ASSIGNMENT

INTEL
LECTU
AL
PROPE
NOVARTIS A.G.
RTY
RIGHT vs
S
UNION OF INDIA
SUBMITTED BY
SUNISH MONCI CHERUVATHOOR
3/5TH
ROLL NO 89

CONTE
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NTS
 SL. NO INDEX PAGE
1. ABSTRACT 3
2. 1. INTRODUCTION 4
1.1 UNDERSTANDING SECTION 4
3(d) of Indian Patents Act
1.2 INTRODUCTION TO THE 8
CASE
3. FACTS OF THE CASE 9
4. ISSUES OF THE CASE 11
5. OBSERVATIONS AND 12
JUDGEMENTS OF THE SUPREME
COURT
6. CONCLUSION 15
7. BIBLIOGRAPHY 17

ABSTRACT OF THE CASE

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The given assignment gives an insight to an infamous case that paved light on
how the novelty of a part of a product could not be patented in India, as when
compared to its original form. The case runs around the patentability of a
medicinal drug ‘Gleevec’(chemical coumpound- Imatilib Mesylate)
manufactured the Swiss pharmaceutical giant Norvartis.A.G. Jürg Zimmermann
invented a number of derivatives of N-phenyl-2- pyrimidine-amine, one of
which is CGP 57148[1] in free base form (later given the International
Nonproprietary NameImatinib by the World Health Organisation). These
derivatives, including Imatinib[2], are capable of inhibiting certain protein
kinases, especially protein kinase C and PDGF (platelet-derived growth
factor)-receptor tyrosine kinase and thus have valuable anti-tumour properties
and can be used in the preparation of pharmaceutical compositions for the
treatment of warm-blooded animals, for example, as anti-tumoral drugs and as
drugs against atherosclerosis. The Nphenyl-2-pyrimidine-amine derivatives,
including Imatinib, were submitted for patent in the US.The application was
made on April 28, 1994 and patent was granted on May 28, 1996 under US
Patent No. 5,521,184 (hereinafter referred to as the Zimmermann Patent). The
Zimmermanncompounds (i.e., derivatives of N-phenyl-2-pyrimidine-amine)
were also granted a European patentunder Patent No. EP-A-0 564 409.The said
drug was used for the treatment of Leukaemia and hence the Supreme court
refused to grant patent for the slightly changed chemical compound. The
decision comes along the elaboration of Section 3(d) of the Indian Patents Act.

INTRODUCTION

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1.1 UNDERSTANDING SECTION 3-D OF THE INDIAN PATENTS ACT
DEFINITON-
Section 3(d) says that 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 patentable.

Mere discovery of a new form of a known substance which does not result in
the enhancement of the known efficacy of that substance is not patentable.
Which means different forms of a known substance must differ significantly in
the properties with regard to efficacy.

The examiner makes comparison with regard to properties or enhancement of

efficacy between the known substance and the new form of known substance. In
case the new form is further converted into another new form, the comparison is
made between the already existing form and another new form but not between
the base compound and another new form.

The efficacy need not be quantified in terms of numerical value to determine

whether the product is efficacious because it is not possible to have a standard
numerical value for efficacy for all products including pharmaceutical products.

In regard to 'efficacy' in pharmaceutical products, the Madras High Court observed: "going
by the meaning for the word "efficacy" and "therapeutic" ... ..., what the patent applicant is
expected to show is, how effective the new discovery made would be in healing a disease/
having a good effect on the body? In other words, the patent applicant is definitely aware as
to what is the "therapeutic effect" of the drug for which he had already got a patent and what
is the difference between the therapeutic effect of the patented drug and the drug in respect of
which patent is asked for."

