The Supreme Court upheld the rejection of Novartis' patent application for the drug Glivec. The court found that the beta-crystalline form of imatinib mesylate did not result in enhanced therapeutic efficacy over existing forms of the drug as required by Section 3(d) of the Indian Patent Act. The court also held that Section 3(d) was not unconstitutional as it aims to prevent "evergreening" of patents and promotes access to affordable life-saving drugs for Indian citizens. Novartis' appeal argued the provisions were vague and violated intellectual property rights, but the court disagreed and affirmed the patent rejection.

1. Novartis V. Union of India (2013) 6 SCC 1
Nancy Garg

2. BASIC DETAILS OF THE CASE
● Court: Supreme Court of India
● Full case name: Novartis v. Union of India & Others
● Decided on 01 April, 2012
● Citation(s): Civil Appeal No. 2706-2716 of 2013
● Case opinions: Upheld the rejection of the patent application (1602/MAS/1998)
filed by Novartis AG for Glivec in 1998 before the Indian Patent Office
● Judges sitting: Aftab Alam, Ranjana Prakash Desai
● Decision by Mr. Justice Aftab Alam

3. • Section 3(d)
• Efficacy
• Therapeutic efficacy
• Patentable subject matter
• Patentability
• Invention, novelty, inventive step
• Incremental innovation

4. INTRODUCTION
• India has been at the forefront of creating an alternative patent law model that has since been emulated
by many developing countries.
• The Patent System in India is governed by the Indian Patent Act, 1970 which has seen several
amendments and the latest amendment was in 2005. Grant of a patent provides exclusive rights to the
patent holder to make, practice, sell, license the patented invention for a period of 20 years.
• On 1st April, 2013, the Supreme Court passed a landmark judgment in Novartis AG v Union of India,
where Novartis challenged the rejection of its patent application Beta Crystalline form of “Imatinib
mesylate”.
• The Supreme Court rejected the challenge as the drug did not produce any enhanced or superior
therapeutic efficacy and on the grounds the there was no innovative step involved. The other major reason
for the rejected of the challenge made by Novartis was to prevent the evergreening of already patented
drugs.

5. Efficacy and section 3(d) of the Indian Patent Act
● Section 3(d) of the Indian Patent Act states that “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.”
● Section 3(d) of the Indian Patent Act, gives important to the term ‘efficacy’, however,
does not elaborate it much.
● According to the Oxford English Dictionary, ‘efficacy’ can be defined as the potential
of a drug to produce desired therapeutic effect. The Madras High Court observed that
‘efficacy’ with respect to pharmaceutical product defined it as effectiveness of a newly
discovered drug in relieving from the disease and producing the desired effect on the
patient body. The court observed that applicant seeking patent for the novel drug had
to bring out difference between the present drug and the patented drug about its
therapeutic efficacy.

6. Novartis InternationalAG is swiss MNC
based in Basel, Switzerland is 3rd largest
beneficiary of registered patents in
India.
The case of
Novartis
Anticancer drug
Glivec in India

7. BACKGROUND - FACTUAL
● Novartis, the Swiss Company (Appellants) had filed in Chennai Patent Office a patent
application for Imatinib Mesylate in the beta crystalline form on 17th July 1998 claiming July
18, 1997, as the priority date from Switzerland. At that time there was a different patent
regime in India and therefore the appellants had made a mailbox application for which they
got a grant of Exclusive Marketing Right on 10th November 2003 for a period of 5 years, and
grant of a patent would be considered later.
● When the grant of the patent was considered after January 1, 2005, the patent application
attracted 5 oppositions under Section 25 (1) on the grounds of not being novel, being
obvious, and also being barred under Section 3(d).
● The Assistant Controller of Patents and Designs before whom all the opposition matters
were heard all the parties and rejected the appellant’s patent application on the ground that
the claimed invention was already foreseen by an earlier publication, the Zimmermann
patent; and therefore the invention was obstructed by the section 3(d) of the Act.

8. BACKGROUND - PROCEDURAL
● The Appellants challenged the orders of Assistant the Controller by filing writ petitions in the High
Court of Madras. Two other writ petitions were also filed by the Appellants seeking that Section 3(d) of
the Act is unconstitutional as it violates Article 14 of the Indian Constitution and that it does not comply
with “TRIPS”.
● After the constitution of Intellectual Property Appellate Board, the five writ petitions that challenged the
orders of the Assistant Controller were moved from Madras HC to IPAB. The two other writ petitions
which challenged Section 3 (d) were heard in the HC and subsequently dismissed by the judgment
delivered on 6th August 2007. It was observed by the HC that the main purpose of Section 3 (d) was to
avert evergreening; to give easy access to residents of the nation to various life-saving medications and to
fulfil their commitment of providing quality healthcare service to the citizens of the country. This matter
was not appealed any further.
● The other appeals before IPAB were heard and dismissed on 26th June 2009. The findings of the IPAB
were opposed to that of the Asst. Controllers’ on the aspects of anticipation and non-obviousness, but it
concurred that the patentability of the subject was affected by Section 3 (d) of the Act. The IPAB noted
that India has a higher standard of the requirement of inventive steps by establishing Section 3(d) of the
Act. The IPAB also made observations in relation to the high pricing of the drug. Hence, The IPAB
refused the product patent to the beta crystal form of Imatinib Mesylate. The decision of the IPAB was
challenged by the appellants before the Supreme Court in the current matter.

