Novartis vs.

Union of India & Other

Contemptory Business Laws – Case Study
Academic Group – 6, PGDM Executive (17-18)

INTRODUCTION
‘Novartis vs. Union of India & Others’ is a landmark decision by a two-judge bench of the Indian Supreme
Court on the issue of whether Novartis could patent its drug Gleevec in India. The decision by Supreme Court
upheld the Indian patent office’s rejection of the patent application, ending a seven year long litigation fought
by Novartis.

The said patent application was filed by Novartis in India in 1998, after India had agreed to enter the World
Trade Organization and to abide by worldwide intellectual property standards under the TRIPS agreement. Prior
to entering into TRIPS agreement India did not grant patents for pharmaceutical and agrochemical products. The
changes allowing the grant of patents on pharmaceutical products finally came into effect in 2005. Until this
time, the Novartis’ patent application waited in the “mailbox” of Madras patent office. India also added an
amendment to Patent Act, 1970 in 2005, just before the patent application was taken into consideration, which
played a key role in rejection of the patent in 2006.

CASE SUBJECT
The 1998 patent application by Novartis claimed invention of the new drug-pill Gleevec (which was a new beta-
crystalline form called ‘imatinib mesylate’ of the existing salt-form imatinib) to treat Chronic Leukaemia and
gastrointestinal tumours. The existing salt-form imatinib was already patented by Novartis in 30 other countries
previously, but not in India. Application also included the way in which molecules are packed into a solid pill,
when the drug is manufactured.

As provided under the TRIPS agreement, Novartis applied for Exclusive Marketing Rights (EMR) for Gleevec from
the Indian Patent Office and the EMR were granted in November 2003. Novartis made use of the EMR to obtain
orders against some generic manufacturers who had already launched Gleevec in India. Novartis set the price of
Gleevec at USD 2,666 (INR 1,26,200 in 2003) per patient per month, while the generic companies were selling
their versions at USD 177 to 266 (INR 8,200 to 12,200 in 2003) per patient per month. Novartis also initiated a
program to assist patients who could not afford its version of the drug, concurrent with its product launch.

When examination of Novartis' patent application began in 2005, it came under immediate attack
from oppositions initiated by generic companies that were already selling Gleevec in India and by advocacy
groups. The application was rejected by the patent office. The key basis for the rejection was the part of Indian
patent law Paragraph 3 (d) that was created by amendment in 2005. That Paragraph 3 (d), specified that
inventions are patentable only if "they differ significantly in properties with regard to efficacy."

In May 2006, Novartis went to Madras High court to file two writ petitions under Article 226 of Indian
constitution;
(1) One, appealing against the rejection of patent by Madras Patents office. High Court ruled against
Novartis as per Paragraph 3 (d) of Indian Patents Act, 1970.
(2) Second, trying to invalidate Paragraph 3 (d) of the Indian Patents Act, arguing that the provision was not
in compliance with TRIPS. It also argued that the provision was vague, arbitrary and in violation of
Article 14 of the Indian constitution. The petition were refused on both counts and Novartis did not
appeal further.
Novartis then started litigation in Intellectual Property Appellate Board (IPAB), thich is the appellate body of
patent controller, where once again the Board ruled against it. Novartis challenged the order by filing special
leave petition before the Supreme Court.
Novartis vs. Union of India & Other
Contemptory Business Laws – Case Study
Academic Group – 6, PGDM Executive (17-18)

The main issues before the two-judge bench of Aftab Alam and Ranjana Prakash Desai in Supreme Court were,
(1) Whether the invention is consistent with the Section 3 (d) of the Indian Patents Act, 1970?
(2) What is the interpretation of Section 3 (d) of the patents act?
(3) Whether the invention qualifies for novelty and inventive-step as per patents act?
Thus, the Supreme Court case hinged on the interpretation of Paragraph 3 (d).

The Supreme Court decided that the substance that Novartis sought to patent was indeed a modification of a
known drug; that Novartis did not present evidence of a difference in therapeutic efficacy between the final
form of Gleevec and the raw form of imatinib; and that therefore the patent application was properly rejected
by the patent office and lower courts.

RELEVANT CLAUSES FROM PATENTS ACT, 1970

Section – 2(1)(j)
Definition - "invention" means a new product or process involving an inventive step and capable
of industrial application.

Section – 2(1)(ja)
Definition - "inventive step" means 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)
Definition - 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 is not an Invention.
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

SUPREME COURT CASE - DETAILS

AFTERMATH AND SIGNIFICANCE

Although the Supreme Court ruled narrowly, fact that the patent application was filed during a time of transition
in Indian patent law, with paragraph 3(d) amended recently into the Patents Act, generated widespread global
news coverage and reignited debates on balancing public good with monopolistic pricing and innovation with
affordability.

The SC judgement came as a huge relief for all the patients who couldn’t afford the lifesaving drugs patented
and manufactured by the Pharmaceutical giants. The price for Gleevac per patient per month in 2003 when
Novartis vs. Union of India & Other
Contemptory Business Laws – Case Study
Academic Group – 6, PGDM Executive (17-18)

Novartis gained EMRs, is approximately INR. 3,35,000 in today's value. Had Novartis won and gotten its patent
issued, the prices for Gleevac would most likely would have stayed at an unaffordable level for majority of
patients in India; it could also have prevented generics companies in India from continuing to sell generic
Gleevec without them paying a reasonable royalty.

The case also made India’s stance on “Ever-greening” of the patented products. Ever-greening of products is use
of various legal, business and technological strategies by which producers extend their product patents which
are about to expire, to continue the market monopoly. In the Novartis case, the Supreme Court explicitly stated
that the intention of the 2005 amendment which led to Paragraph 3 (d) of Indian Patents Act, was to prevent
ever-greening, to provide easy-access for the citizens of the country to life-saving drugs and to complete its
constitutional obligation to provide health-care to the citizens.

Novartis vs. Union of India and others, thus remains a landmark case as an example of the prevention of patent
ever-greening by pharmaceutical manufacturers. Case also had global implications for pharmaceutical firms
investing in R&D for development of new drugs and seeking commercial opportunities. Cases like these all
around the world, were responsible for steps taken globally by WTO, such as Doha declaration on TRIPS.

REFERENCES
https://indiankanoon.org/doc/372733/
https://en.wikipedia.org/wiki/Novartis_v._Union_of_India_%26_Others
https://blog.ipleaders.in/analysis-novartis-g-vs-union-india/
https://indiacorplaw.in/2013/04/decision-of-supreme-court-in-novartis.html
https://en.wikipedia.org/wiki/Evergreening
https://www.lawctopus.com/academike/evergreening-an-abuse-of-the-patent-system/