"Due to the advanced technology in all fields of science, it is possible to show by giving
necessary comparative details based on such science that the discovery of a new form of a

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known substance had resulted in the enhancement of the known efficacy of the original
substance and the derivatives so derived will not be the same substance, since the properties
of the derivatives differ significantly with regard to efficacy." (Novartis AG v. Union of
India W.P. 24760/06)

Mere discovery of new property of a known substance

A mere discovery of a new property of known substance is not considered

patentable. For instance, the paracetamol has antipyretic property. Further
discovery of new property of paracetamol as analgesic cannot be patented.
Similarly, ethyl alcohol is used as solvent but further discovery of its new
property as anti knocking, thereby making it usable as fuel, can not be
considered patentable.

MERE DISCOVERY OF ANY NEW USE OF KNOWN SUBSTANCE

A mere discovery of new property of known substance is not considered

patentable. For instance, new use of Aspirin for treatment of the cardiovascular
disease, which was earlier used for analgesic purpose, is not patentable.

HOWEVER, A NEW AND ALTERNATIVE PROCESS FOR

PREPARING ASPIRIN IS PATENTABLE.

Similarly, the new use of methyl alcohol as antifreeze in automobiles. The use
of methanol as a solvent is known in the prior art. A new use has been claimed
in this claim as antifreeze which is not allowable. Further, a new use of
Chloroquine for Sarcoidosis (a fungal disease) and for Infectious mononucleosis
(a viral disease) and for Diabetic neuritis (inflammation of nerves) is not
patentable. Mere use of a known process is not patentable unless such known
process results in a new product or employs at least one new reactant. Similarly
mere use of known apparatus or machine for another purpose is also not
considered patentable.

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The term 'significant' cannot be used while interpreting the section because it is
vague (the term varies with regard to the application) Therefore, in order for a
new drug (in respect of which a patent is asked for) to have greater efficacy
when compared to a known drug, the new drug must not be bio-equivalent to
the patented drug i.e. the new drug must lie outside the defined range of bio-
equivalency when compared to the existing drug.

The reason why Big Pharma dislikes Section 3(d) is that it makes it difficult to
get patent rights for new (physical) forms or admixtures of previously known
New Chemical Entities (NCEs) unless these seemingly trivial changes bring
'significant improvement in the efficacy' of the product in question. If
vigorously implemented, Section 3(d) can thwart stockpiling of separate 20-year
patents for multiple attributes of a single product. It is not that the Indian patent
offices haven't granted patents for deserving incremental inventions that are of
real therapeutic value to the patient-consumer. In a review petition filed by Ind
Swift Industries under Section 77 of the Patents Act, the petition called for
review of the Deputy Controller's decision in an unsuccessful pre-grant
opposition to Cadila's application by Ind Swift Industries. Cadila's application
(now a Patent) concerned Crystalline form Clopidogrel Besylate, which is used
to prevent clotting of blood and in treatment of cardiac ailments.

Ind Swift cited a couple of documents on studies which compared the efficacy
of crystalline clopidogrel besylate with clopidogrel bisulphate and clopidogrel
hydrogen sulphate and concluded that there was no "overall significant
difference" in the antiplatelet effect of the crystalline form.

The Deputy Controller however affirmed the decision given in the pre-grant
proceedings based on the material submitted by Cadila during the examination
and opposition proceedings. He endorsed the view taken in the pre-grant order,

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wherein it was held that crystalline clopidogrel besylate "has superior
beneficial properties, which greatly enhance its commercial value".

The value needs to be equated well to get the beneficial effect of final results.
Comparing clopidogrel bisulphate and crystalline clopidogrel besylate, he
observed that the concentration of the inactive metabolite increased over a
period in the former thereby reducing the therapeutic efficacy of the drug. On
the contrary, no inactive metabolite was detected in crystalline clopidogrel
besylate claimed by Cadila, which increased the shelf life of the drug.

On the issue of stability, Deputy Controller observed that the pure crystalline
form remained stable and free-flowing after 2 months even when compared to
solvated forms of crystalline clopidogrel besylate. Also, the pure crystalline
form was found to be less cardiotoxic than the solvated form.

