By, Harsh Singh & Arpita Saini

INTRODUCTION

The Supreme Court of India delivered a landmark judgment on 1 April 2013 with the Novartis AG v. Union of India[i] case, in an appeal brought by Novartis, a Swiss-based pharmaceutical giant. The application was made for the grant of a patent for an anti-cancer drug ‘Glivec’. This drug was invented from Beta crystalline form of ‘Imatinib mesylate’, patented in more than 35 countries. The patent application of Novartis was rejected by the Madras Patent Office on the ground that the drug failed to satisfy the requirement of novelty and non-obviousness. The scheme of this article calls for an understanding of the purposive rule of interpretation in the context of this case. A purposive approach is an approach under which courts interpret an enactment in light of the purpose for which it was enacted. It is popularly known as ‘Heydon’s Rule’.

COURT’S ERROR

The Apex court of India was very particular when it came to the analysis of Section 3(d) of the Indian Patents Act, 1970. The Court unequivocally rejected the application of Novartis for granting protection to their beta crystalline form of imatinib mesylate. The holding of the court was backed by the reasoning that:

  1.  The imatinib mesylate in beta crystalline form does not possess any therapeutical efficacy on the users of the drug.
  2.  The term ‘enhancement of known efficacy’ found in Section 3(d) is not vague in nature. The Court strengthened its stand by deriving definition of ‘efficacy’ from Dorland’s Medical Dictionary, which defined it as “the ability of a drug to produce the desired therapeutic effect”.

This reasoning emphasized that, for a discovery of a new form of a known substance to be treated as an invention, it has to be necessarily shown that the new form has better therapeutic effect. The Court further analysed the dictionary meaning of ‘efficacy’, which came out to be as “healing of a disease or having a good effect on the body”. The Court added another layer for a new form of ‘a known substance’ to surpass, in order for it to classify as an ‘invention’. In abstract terms, the court construed the term ‘efficacy’ in a manner which limited its contours to ‘therapeutic’ efficacy, and rejected the concept of ‘enhanced potency’ of the drug as a factor leading to ‘invention’.[ii]

NARROW INTERPRETATION

The Supreme Court of India restricted the meaning of “enhancement of known efficacy” in Section 3(d) to the therapeutic efficacy of the drug. Section 3(d) was introduced as a yardstick to distinguish real innovation from trivial tweaks and the campaign against exponential innovations is largely motivated by the concern of ‘evergreening’ of pharmaceutical products. However, the Court in the case has misunderstood the concept and has perhaps exaggerated its scope. The Court’s narrow interpretation of efficacy deprives producers of the right to acquire patents on a vast majority of highly useful pharmaceutical innovations such as increased bioavailability, longer shelf-life, and reduction of microbial growth on the sole ground that they don’t result in an enhanced healing effect on the body. The literal definition of Section 3(d) of the Act discourages the drug manufacturers from innovation in scientific research, new technology and industrial progress by rewarding the innovation.[iii] The interpretation has been at odds with the views and practices of innovative pharmaceutical companies such as Ranbaxy and Organization of Pharmaceutical Producers of India (“OPPI”) who have publicly stated that incremental innovations like increasing the efficiency of drugs, lengthening the maximal potency and enabling patients to take smaller doses should be granted patent protection if they are new, involve an inventive step and have commercial utility.

THE NEED

The Court also left open the appropriate definition of enhanced therapeutic efficacy to be interpreted in each case. The patent applicant is needed to demonstrate that there is a resulting enhancement in efficacy. The court’s refusal to identify what constitutes sufficient enhanced efficacy leads to great uncertainty for pharmaceutical companies who seek to obtain secondary patents in India in the future. Requiring the manufacturers to prove enhanced efficacy of the drug so early in the development process is impractical since the companies generally seek patents several years before they sell a drug in the market. Although, the Indian Regime stipulates that Indian consumers should pay for only those patented products which represent a genuine advance over older versions, it is important to note that enhanced efficacy’s narrow reference to curative effect will exclude other innovations of improved safety profile and reduced toxicity. The patent regime intends to promote innovation and simultaneously ensure that the fruits of the innovation are accessible to society. The need of the hour, is to find an optimal balance between the needs of the general public and the rights of patent owners.

UPHOLDING THE PURPOSE OF THE ACT

The Indian Patent regime has seen a shift in terms of interpretation. The shift has more or less created a self-devised mechanism to limit ‘patentability’ under the Act. The idea of granting patent has gradually shifted from its erstwhile criterion which were largely based upon the basic premise of ‘non-obviousness’. A joint reading of Sections 2(1) (j) & 2(1) (l) with Section 3 currently determines the ambit of patentability in India, and to a considerable extent shifting from the purpose of the Act and the TRIPS Agreement.

Contrary to the concepts of ‘non-obviousness’, Section 2(1) (ja) has given a new import to the meaning of an ‘Inventive Step’. The intent now seems to be to make the threshold of patentability higher than the existing standard. The explanatory note to Article 27(1) of the TRIPS Agreement, to which India is a party, also states that ‘inventive step’ is synonymous with ‘non-obviousness’. The new definition has certainly raised the standards of the inventions to fall under Section 3(d), given the restrictive application of its explanatory clause. However, it has also limited the scope of inventions and innovations which were primarily based upon the ‘non-obviousness’ criteria. In simpler terms, it is basically stifling innovation.

Laying down the intention of the legislature, it becomes prominent to highlight that the new definition is an impediment to that intention. The purpose of Section 3(d) was to avoid ‘evergreening’ of products, which was being fulfilled by the criterions of ‘non-obviousness’. The current standards have done nothing but limit the scope of the Patent in the hands of few manufacturers, thereby defeating the very idea of avoiding ‘evergreening’.

In a nutshell, the Apex Court has misinterpreted the definitions of ‘efficacy’ and ‘enhancement of known efficacy’, which has had a deeming effect upon this piece of legislation.


[i] Novartis AG v Union of India, (2013) 6 SCC 1 (India).

[ii] Mohammad Suleman Palwala, A Study On: Novartis AG v. Union of India, (Jul. 17, 2019), http://www.mondaq.com/india/x/826478/Patent/A+Study+On+Novartis+AG+v+Union+Of+India.

[iii] Frederick M. Abbott, The Judgment In Novartis v. India: What The Supreme Court Of India Said, Intellectual Property Watch (Apr.04, 2013), https://www.ip-watch.org/2013/04/04/the-judgment-in-novartis-v-india-what-the-supreme-court-of-india-said/.

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