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The landmark judgement of the SUPREME COURT striking down the application of Novaritis AG for the grant of patent on an anti cancer medicine, GLIVEC, has been hailed as an important step in putting the interests of the consumers ahead of the profits of the big pharmaceutical firms. Incremental improvements of existing products to secure patents are a menace to innovation.

The ruling will allow generic firms to market their version of the medicine at a price 15 times lower than that charged by Novartis.

Brief facts:

Novartis applied for a patent in India for an anti cancer drug by the name of Glivec . Even before the application was taken up for consideration, it attracted 5 pre-grant opposition proceedings from Cancer Patients Aid, Natco, Ranbaxy, Cipla & Hetro Drugs. On December 15, 2005, Assistant

Controller of Patents heard all 5 proceedings together and rejected patent application by Novartis.

Controller held that the invention claimed by the appellant was anticipated by prior publication, i.e., the Zimmermann patent; that the invention claimed by the appellant was obvious to a person skilled in the art in view of the disclosure provided in the Zimmermann patent specifications; and further that the patentability of the alleged invention was disallowed by section 3(d) of the Act.

Novartis challenged the Controller’s order before the Madras High Court in 5 writ petition and filed 2 separate writ petitions challenging constitutionality of Section 3(d) of the Patents Act. Once the High Court dismissed the writ petitions challenging 3(d), Novartis did not prefer any appeal to the Supreme Court. The other bunch of 5 petitions were transferred to Intellectual Property Appellate Board (IPAB) for adjudication.

IPAB reversed Controller’s decisions in all 5 petitions to the extent that Novartis invention satisfied the tests of novelty and non-obviousness. The IPAB, however, held that the patentability of the subject product was hit by section 3(d) of the Act. In an unprecedented manner, and with the Consent of the parties to save considerable time, Their Honours in the Supreme Court decided to hear the appales against the IPAB order though the Appellate Court was Madras High Court.

The 5 Objectors stated before the SC that the TRIPS agreement has sufficient flexibility for Member States to control Patent rights to guard against adverse impact on public health.

The SC also noted that amended portion of section 3(d) clearly sets up a second tier of qualifying standards for chemical substances/ pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds.

Furthermore, the Bench also noted that the Zimmermann patent, Novartis applied for, and in several cases obtained, patent in the US not only for the beta and alpha crystalline forms of Imatinib Mesylate, but also for Imatinib in a number of different forms. Novartis, however, never asked for any patent for Imatinib Mesylate in non-crystalline form, for the simple reason that it had always maintained that Imatinib Mesylate is fully a part of the Zimmermann patent and does not call for any separate patent.

This factor also played a crucial role before the Bench since Novartis maintained in the Indian application that Glivec was a new substance and took a contrary position to earlier patent applications while sending a cease and desist letter to Natco.When Novartis cited foreign rulings in support of the arguments, the Bench held as following:

“In this country the law of patent, after the introduction of product patent for all kinds of substances in the patent regime, is in its infancy. We certainly do not wish the law of patent in this country to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”

Finally, in paragraph 164 of the judgement, SC has stated that while going through the Zimmermann patent one cannot but feel that it relates to some very serious, important and valuable researches. The subject patent application (Glivec), on the other hand, appears to be a loosely assembled, cut-and-paste job, drawing heavily upon the Zimmermann patent.

The Act

Glivec, is simply a new form of imatinib and hence not patentable as per Section 3 (d) of Indian Patent Act.

Section 3(d) of the Indian Patent Act : This section states that inventions that are mere "discovery" of a "new form" of a "known substance" and do not result in increased efficacy of that substance are not patentable. This implied that India did not support patents for inventions which were minor modifications and prevented undue monopoly during the extended period of patent protection by the company.

Finding out a new property or a mere new use of a known substance is not patentable.Similarly,finding a mere new use of a known device/apparatus without any additional inventive ingenuity in the said machine/apparatus is also not patentable invention. Further ,finding out of any new form of a known substance is also not patentable unless it is substantiated with the evidence of enhanced efficacy as compared to the known original substance.

Chapter II of the The Patents Act, 1970 on 'Inventions not patentable' reads as:

3. What are not inventions:-

The following are not inventions within the meaning of this Act:

(a) an invention which is frivolous or which claims anything obviously contrary to well established natural laws;

(b) an invention the primary or intended use or commercial exploitation of which could be contrary public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment;

(c) the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature;

(d) the 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.

Explanation: For 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 efficacy;

(e) a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance;

(f) the mere arrangement or re-arrangement or duplication of known devices each functioning independently of one another in a known way;

(g) Omitted by the Patents (Amendment) Act, 2002

(h) a method of agriculture or horticulture;

(i) any process for the medicinal, surgical, curative, prophylactic diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products.

