West should learn from Indias high patent standards SA Aiyar 07 April 2013, 06:03 AM IST The Supreme

Courts denial of a patent for Glivec, an anti-leukaemia drug made by Novartis of Switzerland, has been widely but wrongly hailed by NGOs and castigated by pharmaceutical companies as an attack on patents and a victory for cheap medicine. Actually, the Court fully upheld the principle of patents, but set a high bar for deciding whats innovative and whats mere tweaking. Instead of attacking the verdict, Western countries should raise their standards too. Their overliberal grant of patents has led to the tiniest design changes becoming patentable. This was exemplified by last years ridiculous battle between Samsung and Apple on whether features like a rounded rectangular cellphone screen and finger movements were patentable. Smartphones are a great invention, but hardly justify the grant of as many as 25,000 patents, many for piffling details. Till 1995, India refused to patent drug molecules. But as a consequence of WTO membership, India in 2005 allowed product patents for drugs, but only for innovations after 1995. This meant no patent for Glivec, which was patented first in 1993. To get around this, in 2006 Novartis tried to patent a new variation of Glivec, for which it claimed improved efficacy. Some other countries granted patents for this variation. But the Indian Patents Office rejected the claim as insufficiently innovative. So too has the Supreme Court. Many NGOs hailed the judgment for the wrong reason. The Cancer Patients Aid Association, which led the fight against Glivec, declared: We are happy that the apex court has recognised the right of patients to access affordable medicines over profits for big pharmaceutical companies through patents. False: no such right was recognized by the court. It simply said Novartis had not proved that the new variation was innovative enough. The court clarified that it would grant patents for variations that were more efficacious, but set a higher standard for proof than many western courts do. NGOs are wrong to paint Novartis as a bloodsucker that pauperizes patients. Glivec has saved lakhs of leukaemia patients from death. This is a great boon, and we must encourage more such life-saving boons by granting patents for new drugs. However, this does not mean giving patents for mere tweaking and evergreening of existing drugs through minor variations. Normally, governments promote competition and prohibit monopolies. But temporary monopolies (patents) are justified to promote innovation in drugs and other fields. The patent regime should ensure that the public benefit from innovation far exceeds the cost imposed by monopoly profits. This implies a high bar for granting patents. But the US and other western countries have been giving patents so liberally and broadly that these lead more to lawsuits than innovation, leaving lawyers as the chief beneficiaries . Patents are supposed to spur innovation, but when granted over-liberally they create so much lawsuit risk and cost that they end up hampering innovation, not aiding it. The Economist (UK), no basher of multinationals, acknowledges that over-liberal proliferation of patents harms the public in three ways. First, it means that technology companies will compete more at

the courtroom than in the marketplace. Second, it hampers follow-on improvements by firms that implement an existing technology but build upon it as well. Third, it fuels many of the American patent systems broader problems, such as patent trolls (speculative lawsuits by patentholders who have no intention of actually making anything); defensive patenting (acquiring patents mainly to pre-empt the risk of litigation, which raises business costs); and innovation gridlock (the difficulty of combining multiple technologies to create a single new product because too many small patents are spread among too many players). Patent trolls buy up patents in bulk, typically from bankrupt companies, not for actual use but simply to hit other innovators with lawsuits for patent infringement, forcing them to settle to avoid fat legal bills. One US study estimated such legal costs at $ 29 billion in 2011 alone. Last year, Google bought Motorolas failing smartphone business for $ 12.5 billion, to access its 17,000 patents. Microsoft and others paid $ 4.5 billion for 6,000 patents from Nortel. Most of these will never be used in actual production: they are simply kept as legal weapons for possible lawsuits. This has nothing to do with innovation, which patents are supposed to promote. The Wests over-liberal patent system is broken. It should learn from Indias much tougher system. Patents should be seen as monopolies, to be given sparingly only for genuine innovations where the public benefit clearly exceeds the monopoly cost. This means setting a high bar for innovation. High standards are desirable for patents, as for everything else. Novartis v. Union of India & Others Novartis v. Union of India & Others is a landmark decision by a two-judge bench of the Indian Supreme Court on the issue of evergreening of pharmaceutical patents. The decision is a culmination of a sevenyear-long litigation fought by Novartis for grant of Indian patent on imatinib mesylate in beta crystalline form and thereby to restraint Indian generic pharmaceutical manufacturers from producing drugs based on the compound.[2] The Supreme Court decided that the substance which Novartis sought to patent is known and thus does not qualify the test of invention as laid down in section 2(1)(j) and section 2(1)(ja) of the Indian Patent Act and rejected the patent application. The decision also for the first time tests the validity and ambit of section 3(d) of the Indian Patent Act which prevents the grant of a patent for new forms of known substances, unless the applicant can establish the new form demonstrates an increased efficacy.[3] The decision generated widespread global news coverage and reignited debates on balancing public good with monopolistic pricing, innovation with affordability etc.[4][5][6] The decision also ensured steady availability of low cost generic versions of life saving drugs based on imatininb or imatinib mesylate polymorphs.[7] Background History of Patent laws and pharma industry in India

