The Novartis Decision: A Tale Of Developing Countries, IP, And The Role Of The Judiciary

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By Ahmed Abdel Latif

Much – if not everything – has been said about the health innovation and access to medicines impact of the recent decision of the Indian Supreme Court (SC) in the Novartis case. But there are broader implications. The ruling is also a revealing tale about the changing role of developing countries in the global intellectual property landscape and the growing influence of the judiciary in these countries in the implementation of international intellectual property rules.

The Changing Role of Developing Countries in the Global IP Landscape

The Novartis judgment marks the first time that a decision by a judicial authority from a developing country in the area of intellectual property has been so closely scrutinised and so extensively commented upon internationally. The global media coverage it received is unprecedented.

The decision’s global reach has also been widely highlighted. Nobel Prize winner Joseph Stiglitz and scholar Arjun Jayadev called it a “localized effort at rebalancing the global intellectual-property regime.”1 Others, such as Indian economic journalist Swaminathan Aiyar, have invited the West to learn from India’s much tougher patenting system where patents should be given “sparingly only for genuine innovations where the public benefit clearly exceeds the monopoly cost.”2 Arvind Subramanian, Senior Fellow at the Peterson Institute for International Economics, pointed out that “other developing countries, (…) could be emboldened by the Indian example.”3

The worldwide attention received by the Indian SC ruling and its global implications could represent a turning point. For decades, scholars and students from all over the world spent a considerable time studying decisions by judicial authorities in industrialised countries, in particular those of the US Supreme Court. Several of these decisions marked the emergence of new trends and approaches to intellectual property that, in some cases, would be subsequently incorporated into international agreements and would also heavily influence intellectual property legislations in developing countries. This was the case, for instance, of the well-known Diamond vs. Chakrabarty decision (1980) which was significant in setting the worldwide trend of patenting life forms and in the development of the biotechnology industry. Decisions such as Kirtsaeng v. Wiley & Sons (2013) – and the much-awaited Association for Molecular Pathology v. Myriad Genetics and Bowman v. Monsanto – are more recent examples of this emblematic influence of the US Supreme Court.

The Novartis decision might be spearheading a world where judicial decisions from countries such as China, India and Brazil have an increasing global reach and contribute to shaping global approaches to intellectual property. It is also more generally reflective of the growing assertiveness of developing countries, particularly emerging economies, in the current global intellectual property landscape. In the past two years, opposition from these countries was an important factor in the broader mobilization that led to the de facto demise of the Anti-Counterfeiting Trade Agreement (ACTA).

Some industry officials see in these developments signs of growing hostility on the part of emerging economies toward intellectual property protection. John Castellini, the CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), described the Indian SC ruling as “the latest in a troubling pattern of decisions” adding that “the Gleevec case is not the first case of this type, nor have the Indian Government’s actions been limited to the biopharmaceutical industry.”

However, caution is warranted and sweeping generalisations need to be avoided. It is not clear if the Indian SC ruling will induce countries such as China and Brazil to change their current practices in the area of patenting incremental pharmaceutical innovations. In the case of India, Subramanian underlines that the SC decision and other recent patent cases in India “do not point to categorical hostility to IP protection or to foreigners.” One week after the ruling, India’s Minister of Commerce, Anand Sharma, was at the World Intellectual Property Organization (WIPO) in Geneva to mark his country’s accession to the Madrid Protocol, a key international trademark registration treaty. On this occasion, he made a strong reaffirmation of India’s commitment to intellectual property, while emphasizing the importance of a balanced approach particularly when it comes to access to medicines.

The Role of the Judiciary in the Implementation of IP Norms

The Indian SC decision in the Novartis case also brings into the spotlight the growing role played by the judiciary in developing countries in the implementation of international intellectual property rules.

The TRIPS Agreement provides countries with a number of options and flexibilities to interpret and implement the Agreement in a manner that is consistent with their public policy objectives. The Doha Declaration on TRIPS and Public Health (2001) further affirmed that “the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”

Judicial authorities can be the ultimate arbiter in interpreting how national legislations give effect to TRIPS standards and how intellectual property provisions interplay with public health considerations. This is what the Indian SC did in interpreting section 3(d) of the India Patents Act. In another important judicial decision, the Kenyan High Court found, in 2012, that some provisions of a 2008 Anti-Counterfeit Act could undermine access by HIV-infected patients to life saving generic drugs, and thus threatened to violate their right to life, their right to human dignity and their right to the highest attainable standard of health, guaranteed under the Kenyan Constitution.

The growing role of the judiciary on intellectual property matters in developing countries could also bring changes to the extent these countries are willing to go beyond the minimum standards enshrined in TRIPS. While some governments in developing countries might be susceptible to pressures to accept such demands, judges, who are supposed to play an independent role, might be less amenable to do so and seek rather to strike the right balance between the interests involved, though it is difficult to make generalisations.

In any case, many judges in developing countries do not yet possess the expertise and experience in dealing with complex intellectual property related issues. Thus, many developing countries tend to rely heavily on technical assistance to train their judges. Some industrialised countries have been keen to offer training activities to respond to such needs.

Developing countries need to ensure that the technical assistance they receive in this area is from a diversity of sources, neutral, balanced and tailored to their needs and socio-economic circumstances particularly in terms of public health and access to medicines, as this is not always the case.

Will Developing Countries Lead or Follow in Global IP?

A few years ago, a seminal article raised the following key question: would developing countries lead or follow in intellectual property in the twenty-first century?4 While it might still be premature to answer this question with any certainty, the Indian SC ruling in the Novartis case might prove to be an important milestone in reflecting about it. Clearly, in this instance, a major developing country, India, has chosen to ‘lead’ rather than to ‘follow.’ However, only the future will tell us is if such a choice is ‘exceptional’ as it touches the highly sensitive issue of drugs affordability – which is of great political and social concern in India – or if it is signalling a broader trend.

 

Ahmed Abdel-Latif is Senior Programme Manager for Innovation, Technology and Intellectual Property at the International Centre for Trade and Sustainable Development (ICTSD) and was a Research Fellow with the Science Sustainability Program at the John F. Kennedy School of Government, Harvard University, during fall 2012.

1Joseph Stiglitz and Arjun Jayadev, India’s Patently Wise Decision, Project Syndicate, 8 April 2013.
2Swaminathan Aiyar, West Should Learn from India’s High Patent Standards, The Times of India, 7 April 2013.
3Arvind Subramanian, India’s Disputed Ruling on Pharmaceuticals and Patents, Peterson Institute for International Economics, 4 April 2013.
4 Jerome H. Reichman, Intellectual Property in the Twenty-First Century: Will the Developing Countries Lead or Follow?, 46 Houston Law Review 1115-1185 (2009).

 

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