In view of the above, the Deputy Controller held that Cadila's application did
not attract Section 3(d). In this decision, the Deputy Controller avoided, or
probably desisted from discussing numerical limits to be set in understanding
what constitutes "enhanced efficacy". Deputy Controller seems to take an
approach, where a host of characteristics which contribute to enhanced efficacy
of the drug, would be relevant for the purposes of evaluating it on the anvil of
Section 3(d). Importantly, such factors could include enhanced shelf-life of the
drug as opposed to pure therapeutic efficacy of a certain dosage.

If the Section 3(d) is reviewed and amended then a lot of non-patentable

products will squeeze into the Indian market with a monopoly. Till Section 3(d)
is there, global Pharma companies cannot market drugs which are not novel.
Simple physical modifications will not be patentable in presence of Section 3(d)
the pharmaceutical industries reluctant towards further improvement of a known
drug or discovery of new therapeutic use of a known substance. It is clear from

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the above paragraphs and discussions, that pharmaceutical research does not
halt on patenting of one pharmaceutical activity mainly due to ongoing research
the same drug may be found to have other beneficial properties which was
previously unrecognized. Therefore, from the viewpoint of a pharma industry
the exemption of swiss-type claim format in India is unwelcoming and would
rather harm to the Industry.

1.2INTRODUCTION TO THE CASE

BENCH- 1) JUSTICE AFTAB ALAM

2) JUSTICE RANAJNA PRAKASH DESAI

Intellectual property is an intangible form of property while a 'Patent' is a

subset of intellectual property. Granting of a patent provides a statutory right by
the state to the inventor of the invention to exclude others from making, using,
or selling their invention for the limited duration of 20 years. As a previous
British colony, India had inherited its intellectual property regime from Britain.
However, after gaining independence in 1947 product patents were removed
from protection under the patent laws. During the 1990’s, India needed to adapt
its patent legislation to be TRIPS compliant. Therefore, in 1999 India allowed
for transitional filing of product patents with retrospective effect from 1995, and
full product patent protection was re-introduced from 2005, when transitional
regulations ended.  The judgment given by the two judge bench of the Hon'ble
Supreme Court of India in the case of Novartis AG V. Union of India is one the
landmark judgments in India. In this case Novartis challenged the rejection of
its patent application by IPAB for Beta crystalline form of "Imatinib mesylate"
wherein such challenge was rejected by the Supreme Court of India on the
ground that the said drug did not produce an enhanced or superior therapeutic
efficacy as compared to the known substance i.e., "Imatinib mesylate" means

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that the said drug did not involve an inventive step. One of the major reasons for
rejecting the patent application of Novartis was to avoid ever-greening of
already patented products by introducing minor changes.

FACTS OF THE CASE

In 1998, one of the largest international pharmaceutical companies i.e. Novartis

International AG filed an application as per the TRIPS agreement before the
Chennai Indian patent office for the grant of a patent for an anticancer drug
'Glivec' which is used to treat Chronic Myeloid Leukemia (CML) and
Gastrointestinal Stromal Tumours (GIST) invented from Beta crystalline form
of "Imatinib mesylate". This drug is famously used in the treatment of cancer
and the same is patented in more than 35 countries.

When Novartis filed its patent application, the grant used to be restricted to
methods or processes and not for products in India, as defined under section-5
of Patent Act, 1970. After the Patent (Amendment) Act, 2005 section-5 was
repealed and patents came to be granted for methods or processes but also for
products.

In 2005 patent application of Novartis for the drug Glivec was taken into
consideration and the same was rejected by Madras Patent Office on the ground
that the drug was anticipated by prior publication and failed to satisfy the
requirement of novelty and non-obviousness, further stating the alleged
invention as un-patentable under the provision of section-3(d) of Patent Act,
1970 as the said drug did not exhibit any major changes in therapeutic efficacy
over its pre-existing form i.e. Zimmermann patent.