As part of the Commonwealth, India inherited its intellectual property laws from Great Britain. However, after gaining independence in 1947, there was a growing consensus that to boost manufacturing restrictive product patents must be temporarily removed.[8] In 1970, amendments to the Indian Patents Act abolished product patents but retained process patents with a reduced span of protection. In the 1990s, during Uruguay Round negotiations of the World Trade Organisation (WTO), India pledged to bring its patent legislations in tune with the TRIPS mandate in a phased manner.[9] Consequently, in 1999 India allowed for transitional filing of product patent for grant of exclusive marketing rights with retrospective effect from 1995. Full product and process patent protection was re-introduced from 2005 when all transitional regulations ended.[10] During the absence of any product patent regime, the Indian pharmaceutical industry grew at a remarkable pace, ultimately becoming both a net exporter and the world's third-largest by volume and fourteenth-largest by value.[11] With the new patent system in place, there are fears that this genericsfuelled growth may have led to lower research and development investment and innovation in comparison with multinational pharmaceutical companies based primarily in western developed economies.[12] Prior history of the case In May 2001, TIME hailed imatinib as the "magic bullet" to cure cancer. In the early 1990s a number of derivatives of N-phenyl-2-pyrimidineamine were synthesized, one of which was CGP 57148 in free base form (later given the International Nonproprietary Name imatinib by the World Health Organisation (WHO)). Patent application was filed in April 1993[13] and in 1996 United States and European patent offices granted one of the inventors, Jurg Zimmerman, a patent on behalf of Novartis over imatinib derivatives.[14][15] In 2000, Novartis filed for separate patents on the beta crystalline form of imatinib mesylate (the mesylate salt of imatinib). A United States patent was granted in 2005 following the orders of the US Appellate Court, while the United States Food and Drug Administration (FDA) had in 2001 approved Novartis-marketed imatinib mesylate as Gleevec (U.S.)[16] or Glivec (Europe/Australia/Latin America). TIME magazine hailed Gleevec on a 2001 cover as the "magic bullet" to cure cancer.[17] In 2004, NATCO Pharma Ltd (an Indian generic pharma company) was restrained by Novartis after it was found that NATCO was marketing a generic version of Gleevec in UK in violation of the 1996 Zimmerman patent.[18] The dispute was settled out of court after NATCO pledged to stop marketing its generic version of imatinib mesylate and paid monetary compensation. Novartis could not file not product patent on imatinib or imatinib mesylate in India because when US patent application for imatinib and derivatives was filed in 1993, India did not confer product patents.[19] Thus when the law in India was changing Novartis sought to patent imatinib mesylate in beta crystalline form (a specific polymorph of imatinib mesylate). The patent application was filed in 1998.[20] The application was processed in 2005 once the law in India allowed for product patents.[21] The Assistant Controller of Patents and designs rejected the application on 25 January 2006 as failing to

satisfy requirements for novelty and non-obviousness. As the appellate board was not yet convened, Novartis filed several appeals before the Madras High Court in 2006. The free base form of anti-cancer agent imatinib. Imatinib mesylate is a salt formed by a 1:1 reaction of imatinib and methanesulfonic acid. Before the High Court could decide on the issue of patentability, the Intellectual Property Appellate Board (IAPB) was formed and in 2007 the case was transferred before the IAPB in line with section 117G of the Indian Patent Act. The IAPB on 26 June 2009 modified the decision of the Assistant Controller of Patents and Designs stating that ingredients for grant of patent novelty and non obviousness to person skilled in the art were present in the application but rejected the application on the ground that the drug is not a new substance but an amended version of a known compound and that Novartis was unable to show any significant increase in the efficacy of the drug and it, therefore, failed the test laid down by section 3(d) of the Indian Patents Act.[22] Novartis mounted a separate and concurrent litigation before the Madras High Court arguing that section 3(d) of the Indian Patents Act is unconstitutional. The High Court rejected this writ in 2007 observing that section 3(d) aims to prevent evergreening and to provide easy access to life saving drugs.[23] Novartis did not further challenge this order. After IAPB rejected the patent application in 2009, Novartis appealed directly before the Supreme Court through a Special Leave Petition (SLP) under Article 136 of the Indian Constitution[24]; under normal circumstances, an appeal from IAPB should have been before one of the High Courts before it could proceed to the Supreme Court. However the patent if granted on appeal would expire by 2018 and thus any further appeal at that stage would render the matter infructuous. Considering this urgency and the need for an authoritative decision on section 3(d) (other cases on this issue were pending before various High courts), the Supreme Court granted special leave to bypass the High Court appeals process and come directly before it. Arguments before the Supreme Court Novartis The legal team of Novartis was led by ex-Solicitor General of India Gopal Subramaniam and senior advocate T. R. Andhyarujina.[2] Novartis had attempted to patent imatinib mesylate in beta crystalline form (rather than imatinib or imatinib mesylate), thus they sought to prevent extant literature on imatinib or imatininb mesylate from being considered as prior art. The thrust of the arguments by Novartis' legal team was two-fold: firstly, that the Zimmerman patents and the journal articles published by Zimmerman et al. do not constitute prior art for the beta crystalline form as it is only one polymorph of imatinib mesylate, thereby providing the required novelty and inventive step; and secondly, that imatinib mesylate in beta crystalline form has enhanced efficacy over imatinib or imatinib mesylate to pass the test of section 3(d). To prove novelty and inventive step it was argued that the Zimmermann patent did not teach or suggest to a person skilled in the art to select the beta crystalline form in preference to other compounds of

