India’s stand on product patents of pharmaceutical inventions has undergone considerable change since inception. The Patents and Designs Act, 1911, provided for product patent protection in pharmaceutical inventions. The Patents Act, 1970, however, did away with product patents for pharmaceutical products.
Process patents could still be obtained, which meant that minor alterations in the synthesis of a molecule could yield new process patents and drugs could be replicated through different methods. This encouraged the production of generic drugs and helped establish India worldwide as a low-cost producer.
In 1995, the Trade-related Intellectual Property Rights (TRIPS) agreement was reached, to which India was a signatory. Article 28 of TRIPS requires member countries to provide patent protection for both products and processes, subject to requirements of novelty, inventiveness and industrial applicability. Patent owners must also have the right to assign, transfer by succession or conclude licensing contracts for their patents.
Adopting the TRIPS regime led to the removal of section 5 of the Patents Act, 1970, which barred patents for substances intended for use as food, medicine or drugs or prepared by chemical processes. By way of an amendment to the 1970 act, India agreed to 20-year patents on pharmaceutical products. This new regime effectively outlawed generic production of new medicines.
In endeavouring to restrict the effects of this new regime, section 3(d) of the 1970 act was amended so that discovery of a new form of an existing substance would not qualify for protection, unless the substance had enhanced efficacy. This in part was India’s answer to “evergreening”, a term used to label the practice in certain jurisdictions of effecting an insignificant change to an existing product and claiming a new invention with the intent of extending the patentee’s exclusive rights over the product.
The Novartis case
Against this backdrop, India’s Supreme Court recently delivered a landmark decision in an appeal by Novartis against the denial of a patent. The case involved Zimmermann’s N-phenyl-2-pyrimidine-amine derivatives, including imatinib, which have had US patents since 1996. In 1998, Novartis applied for a patent on the beta crystalline form of imatinib mesylate, used for the treatment of leukemia. Novartis claimed that the beta crystal form of imatinib mesylate had beneficial flow properties, better thermodynamic stability and lower hygroscopicity than the alpha crystal form of imatinib mesylate, making it a superior product.
In considering Novartis’s appeal, the Supreme Court deliberated extensively on section 3(d) and concluded that for a medicine that claims to cure a disease, the test of efficacy could only be “therapeutic efficacy”, i.e. the capacity of the drug for beneficial change. A mere change of form with properties would not qualify as an enhancement of the efficacy of a known substance.
The court also dealt with “disclosure” and “coverage” of the patent. Imatinib mesylate was covered by the Zimmermann patent but not disclosed in it. The court opined that the law should not develop on lines where there may be a vast gap between the coverage and the disclosure under the patent. The court found that imatinib mesylate is a known substance from the Zimmermann patent itself. Its pharmacological properties are also known in the Zimmermann patent.
Finally, the Supreme Court held that imatinib mesylate does not qualify as an “invention” under the 1970 act.
The judgment will have a positive effect on affordability and accessibility of medicines as generic companies sell the anti-cancer drug at affordable prices. The decision is also a strong statement against evergreening by patentees in India. The higher standard introduced in section 3(d) ensures that no drug with a chemical modification can be patented unless it is therapeutically more effective. After the expiry of the term of patent protection, other entities can enter the market offering competitive prices. The Supreme Court has, however, left open the question of how to interpret “therapeutic efficacy”, inviting further debate on this important issue.
The Novartis decision may lead pharmaceutical giants to take a conservative approach to investing in India. While a developing nation has a responsibility to provide lifesaving drugs at affordable prices, it must also uphold treaties and conventions to which it is a party, failing which it risks sanctions.
Retired Justice Markandey Katju of the Supreme Court has said that a balance has to be struck between monetary inducements for new inventions and making inventions available to the masses in underdeveloped countries at affordable prices.
The balance is both delicate and elusive.
Udwadia Udeshi & Argus Partners is a full-service law firm with offices in Mumbai, Delhi, Bangalore, Kolkata and Chennai. Soorjya Ganguli is a partner and Pooja Chakrabarti is a senior associate at the firm. The views expressed by the authors are personal and do not reflect the views of the firm.
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