecting the application.

Against this order, Novartis filed appeals before the Madras High Court. These were later transferred to the Intellectual Property Appellate Board (IPAB). Both, Novartis AG and Novartis India also challenged the validity of Section 3(d) on the grounds that it did not comply with the TRIPS Agreement and the term “efficacy” was vague and, therefore, in violation of Article 14 of the Constitution. The Madras High Court dismissed both the Writ Petitions on both the grounds. It also held that Section 3(d) had been enacted, amongst others reasons, to protect public health, observing,

We have borne in mind the object which the amending Act wanted to achieve namely, to prevent evergreening; to provide easy access to the citizens of the country to life saving drugs and to discharge their constitutional obligation of providing good health care to its citizens.11

Importantly, Novartis did not challenge the order of the Madras High Court.

In the appeals, the IPAB reversed the Patent Controller order on two grounds, and held that the claimed invention was novel and inventive. However, it agreed with the Patent Controller that it was hit by Section 3(d) and rejected the patent application. It was against this order that Novartis filed the Special Leave P;etition in the Supreme Court.

In the Supreme Court, the maintain;ability of Novartis’s appeal was dropped and it was heard on merits.

On Merits

Novartis had patented imatinib, which was exemplified in Example 21 of the Zimmerman patent. Novartis argued that the claimed invention involved a twofold step over Zimmerman, firstly from imatinib to imatinib mesylate, the salt form, and secondly to the β crystalline form of imatinib mesylate.

On the interpretation of Section 2(1)(j) and (ja) and Section 3, the Court, speaking through Justice Aftab Alam, held that if they are read together, even though a product or a process may satisfy the test of invention under 2(1)(j) and (ja), it may still be held not patentable under Section 3 of the Act.

On Novelty

The Court noted that the salt form was actually claimed in the Zimmerman application itself. Moreover, the acid addition salt forms could be made in a customary manner or in the manner known per se. That apart, Novartis itself had made a Patent Term Extension Application in the US in the Zimmerman patent, in respect of the mesylate form. This was granted for a period of 586 days on the basis that the Zimmerman patent covered the mesylate form. Also, Novartis had sought an injunction against Natco in the UK from marketing the mesylate form. Therefore, the Court observed, that there was no room for doubt that imatinib mesylate, marketed as Glivec, was submitted for drug approval and was covered by the Zimmerman patent.

The Court also observed that the properties of imatinib, namely the in;hibition of tyrosine kinase activity, were also found in the pharmaceutically ;acceptable salt forms, particularly noting that the authors of Cancer Research had concluded that in respect of properties “no significant difference in results could be seen between the two forms of CGP 57148”.12 Similar findings were r;ecorded in an article in the journal, N;ature. The Court, therefore, concluded that it was “unable to see how Imatinib Mesylate can be said to be a new product”, and was in fact covered by the Z;immerman patent.

In order to get over this hurdle, N;ovartis admitted that though imatinib mesylate may have been claimed and therefore covered under the Zimmerman patent, it was not disclosed, as there was no enabling disclosure in the Zimmerman patent. Novartis relied on the decision of the US court of Customs and Patent Appeals in Hogan.13 The Court found that Hogan was rendered in very specific circumstances and later d;ecisions of the US courts had narrowed that down to Hogan’s impact. Additionally, on the basis that the artificial distinction between coverage and dis;closure negated the fundamental rule underlying patents, the argument was rejected.

The β Crystalline Form: Interpreting 3(d)

For the purposes of argument the Court accepted that the β crystalline form imatinib mesylate was new and not obvious.14 Of course, the crucial question before the Court was, whether in view of Section 3(d) as amended, Novartis could be granted a patent on the claimed invention of the β crystalline form of imatinib mesylate.

The Court observed that “in order to correctly understand the present law it would be necessary to briefly delve into the legislative history of the law of patents in the country”. It noted the parliamentary debate during the final amendments to the Patents Act in 2005, with concerns about evergreening in pharmaceutical patents. It recalled that Section 3(d) is directed at these practices.