which examples were given in the Zimmermann patent. Further, even if the beta crystalline form was selected, the Zimmermann patent did not teach a person to how to prepare that particular polymorph of the salt. Having arrived at the beta crystal form of methanesulfonic acid addition salt (mesylate salt) of imatinib, Novartis contended that the inventors had to further research to be able to ensure that particular salt form of imatinib was suitable for administration in a solid oral dosage form. Hence, the coming into being of the beta crystalline form of imatinib mesylate from the free base of imatinib was the result of an invention that involved technical advance as compared to the existing knowledge and brought into existence a new substance. Research was required to define and optimise the process parameters to selectively prepare the beta crystalline form of imatinib mesylate. As the Zimmermann patent contains no mention of polymorphism or crystalline structure, the relevant crystalline form that was synthesized needed to be invented. There was no way of predicting that the beta crystalline form of imatinib mesylate would possess the characteristics that would make it orally administrable to humans without going through the inventive steps.[25] To prove that the beta crystalline form enhanced efficacy over other polymorphs, it was stated that beta crystalline form has (i) more beneficial flow properties, (ii) better thermodynamic stability, (iii) lower hygroscopicity, and (iv) increased bioavailability.[26] Respondents There were seven named respondents who were represented before the court along with two Intervenor/Amicus. The respondents were spearheaded by Additional Solicitor General of India Paras Kuhad.[2] Various arguments were brought before the court but primarily focussed on proving imatinib mesylate in beta crystalline form is neither novel nor is it non-obvious due to publications about imatinib mesylate in Cancer Research and Nature in 1996, disclosures in Zimmerman patents, disclosures to FDA and finally that efficacy as referred to in section 3(d) should be interpreted as therapeutic efficacy and not merely a physical efficacy.[27] The respondents quoted extensively from Doha Declaration, excerpts from parliamentary debates, petitions from NGOs, WHO, etc. to highlight the public policy dimension of arguments in regards to easy affordability and availability of life saving drugs. Supreme Court decision

Supreme Court decided the matter de novo looking into matters of both fact and law. The court first analysed the question of prior art by looking into Zimmerman patent and the related academic publications. On perusal of the documents the court concluded that imatinib mesylate is a known substance from the Zimmermann patent itself. Further its pharmacological properties are also known in the Zimmermann patent and in the published academic articles. Therefore imatinib mesylate

in beta crystalline form does not qualify the test of invention as laid down in section 2(1)(j) and section 2(1)(ja) of the Patents Act, 1970.[28] Court decided to interpret "efficacy" as "therapeutic efficacy" because the subject matter of the patent is a compound of medicinal value. Court acknowledged that physical efficacy of imatinib mesylate in beta crystalline form is enhanced in comparison to other forms and that the beta crystalline form of imatinib mesylate has 30 per cent increased bioavailability as compared to imatinib in free base form.[29] 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) on molecular basis than what could be achieved with imatinib free base in vivo animal model, the court opined that the beta crystalline form of imatinib mesylate, does not qualify the test of Section 3(d).[30][31] Thus in effect, Indian Supreme Court upheld the view that under 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.[32] Support The judgement garnered widespread support from international organisations and advocacy groups like Mdecins Sans Frontires,[33] WHO, etc. who welcomed the decision against evergreening of pharmaceutical patents. It also got extensive coverage from Indian and international media.[34][35][36][37] Most news item contrasted the huge price difference between patented Gleevec of Novartis and the generic versions of Cipla, it further highlighted that the cost of life saving medicine based on imatinib derivatives are going to remain affordable in India.[38] Some commentators have stated that this strict patent requirement would actually enhance innovation as the pharmaceutical companies would have to invest more in R&D to come up with new cures rather than repackage known compounds.[39] Opposition Novartis decided to stop any further investment in R&D in India, Ranjit Shahani, vice-chairman and managing director of Novartis India Ltd is quoted as saying "This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."[40] He also declared that Novartis "will not invest in drug research in India."[41] However such threats have been scoffed at as the R&D expenditure of Novartis India in 2012 constituted roughly 0.03 percent of its entire expenditure in India.[42]