TRIPS agreement versus local laws:

The most crucial aspect which weighed in before Their Honours at the Bench was the contribution which the manufacturers of Indian generic industry had made world over to supply life saving drugs to poor countries. Two letters which the Bench quoted are relevant as well. One was dated 17 December, 2004, from Director, Dept of AIDS at WHO writing to Union Health Minister stating that WHO is aware that TRIPS compliance was important but also is most important that India continues to export cheaper medicines to not only Member States but also countries which are poor. Some countries which WHO mentioned where India is a massive supplier of cheap anti cancer life saving generic drugs were Ghana, Lesotho, Malawi, Namibia, Bangladesh, etc.

Another letter was from UNAIDS asking India to make sure that the Patent regime after complying with TRIPS does not restrict / undermine

India’s position as a leader in supplying affordable life saving drugs to countries that do not have manufacturing capacity to manufacture such drugs.

It is, therefore, a fallacy to say that Indian Patent Act is not in consonance with the requirements under TRIPS or that Courts were not mindful of the R&D and charities done by Novartis. However, at the end of the day, courts will have to interpret provisions of Patent Act keeping India as a jurisdiction because Patent provisions, unlike trademarks and copyright, are not enforceable internationally.

In Glivec ruling, SC has displayed an excellent and pragmatic approach in dealing with one of the most complicated branches of law. The judgement, apart from being excellently sound in law, is written in such an elaborate manner that any person with even basic knowledge about patent law can understand and appreciate it.


The key message the judges conveyed through their ruling is that minor modifications of proprietory products does not qualify for the grant of patent rights. By doing so they endorsed the provisions of section 3(d) of the Indian Patents Act that was explicitly introduced to prevent a patent being granted on a product that was a mere discovery of a new form of a known substance not resulting in the enhancement of the known efficacy of the substance.


The motivation of the law makers behind introducing section 3(d) was two fold. The first being that patent holders should not be allowed to extend rights over existing proprietory products by claiming minor improvements. The lawmakers were keen to ensure early entry of generic firms in the production of products whose patents had expired. This results in a steep reduction in the price level of the patent –expired products. The second motivation was to strengthen the basis for innovation in critical areas such as pharmaceuticals. Granting patents for minor improvements of existing products would discourage those in the development of genuinely innovative products. Global community have agreed to increase the incentives for innovation by enhancing the rights of the patent holder including by extension in the term of patent rights to 20 years. This was, in part due to the assertion by pharmaceutical conglomerates that development of new molecules was an expensive venture requiring more than $1 billion of investment. The apex court ruling is therefore a step in the right direction to motivate new innovators.

The Federal Trade Commission (FTC) ,the agency responsible for safeguarding consumer interests in the US by preventing anti competitive business practices in the market place ,has been engaged in a battle with the pharmaceutical firms that buy-off generic producers to delay introduction of a generic version of a patented drug.FTC estimates show that by delaying the entry of cheaper generics ,pay-for- delay cost deals cost American consumers almost $3.5 billion annually.

Proprietary firms have often defended their behavior arguing that the cost of bringing a new pharmaceutical product in the market is prohibitive and they needed mechanisms such as pay-for-delay deals to recoup their investment. In other words, these firms insist that the consumers should continue to pay high prices for the products they develop, even when there are possibilities of producing affordable generics.

This raises a fundamental question about the model for pharmaceutical research adopted by big pharmaceutical firms.

Firms that are developing life saving medicines argue they can continue to make their contribution only when they are allowed to charge extraordinarily high prices for their products. When product prices are pegged at such high levels, an overwhelmingly large proportion of the consumers, particularly in the developing world, are denied access to these “breakthrough” cures.

Patents are thus causing moral hazards ,reasons being as follows:

i) A public policy instrument designed to ensure that investors get the incentives to produce useful products for the citizens have now become a mechanism to promote private profits rather than public welfare.

ii) Evidence is wearing thin that in their present form patent monopolies are promoting innovation.

The protection of IPR is considered essential for the promotion of technological, industrial and economic development of a country, as it provides incentives to the inventor and ensures adequate returns to the industry on the investments made by commercialization of the inventions. At the same time the industrialized countries ,in majority of cases ,use such protection for creating monopolies and to eliminate or reduce competition.

Therefore, IPR may at times lead to the conflict of public and private interests such as controlling the prices of essential goods ,development of technology and protection of domestic industries against foreign monopolies. In most cases the patent law of a country seeks to balance the public and private interests.

By Suhita Mukhopadhyay

Company Secretary

The Calcutta Stock Exchange Limited 


Published by

CS Suhita Mukhopadhyay
(Company Secretary)
Category Others   Report

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