Decision of the Supreme Court in the Novartis Case

[Vinita Sithapathy, who is a lawyer and
a company secretary, has contributed the following post.
graduated from Government Law College, Mumbai in 2008. She has advised clients
on banking and finance and corporate M&A transactions since 2008. She can
be contacted at
the subject-matter of the post is beyond the usual scope of the Blog, the
significance of the Supreme Court decision justifies its discussion.]
The judgment
rendered by the Supreme Court earlier this week in the case of Novartis AG (“Novartis”) v. Union of India has been
applauded as a landmark one that will help provide millions of people around
the world access to cheaper medicines and prevent pharmaceutical giants from
“evergreening” their patents. While no doubt the effect of the judgment will be
to ensure the availability of affordable life saving drugs to people in India
and elsewhere, the crux of the judgment lies in the fact that Novartis AG was
denied a patent not on account of the pricing of its drugs or its profit motive
but on the basis that the drug that it sought a patent for did not involve an
invention that was patentable under Indian law. The Supreme Court in delivering
its judgment delved deep into various issues including the history of patent
law in India, legislative debates surrounding the now famed amendment to
Section 3(d) of the Patents Act, 1970 (the “Patents Act”), development of the pharmaceutical market in India and
the chemical composition and properties of the beta crystalline form of Imatinib
Mesylate (marketed as Gleevec), the drug which was under consideration for the
The Supreme
Court decision was delivered on a special leave petition preferred by Novartis challenging
the decision of the Intellectual Property Appellate Board, which held that the
drug that Novartis sought a patent for was hit by Section 3(d) of the Patents
Act (“Section 3(d)”) and therefore
was not an invention which could be patented under Indian law. Section 3(d)
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 within the
meaning of the Patents Act.]
Section 3(d)
also contains an explanation stating that:
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
The original
free base form of Imatinib Mesylate is Imatinib, which is patented in the US
and the EU and is referred to as the Zimmermann patent. Imatinib in its free
base form is used for producing Imatinib Mesylate, its pharmaceutically
acceptable salt version. Imatinib Mesylate is further used for producing its
beta crystalline form. Therefore, Novartis contended that in producing the beta
crystalline form of Imatinib Mesylate, there were two inventions involved –
each step of the process being a separate invention.
The Supreme
Court considered the following questions:
(i)        Is Imatinib Mesylate, the salt version
of the free base form of Imatinib, an invention that is patentable under Indian
(ii)       Is the beta crystalline version of Imatinib
Mesylate an invention patentable under Indian law?
In answering the
first question, the Supreme Court made the following observations:
(a)        The application for grant of the
Zimmermann patent in the US specified that the invention related to Formula 1 (being
derivatives of N-phenyl-2-pyrimidne-amine, one of which was Imatinib) and its
compounds. The application further stated that the compounds of Formula 1
included their respective salts. The application also stated that the invention
was in relation to the treatment of tumor in warm-blooded animals by
administering a Formula 1 compound or its pharmaceutically acceptable salt to
such animals.
(b)       The beta crystalline form of Imatinib
Mesylate was later patented in the US in 2005. However, the drug Gleevec was
launched in the market on the basis of the Zimmermann patent itself much before
2005. Novartis’ application before the Food and Drug Administration, USA stated
that the active ingredient in the drug for treatment of patients suffering from
Chronic Myeloid Leukamia was Imatinib Mesylate and that the Zimmermann patent
covered this drug.
(c)        When Novartis applied for a patent for
the beta crystalline form of Imatinib Mesylate in the US, the Board of Patent
Appeals held that there was a presumption that the Zimmermann patent teaches a
person skilled in the art, the manner of use of Imatinib or a pharmaceutically
acceptable salt thereof in the treatment of tumors in warm blooded animals.
(d)       When Natco Pharma Limited marketed a drug
called Veenat 100 in the UK, Novartis issued a legal notice against Natco
pointing out that the active pharmaceutical ingredient of Veenat 100 was
Imatinib Mesylate, which was covered by the Zimmermann patent in Europe.
Based on these
observations the Supreme Court came to the conclusion that Imatinib Mesylate,
the salt version of Imatinib in its free base form is covered under the
Zimmermann patent and is a known substance from the Zimmermann patent.
To rebut this
finding of the court, Novartis argued that the scope of coverage under a claim
in a patent is different from and wider than what is disclosed under the patent