After that Novartis filed two writ petitions in Madras High Court in the year
2006 under Article-226 of Constitution of India. The appeals subsequently

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stated that the section-3(d) of Patent Act, 1970 is unconstitutional because it is
not in compliance with TRIPS agreement and also violates Article-14 of
Constitution of India and the other against the order passed by Madras Patent
Office. Madras High Court transferred the case to IPAB (Intellectual Property
Appellant Tribunal) in 2007. This appeal was finally heard and dismissed by
IPAB stating that the invention satisfied the tests of novelty and non-
obviousness but the patentability of the product was hit by section-3(d) of the
Patent Act, 1970. The judgment given by IPAB is to prevent ever-greening of
already patented product by introducing minor changes and to provide easy
access to the citizens of India to life saving drugs.

After that Novartis filed SLP (Special Leave Petition) in 2009 before the
Supreme Court of India against the order passed by IPAB under Article-136 of
Constitution of India.

ISSUES OF THE CASE

1. According to the provision of section-3(d) of Patent Act, 1970 what is a

known substance?
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 2. According to section-3(d) of Patent Act, 1970 what is the meaning of
Efficacy?

3. According to section-3(d) of Patent Act, 1970 whether increase in

bioavailability qualify as increase in therapeutic efficacy?

4. Whether the invention "Beta crystalline form of imatinib mesylate"

claimed by Novartis is more efficacious than the substance that it was
derived from i.e. "Imatinib mesylate"?

OBSERVATIONS AND JUDGEMENT OF THE

SUPREME COURT

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On the basis of the documents presented , the Court concluded that the prior
patents and literature did count as prior art against the beta crystalline form of
imatinib mesylate, and it therefore did not meet the requirements of an
“invention” as laid down in the Indian Patents Act.

The Court then turned to the argument of efficacy in order to pass the test of s 3
(d). The Court held that “the test of efficacy would depend upon the function,
utility or the purpose of the product under consideration...in the case of a
medicine that claims to cure a disease, the test of efficacy can only be
‘therapeutic efficacy’...With regard to the genesis of section 3(d), and more
particularly the circumstances in which section 3(d) was amended to make it
even more constrictive than before, we have no doubt that the ‘therapeutic
efficacy’ of a medicine must be judged strictly and narrowly”. The Court then
held that the claimed flow properties, thermodynamic stability and
hygroscopicity, whereon Norvartis relied on to overcome s 3 (d), had nothing to
do with therapeutic efficacy. With regard to Novartis’s claims of increased
bioavailability, on the facts, the Court found that the increase in bioavailability
of the beta crystalline form was not in comparison to the known and previously
marketed mesylate salt form of the drug which was soluble, but rather in
comparison to the free base form which was not marketed as it was not highly
soluble. On the facts, increased bioavailability was not proven, and the efficacy
test of s 3(d) was therefore not met. The Court therefore rejected the Novartis
patent application. The Court held that the purpose behind s 3(d) is specific i.e.
“The amended portion of s 3(d) clearly sets up a second tier of qualifying
standards for chemical substances/pharmaceutical products in order to leave
the door open for true and genuine inventions but, at the same time, to check
any attempt at repetitive patenting or extension of the patent term on spurious
grounds..” 

Evergreening:

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It was stated that the primary purpose of s 3(d) as evidenced from the legislative
history, was to prevent “evergreening”. “Evergreening is a term used to label
practices that have developed in certain jurisdictions wherein a trifling change
is made to an existing product, and claimed as a new invention. The
coverage/protection afforded by the alleged new invention is then used to
extend the patentee’s exclusive rights over the product, preventing
competition”.

It can thus be seen that some critics, as was argued in the case at hand, claim
that incremental improvements to existing medicines are trivial, provide
minimal medical advancement and form the basis of the “evergreening”
strategy. Incremental innovation occurs when medicines are improved by
possibly increasing treatment options, dosage options, discovering new uses or
improving properties on existing medicines. However, it can also be said that an
incremental improvement does not affect the patent term of the existing
medicine, as the patent on the first medicine and the patent on the improved
medicine are independent of each other. Thus, once the term of the patent(s) on
the original product expires, any generic manufacturer may begin production
and marketing of that original medicine.