In interpreting the new provisions, the Court held that the Act provided for the duality of the concepts of invention and patentability. Not all inventions u;nder the Act were patentable, as is i;llustrated by Sections 3 and 4. The Court rejected the submission by Novartis that Section 3(d) was trifling change. It held that different standards are set by the Act for medicines and other chemical substances and that Section 3(d) had been enacted to prevent evergreening.

The Court found that as the β crystalline form imatinib mesylate was a new form of imatinib mesylate, Section 3(d) would apply.

However, Novartis argued that neither imatinib nor imatinib mesylate had known efficacy. Therefore, no comparison could be made of the β crystalline form of imatinib mesylate with a “known substance” with “known efficacy” as r;equired under Section 3(d). This was rejected by the Court on the grounds that it is well established by the Supreme Court itself, as interpreted in Monsanto,15 that the expression “publicly known” was held not to mean that it was widely used to the knowledge of the consumer public, but that it is sufficient if it is “known to the persons who are engaged in the pursuit of knowledge of the patented product or process either as men of science or men of commerce or consumers”.

In examining the efficacy of the different forms of imatinib, that is imatinib free base, non-crystalline form of imatinib mesylate, and the β crystalline form of imatinib mesylate, the Court noted that it was Novartis’s own case that all the properties possessed by the imatinib free base were possessed by the β crystalline form of imatinib mesylate. In the circumstances the Court queried how there could be any enhanced efficacy in the β crystalline form of imatinib mesylate?

In this respect, Novartis filed two affidavits to satisfy the requirements of ;Section 3(d) for consideration.

One of these affidavits stated that on conducting experiments it was found that there was a 30% increase in bio;availability in the β crystalline form of imatinib mesylate as compared to the imatinib free base. The Court noted that it was Novartis’s own case that the product immediately preceding the β crystalline form imatinib mesylate is the non-crystalline form of imatinib mesylate. The non-crystalline form of imatinib mesylate was thus known. The Court found that the comparison with imatinib free base was inappropriate.

The Court therefore held that Novartis was bound to show enhanced efficacy of β crystalline imatinib mesylate over non-crystalline imatinib mesylate, which Novartis had failed to do. Moreover, the Court opined that the bioavailability of the β crystalline imatinib mesylate would be on account of the salt form, that is the non-crystalline form of imatinib mesylate.

Efficacy Is Therapeutic Efficacy

The Court held that the term efficacy in 3(d) has to be understood as the ability to produce the desired or intended ;effect. This would differ in the context of the product, its function, utility or the purpose under consideration. In the context of medicines that claim to cure a disease, it has to be therapeutic efficacy.

Considering the context of 3(d), the Court held that, with respect to medicines, it had to be construed strictly and narrowly in line with language used in the Explanation to 3(d), namely, “differ significantly in properties with regard to efficacy”, therefore, “that 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”.

Thus, holding that the physico-;chemical properties of the β crystalline form of imatinib mesylate contended by ;Novartis to be properties “with regard to efficacy”, namely more beneficial flow properties, better thermodynamic stabi;lity, and lower hygroscopicity, may be otherwise beneficial but cannot be taken into account for the purpose of the test of Section 3(d) of the Act. These properties have nothing to do with therapeutic efficacy.

That left bioavailability and its role in efficacy. There were two rival contentions here. The CPAA argued that in the pharmaceutical field, drug action is explained by “pharmacokinetics” (effect of the body on the drug) and “pharma;codynamics” (effect of the drug on the body). Efficacy is the capacity of a drug to produce an effect, an aspect of pharma;codynamics. The generation of response from the drug receptor complex is governed by a property described as efficacy. Bioavailability, on the other hand, is a pharmacokinetic property. It is the term used to indicate the extent to which a dose of drug reaches its site of action or a biological fluid from which the drug has access to its site of action.

