INTRODUCTION

Novartis is a Swiss - American multinational pharmaceutical based in Basel, Switzerland. In

march 1996, the companies Ciba-Geigy and Sandoz merged to form Novartis, the
pharmaceutical and agrochemical divisions of both companies formed.

But Sandoz brand disappeared for 3 years and but was revived in 2003 when Novartis
consolidated its generic drugs business into a single subsidiary and named it Sandoz.

Novartis divested its agrochemical and genetically modified crops business in 2000 with the
spinout of Syngenta in partnership with Astra Zeneca, which also divested its agrochemical
business.

COMPANY PROFILE
Type Public
Industry Pharmaceuticals
Founded March 1996
Founders Johann Rudolf
Alexander Clavel

CEO Vasant Narasimham

Headquarters Basel, Switzerland
Area served World Wide
Revenue $1.63 Billion (2021)
Number of employees 110,000 (2021)
Products Pharmaceutical drugs, generic drugs, over-
the-counter drugs, vaccines, diagnostics,
contact lenses, animal health

Website www.novartis.com

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 PATENT
A patent is a grant from the government that gives the grantee the exclusive right to make, sell,
and use the invention for which the patent has been issued for a set amount of time. Duration
of patent in India is 20 years.

The Indian patent act 1972:

On April 20, 1972, the Indian Patents and Designs Act 1911 was replaced by the Patents Act
1970 and the Patents Rules 1972. The recommendations in the report of the Ayyangar
Committee, which was led by Justice N. Rajagopal Ayyangar, formed the bulk of the Patents
Act. One of the suggestions was to only permit process patents for inventions pertaining to
chemistry, pharmaceuticals, and other life sciences.

What are Inventions?

The definition of an invention that is included in the Act is now compliant with TRIPS's rules.
Novelty, inventiveness, and industrial usefulness are the requirements for patentability.

The term "innovation" is defined as a new product or technique incorporating an innovative

step and suitable for industrial application in Section 2(1)(j) of the Patent Act, 2005.
What are not Inventions?

 A method of agriculture or horticulture

 A mathematical or business method or a computer programmer per se or algorithms
 A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever
including cinematographic works and television productions
 A mere scheme or rule or method of performing mental act or method of playing game
 A presentation of information
 Topography of integrated circuits

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 PRODUCT PATENT AND PROCESS PATENT

Product patent Process patent

It is provided to end product It is provided to process and not for product

Validity is 20 years Validity is 20 years

Monopoly They do not enjoy monopoly

It provides high range of protection It provides low range of protection to the

products

OVERVIEW OF NOVARTIS
In the year 1998, one of the largest international pharmaceutical companies, i.e., Novartis filed
an application for an anticancer drug ‘Glivec’. this drug is famously used in treatment of cancer
and the same is patented in more than 35 countries.

 In the year 2001 Novartis has entered into a partnership with WHO to stem the spread
of malaria in world were the diseases in endemic.
 In the year 2003 the company was granted exclusive marketing rights (EMR) for
Glivec.
 The case was hinged on section 3(d) of the Indian Patents Act. Section 3(d) the
discovery of a new form of a known substance which does not result in the substance
or the mere discovery of any new property or new use for a known substance or of the

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 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.

ISSUES

 Whether Glivec is a patentable product?

The key issue revolved around whether Glivec was a “new product” under the terms of the
law. In January 2006, the Indian patent office ruled that the drug was not substantially
different from one for which patents had already been given in US and Europe. Thus it did
not pass the novelty test, while moving to the new patent regime, Indian lawmakers had
inserted a provision- sec 3(d) in the patents act to check against ‘ever greening’. This is the
term used to describe a practice under which firms slightly tweak an existing process or
product to seek a fresh patent once the original protection expires. This helps them retain
monopoly rights for a longer period.

 Whether its involved Ever-greening?

Patents that are evergreen means that you can benefit from them for a longer period of time.
In terms, patent ever greening refers to the continuing extension of patent rights. It also refers

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to the process of obtaining many patents for the same item. By accumulating patents on
superior versions of existing products, these patents cover many aspects of a single product.
The ever greening of patents means securing wealth from high sales volume for a long time.
The Novartis case is the only historical case that deals with the concept of the perennial.
The supreme court said Glivec does not satisfy a patent’s novelty requirement.

ABOUT GLIVEC

35 nations throughout the world have granted patents. Studies have demonstrated that
Glivecis "nearly ten times more successful than standard interferon therapy," according to
Lee, because of its capacity to target particular cancer proteins. However, "the medicine
simply slows the progression of cancer; it does not provide a lasting cure for it. The
medication mustbe administered for the rest of the patient's life. Due to this and the fact
that 95% of Indians do not have private health insurance, the cost of Glivec is a significant
barrier to access for cancer patients seeking effective therapy. It's crucial to keep in mind
that the trademarked form of Glivec costs far more than its generic equivalent.