Whilst incremental innovation has been disregarded as trivial by critics, most

innovation is incremental by nature as progression of technology, especially in
the pharmaceutical sector, occurs in steps. What should be borne in mind is that
there is a difference between incremental innovations that confer real
advantages and those that offer no therapeutic improvements. It is important to
differentiate between the two and avoid patents being used as strategic
instruments in competitive practices. The question to be asked is, “When does
an incrementally improved invention of a first patented invention become
eligible for a separate patent?” In this regard, each invention will have to be
examined on its merits based on the usual patenting criteria of novelty and

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inventiveness, and should be able to withstand the scrutiny thereafter. As was
seen in the Novartis case, the Supreme Court held that novelty was not proven
on the facts, and the drug would have failed the patentability test on this basis
alone. Some, as was seen with the Indian legislature’s intention, believe that
additional criteria such as therapeutic efficacy should be used during this
examination for patentability. However, it may be worthwhile to note that
intention of defensive strategy against competitors in the patenting process is
not relevant during the patent grant process or validity of the patent. Post-grant
procedures such as licensing etc may be employed to deal with undesirable
competitive practices.

CONCLUSION

Notwithstanding the compatibility of section 3(d) with TRIPs agreement, it has

been comprehended that the words of the relevant section is inadequate as it

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lacks clarification. The act does not specifically define the scope of enhanced
efficacy nor is there any guidelines stated in that effect. Therefore it is important
to alter the wordings of section 3(d) to clarify the meaning of enhanced efficacy.
However, the significant provisions in TRIPS clearly indicate that member
nations have been given significant flexibilities to frame patent laws which
reflect their social and economic needs. Article 27.1 of the TRIPS agreement
does not provide any definition for the term invention, inventive steps and
industrial application and therefore the member countries are provided
flexibility to establish the criteria of atentability. In the absence of a precise
definition of patentability, there is nothing to prevent the Section 3(d) from
using an “efficacy” requirement, i.e. a higher level of inventiveness for
determining patentability of new forms of known substances. Accordingly, in
order to acquire patent protection in India, the substance has to go beyond
establishing the novelty,inventive steps,non obviousness and industrial
application test set forth in TRIPS agreement and also fulfill the additional
improved efficacy incorporated under section 3(d). It is concluded that Section
3(d) does not violate the TRIPS mandate rather prevents frivolous patenting
without neglecting valuable incremental innovations in pharmaceuticals and is
very well compatible with TRIPS agreement.

The goal of any patent regime is to promote innovation by rewarding the

inventor for disclosing his invention to the public through the award of
exclusive rights for a period of time, thereby disseminating knowledge and
improving the welfare of society. Intellectual property protection is of greater
importance to the pharmaceutical industry as the research and development
process is both costly and time-consuming. The importance of striking a balance
between research and development and access to healthcare for the public is
once again highlighted. The SC judgement comes as a huge relief for those
people who can’t afford the lifesaving drugs manufactured by these big pharma

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giants. These companies who have already made billions of dollars prevent
people from purchasing the drugs at low price thus endangering the very life of
the poor people by acquiring patents over their drugs. The importance of patent
cannot be denied to prevent a new invention provided such invention is
available to all the individuals at a reasonable rate. On the contrary, companies
like Novartis are putting the life of these poor people at stake by obtaining a
monopoly over its drugs. However, the Supreme Court in its judgement made
clear that India is a developing country and the availability of medicines at a
cheap price is necessary for the lives of 1 billion people. The Supreme Court is
thus justified in its decision thereby prohibiting the liberal approach in granting
patents and granting patents only to genuine inventions as against frivolous
inventions.

BIBLIOGRAPHY

1. Legalessays.com
2. Indiankanoon.org
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 3. Blog.ipleaders.in
4. Lectures on Intellectual Property Rights- T. Ramappa
5. Book on Indian patenting system and Patent agent examination- Dr.
Sheetal Chopra
6. Mondaq.com
7. Lexology.com

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