in its specification. In other words according to Novartis, Imatinib Mesylate
was covered under the Zimmermann patent and therefore out of bounds for
production by any person other than Novartis, but since it was not disclosed
under the Zimmermann patent, there was scope for it to be invented and
consequently for it to be patented by Novartis in India. The Supreme Court held
that such distinction if considered acceptable would invalidate the rationale
of patent law. Patent laws allow monopoly to be granted to certain persons in
respect of inventions for a specific period of time on the basis that the
invention be disclosed and made available to the public for their benefit. The
court held that covering undisclosed inventions under a patent would negate the
fundamental rule underlying the grant of patent. The court also held that it
does not wish Indian law to develop in a manner where there is a vast gap
between coverage and disclosure under a patent.
On this basis
the Supreme Court held that Imatinib Mesylate and its pharmacological
properties are known from the Zimmermann patent itself and therefore it is not
an invention that can be patented under Indian law.
The Supreme
Court then went on to answer the second question and observed that the beta
crystalline form of Imatinib Mesylate being a polymorph of Imatinib Mesylate is
directly covered under Section 3(d). Novartis contended that Section 3(d) was
inserted in the Patents Act in its present form out of abundant caution and any
invention that meets the threshold of novelty and inventive step under Section
2(1) of the Patents Act cannot fall within the restrictions of Section 3(d).
Here, the Supreme Court referred to the parliamentary debates in 2005 when
Section 3(d) was amended and observed that Section 3(d) was amended to prevent
abuse of product patents in medicines and agricultural products and to allay
the fears of the opposition that product patents, especially in the
pharmaceutical sector were capable of being abused by “evergreening”. The court
observed that in its opinion, the amended Section 3(d) is meant to especially
cover pharmaceutical products and is meant to set up a second tier of
qualifying standards for patenting pharmaceutical products. This is a very
strong observation by the Supreme Court and clearly all pharmaceutical patents
need to satisfy the Section 3(d) test.
Novartis also
argued that a “conceivable” substance is not necessarily a “known” substance as
required under Section 3(d) and that “known” meant well established and proven
beyond doubt. Novartis further argued that neither Imatinib nor Imatinib
Mesylate had any “known” efficacy in that sense and therefore the question of
enhanced efficacy of the beta crystalline form of Imatinib Mesylate did not
arise. The Supreme Court however rejected this submission and held that even
the term “publicly known” although it may warrant a wider interpretation than “known”
was, in fact, interpreted more narrowly than the construction submitted by
Novartis. On this basis, the Supreme Court held that the beta crystalline form
of Imatinib Mesylate is a form of a known substance (i.e. Imatinib Mesylate)
with known efficacy.
On the question
of whether the beta crystalline version had enhanced efficacy as compared to that
of the salt version of Imatinib Mesylate, the Supreme Court observed that all
the material on record compared the beta crystalline version of Imatinib Mesylate
to the free base form of Imatinib. There was nothing on record to compare the
beta crystalline version with the intermediate salt version. The Supreme Court
also held that enhanced “efficacy” of a medicine should be determined by taking
into account its “therapeutic efficacy”. The Supreme Court further held that
better flow, thermodynamic stability and lower hygroscopicity, while beneficial
do not determine efficacy of a medicine. On the basis that there was no
evidence to prove that the beta crystalline form of Imatinib Mesylate provided
enhanced therapeutic efficacy over Imatinib in its free base form, the court
held that the beta crystalline version failed the Section 3(d) test.
The Supreme
Court came to this conclusion after a detailed analysis of the facts and
circumstances of this case. The court went on to specify that this case should
not be interpreted to mean that Section 3(d) bars all incremental inventions. Keeping
that in mind, it is unfair to criticize this decision as a loss for innovation.
If anything this decision is a sign of strength and indicates that our
judiciary is empowered to see through any attempt at “evergreening” existing
patents and is capable of recognizing a genuine invention from a masked one. The
Court in fact went ahead to note that the marketed package of “Gleevec” specified
that the drug contained Imatinib Mesylate in its salt form and not in the beta
crystalline form. Therefore, it observed that the patent claim appeared to be a
camouflaged attempt to obtain a patent for Imatinib Mesylate, the salt form,
which was not otherwise possible under Indian law.

– Vinita Sithapathy

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.


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