Rejected Novartis Cases Leave India’s TRIPS Compliance Unchallenged

By Tatum Anderson for Intellectual Property Watch
As Indian lawyers for Swiss pharmaceutical firm Novartis comb through a High Court judgment published today, the question of whether the Indian patent law is compliant with a World Trade Organization treaty remains unanswered.

The judgment, from the Indian High Court in Chennai, threw out two highly contentious cases brought by Novartis against India.

[Editor’s Note: Switzerland announced on 7 August the signing of a memorandum of understanding with the Indian trade minister on the protection of intellectual property rights. Release here].

Novartis had argued that Indian law breaches the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) after an application for a patent on its anti-cancer drug, Glivec, was rejected by the Indian patent office in January 2006.

But after a court case and four months of deliberation, two High Court judges concluded that the Indian courts have no jurisdiction to decide whether the national law is compliant with this international treaty. They also rejected an additional charge that Indian patent law was unconstitutional, vague and arbitrary.

In a hearing document released today, the Honourable Justice (Mr) R. Balasubramanian and Honourable Justice (Mrs) Prabha Sridevan stated: “Since this court has no jurisdiction to decide the validity of the TRIPS, we are not deciding the issue, namely whether the [section of the law in question] is compatible with TRIPS or not.”

When Novartis brought the cases, it focused on Section 3(d) of India’s 2005 Patent Amendment Act, which interprets the TRIPS treaty.

Section 3(d) essentially defines what is patentable in India. However, it was drafted with the prevention of a particular practice in mind: evergreening, where pharmaceutical companies patent frivolous changes to their drugs in order to extend patent protection, thereby preventing generic companies from manufacturing cheaper drugs the poor can better afford.

Specifically, Section 3(d) prohibits a new form of a known substance from being patented unless that new form has considerably better efficacy, a measure of its effectiveness within the body.

The law also contains a list of various derivatives, such as crystalline, salts and esters that should be considered new forms of an old substance. And as such, the Indian patent controller interpreted Glivec as a new form of an older molecule that Novartis first patented in 1993 which therefore did not justify a patent.

Novartis says such a narrow definition does not exist in any other patent law in the world and has prevented a drug which has been patented in almost 40 countries from being patented in India.

Novartis argued that section 3(d) breached Article 27 of TRIPS, which lists various elements that are prohibited from patenting. That list does not include “new forms of existing substances.”

But because the Indian court was not deemed an appropriate forum on TRIPS compliance, the court decided that the WTO dispute settlement mechanism was constituted to deal with TRIPS non-compliance and should therefore hear such a case.

‘Far-reaching Consequences’ but No WTO Case

So, whether 3(d) is TRIPS-compliant might be academic, according to public health advocates like Anand Grover, one of the lawyers opposing Novartis, who represents Indian cancer patients. Advocates are highly sceptical about the possibility that the case might reach the WTO dispute resolution settlement body.

That is because only member states, not companies like Novartis, can refer cases directly to the WTO, and it is highly unlikely that Novartis will be able to persuade Switzerland to take a case against India, they say. [Editor’s Note: Swiss trade minister Doris Leuthard on 7 August said the Novartis ruling “does not concern the Swiss Confederation,” the Geneva newspaper Le Temps reported.]

The case is, after all, highly politically charged. Of the 420,000 people worldwide who signed a petition requesting Novartis to drop the case several included members of the European Parliament and the US Congress, German Development Minister Heidemarie Wieczorek-Zeul, and even former Swiss President Ruth Dreifuss.

[Editor’s Note: The petition was launched by the international medical humanitarian organisation Médecins Sans Frontières. MSF on 8 August delivered the signed petition to Novartis headquarters in Basel, welcoming the fact that Novartis is not planning on appealing the decision.]

They believe that had Novartis won, many pharmaceutical companies would be able to evergreen, preventing cheaper generic from reaching the poorest, not only in India, but developing countries where more than two-thirds of India’s generic medicines are exported.

“This ruling will have far-reaching consequences,” Grover told Intellectual Property Watch. “This order will preserve the Indian pharmacy for the world poor.” He said other countries might follow India’s lead. “It will give an impetus to other countries to adopt similar laws to prevent evergreening,” he adds.

For its part, Novartis says it will have more significant comment on Switzerland and the dispute resolution issue after its legal analysis has been completed. It argues that incremental innovation must be patentable to promote innovation and is supported by the pharmaceutical industry, including some Indian pharmaceutical companies.

The International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) to which Novartis belongs, said Section 3(d) actually also works against public health, because it creates a disincentive for manufacturers to improve drugs – such as those with fewer side-effects – that remain stable without refrigeration in tropical climates or paediatric versions of existing medicines.

Despite this, Novartis will not appeal to the Supreme Court. A spokesperson said, “We feel that our actions have advanced the debate in India and now it is up to relevant political leaders and groups to strengthen India’s patent laws.”

Another Novartis Case in India

However, Novartis’ dealings with the Indian High Court system are far from finished. Last week Novartis filed another writ petition in the High Court in Chennai.

This petition relates to another ongoing wrangle with India over Glivec. When it challenged Indian law, Novartis also appealed specifically against the patent controller’s decision to reject the patent.

It maintained that Glivec did demonstrate sufficient enhancement in efficacy over the old form, to merit a patent under Indian law. Novartis claims Glivec had produced over 30 percent more bioavailability, the amount of drug absorbed in the body, over the original substance.

That appeal against the patent controller’s decision is being heard at a separate body from the High Court, called the Intellectual Property Appellate Board (IPAB).

However, the appeal has also run into problems. One of the board members charged with hearing the appellate case is Dr Chandrashekran, the patent controller that rejected the patent in the first place.

As a result, Novartis has filed a writ petition at the High Court to replace the ex-patent controller on the IPAB board but has received no firm dates for a hearing. The IPAB case, therefore, is stalled until further notice.

Tatum Anderson may be reached at info@ip-watch.ch.