Shamnad Basheer, intervenor-;cum-amicus, argued that safety or significantly reduced toxicity should also be taken into consideration to judge enhanced therapeutic efficacy of a pharmaceutical product in terms of Section 3(d).

While the Court left these submissions untouched, it held that bioavailability by itself may or may not result in its efficacy being affected. In terms of Section 3(d), it must be claimed and established by research data with in vivo animal models, which Novartis had not done. Therefore, the claimed invention, β crystalline form of imatinib mesylate, failed the test of Section 3(d). Thus, Novartis’s appeal came to be dismissed, and the others by the CPAA and Natco allowed.

The Novartis decision has enormous significance. It clarifies the meaning of efficacy in Section 3(d), stating that mere advantages are insufficient. The applicant has to show with in vivo animal models how therapeutic efficacy is significantly enhanced. Crucially, the relentless lobbying by western pharma MNCs to whittle down Section 3(d) has been repelled.


1 The unfinished agenda is now being pursued through the free trade agreements.

2 These deliberations included the Tek Chand and Ayyangar Committees and various Parliamentary Committees.

3 Earlier Parliament had refused to introduce this, as a result of which India was taken to the TRIPS Disputes Council where India lost. India then appealed again. It lost again. Parliament had no choice but to introduce the interim r;egime of EMR to avoid trade sanctions.

4 In 1999 the Patent Act was amended to provide patent protection for foods and medicines. The 2002 amendments were made to amend Section 2(1)(j) relating to invention, add 2(1)(ac) relating to industrial application and 2(1)(ja) relating to inventive step, as also Section 83 relating to general principles. In 2005 apart from amending Section 3(d), amendments were carried to Section 2(1)(ja) and the provision of pre-grant opposition under Section 25(1). As a result of all the amendments India has been able to use TRIPS flexibilities to the maximum. This includes patentability criteria, pre-grant, post-opposition, revocation procedures, counter claim in infringement suits to set aside the grant of the patent, provisions for compulsory licences, government use, etc.

5 The World Health Organization (WHO) and the UNAIDS, amongst others, had appealed to Indian Parliamentarians to keep in mind that India was the pharmacy of the poor in the developing world while making the final amendment (see Sengupta 2013).

6 The Doha Declaration of 11 December 2001 i;ssued by the Inter Ministerial Conference of the WTO recognised the gravity of public health problems and that the TRIPS Agreement has to be interpreted to protect public health.

7 Interestingly the letter from the WHO was signed by the present president of the World Bank Jim Young Kim.

8 Thus, in India the MNCs have, with the local industry formed the US-India Business Coalition, which has issued documents about the need to delete Section 3(d) from the Patents Act.

9 Under the Indian Patents Act any person can file a pre-grant opposition on the grounds indicated in Section 25(1). Post-grant opposition can be filed only by a person “interested”.

10 The study was conducted on rats, but the comparison was with the base form of imatinib and not with the mesylate form of imatinib, which was also known at that time.

11 Madras High Court Writ Petition No 24759 and 24760 of 2006, at para 19.

12 Referring to the imatinib base and the mesylate salt form of imatinib.

13 Application of John Paul Hogan and Robert L Banks, 1977 (559 F.2d 595).

14 The Court did go into the issue of novelty or non-obviousness of the β crystalline form imatinib mesylate. It dealt with the issue of the applicability of Section 3(d).

15 Monsanto Company vs Coramandal Indag Products (P) Ltd, 1986 (1 SCC 642).


Correa, Carlos M (2013): “Is Section 3(d) Consistent with TRIPS?”, Economic & Political Weekly48(32).

NIHCM (2002): Changing Patterns of Pharmaceutical Innovation (Washington: National Institute for Health Care Management).

Sengupta (2013): “Two Decades of Struggle”, Economic & Political Weekly, 48(32).

Waning, Brenda, Ellen Diedrichsen and Suerie Moon (2010): “A Lifeline to Treatment: The Role of Indian Generic Manufacturers in Supplyin

The article appeared in the Economic and Political

Weekly, dated August 10, 2013


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