Since the medication was a modified version of an already-available medicine, imatinib,

it was an example of "ever greening”. Existing drug reformulations that do not increase
the product's efficacy are not eligible for prolonged patent protection, according to Section
3(d).This clause was added largely to protect the interests of the public health. Sadly, there
are no clear recommendations for businesses like Novartis pursuing second-generation
patents (i.e., extended patents on changes of prior goods), as "neither the Indian patent
statute nor its implementing rules define 'efficacy'". Therefore, the definition of "efficacy"
is crucial to thiscase. The Novartis case is a historic case because it illustrates crucial
concerns about intellectual property protection and access to medications, which will
affect how multinational pharmaceutical company.

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 PRICING

Novartis had priced the Glivec medicine for around 1,00,000/- whereas their competitors who
were Cipla and Natco had priced the same product around 8,000-10,000/- who was helpful for
customers, but affected Novartis company badly.

Novartis had given free Glivec medicine worth $1.7 billion free since 2002 in the name of
patient access programme.

Around 16,000 patients using Glivec in India get it for free, Novartis says by contrast generic
Glivec is used by more than 3,00,000 in India.

WHY PATENT GOT REJECTED?

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In 2006, pursuant to Section 3(d) of the Indian Patent’s Act, the Indian Patents Office rejected
Novartis’ patent application for its drug Glivec, citing that it did not demonstrate any
significant changes in therapeutic effectiveness over its pre-existing form, which was already
patented outside India. In rebuttal, Novartis filed two legal challenges against the Indian
government later that year – one appealing the rejection of its patent request, and the second
contesting Section 3(d) of the Indian Patents Act, claiming that it did not comply with TRIPS,
which India had ratified in 1994. In August 2007, the Madras High Court ruled against
Novartis’s attempt to overturn Section 3(d), and in 2009, the Intellectual Property Appellate
Board in India rejected the company’s appeal against the rejection of its patent application.
Novartis then filed a new case with the Indian Supreme Court, disputing the basis of these
decisions, and the final decision came out in early April 2013.

JUDGEMENT

In 2013, The Supreme Court of India's two-judge panel rejected Novartis' appeal in April
2013 and upheld that Imatinib Mesylate's beta crystalline form is a novel formulation of
the well-known drug, Imatinib Mesylate, whose efficacy was well established. The
Supreme Court made it abundantly plain that Efficacy in section 3d solely refers to
Therapeutic Efficacy in the case of medicines and that all other drug attributes are
irrelevant. The only property directly related to efficacy in the context of medicines is its
therapeutic efficacy.
According to the Supreme Court's decision on the third issue, if sufficient data is
presented, a bioavailability rise of around 30% qualifies as an increase in medicinal
efficacy under section 3d of the Patent Act of 1970. With reference to its flow properties,
better thermodynamic stability, and lower hygroscopicity, the Supreme Court compared
the effectiveness of Beta Crystalline form of Imatinib Mesylate with Imatinib Mesylate
and heldthat none of these properties contribute to an increase in therapeutic efficacy in
accordance with section 3d of the Patent Act, 1970. Novartis also failed to provide any
documentation demonstrating that the efficacy of Beta Crystalline.

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The Hon'ble Supreme Court's ruling prevents the ever-greening of copyrighted products
andprovides assistance to individuals who cannot afford life-saving medications because
these pharmaceutical companies offer these medications at extremely high prices, making
them expensive for the average person. In its ruling, the Supreme Court made it plain that
India is a developing nation and that the lives of 1 billion people depend on the availability
of medicines at a lower cost.
The Patent Act of 1970's Section 3d prohibits large pharmaceutical corporations from
acquiring secondary patents by making small improvements to already existing
technology. Novartis was unable to demonstrate that Beta Crystalline version of Imatinib
Mesylate has greater therapeutic efficacy than Imatinib Mesylate. Thus, the Supreme
Court dismissed Novartis' request for a patent.

CONCLUSION

 The Supreme Court judgement comes as a huge relief for those people who can’t
afford the lifesaving drugs manufactured by these big pharma companies.
 The companies like Novartis are putting life of poor people at stake by
obtaining a monopoly over its drugs.
 However supreme court in its judgement made clear that India is a
developing country and availability of medicines at a cheap price is
necessary for the lives of so many people.
 And also supreme court justified that granting patents only to genuine
inventions as against frivolous inventions.

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