9. August 2009: Novartis approached the Supreme Court of India.
2005: India introduced the Indian Patent Act preventing frivolous patents.
January 2006: The Patent Controller in Chennai denied Novartis a patent.
May 2006: Novartis challenged the Indian government and four other companies in
the Madras High Court.
August 2007: The Madras High Court ruled against Novartis's case.
June 2009: The Intellectual Property Appellate Board rejected a fresh appeal.
1997: Novartis filed a patent application in India for its drug Glivec.

10. LEGAL ISSUES RAISED
● Whether the new invention ‘Imatinib Mesylate’ can be qualified to be a
new patentable product?
● Whether the new product included any advancement in technology or
pre-existing knowledge so that it comes under the category of non-
obviousness?
● Whether the provisions of Section 3 (d) will be violated if the Patent is
granted to the new invention?
● Whether Section 3 (d) is in violation of the provisions under TRIPS and
also Section 14 of the Constitution of India?

11. ARGUMENTS ON BEHALF OF THE PETITIONERS
● Novartis contented that there is no clarity as to what constitutes “enhancement of efficacy” and
“significant enhancement of efficacy” as required; therefore, the law is vague and led itself to arbitrary
decision.
● Novartis challenged the IPAB’s finding on Section 3(d). They argued that this provision related to
“discoveries” doesn’t apply to its patent application which satisfies the criteria of novelty, inventive step
and industrial application and is an “invention” under Section 2(1) (j) of the Patents Act, 1970.
● Furthermore, they argued that the IPAB’s holding paid no attention to the fact that they held the beta-
crystalline is an invention and passed the novelty test and then they applied Section 3(d), relating to
discoveries and refused to grant a patent to Novartis invention.
● Disputing the IPAB’s holding that the term “efficacy” means therapeutic efficacy, they argued that one
term in the statute could not have two different meanings. It was only the beta crystalline form of
imatinib mesylate that had therapeutic effect unlike the original forms.
● They pleaded that improved biodiversity and thermodynamic stability are properties that improved
efficacy and the beta crystalline form of imatinib mesylate manifested both these properties.
● Section 3(d) could only be applied for substances already in existence and urged that such efficacy had
never been established for imatinib, it is not possible to demonstrate enhanced efficacy of the beta-
crystalline form of imatinib mesylate.

12. ARGUMENTS ON BEHALF OF THE RESPONDENTS
Various arguments were brought before the Apex Court but the focus was on proving
that:
● Beta crystalline form of imatinib mesylate is neither new (novel) nor is it non-
obvious due to publications about imatinib mesylate in Cancer Research and
Nature in 1996, and that the efficacy as referred in the section 3(d) should be
interpreted as therapeutic efficacy and not just physical efficacy.
● The respondents also quoted extensively from the Doha Declaration, they took
excerpts from parliamentary debates, various petitions by NGOs, WHO, etc. to
highlight the public policy dimension of the arguments relating to easy
affordability and availability of life-saving drugs.

13. LAW APPLIED
Section 2 (1) (j) of the Patent Act, 1970
This provision defines the expression
‘invention’ as “a new product or process
involving a new product or process involving
an inventive step and capable of industrial
application.”
Section 2 (1) (ja) of the Patent Act, 1970
This provision defines “inventive step” as “a
feature of an invention that involves
technical advance as compared to the
existing knowledge or having economic
significance or both and that makes the
invention not obvious to a person
skilled in the art.”
Section 3 (d) of the Patent Act, 1970
“3. What are not inventions – The following are
not inventions within the meaning of this
Act-
(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 regard
to efficacy.”

14. POINTS OF SIGNIFICANCE
● Provisions like Section 3(d) of the Indian Patens Act provide an operational tool for
judges to prevent the patenting of incremental changes of existing products.
● Efficacy may be used as a criterion for examining the notion of “invention”/”patentable
subject matter”. Alternatively, it may also be used in the context of the novelty or
inventive step examination.
● In the absence of an express provision comparable to Section 3(d) of the Indian
Patents Act, judges may nevertheless have recourse to the criterion of efficacy. In the
case of product derivatives, similar chemical structures of the original and the
derivative product will usually set a presumption of obviousness, which may only be
rebutted by showing surprising effects of the derivative such as enhanced efficacy.

15. POINTS OF SIGNIFICANCE
● The interpretation of the term “efficacy” will be decisive in this context. TRIPS leaves
Members free to define efficacy in a broader sense (including non-therapeutic/physical
efficacy, such as improved methods of drug administration) or in a narrow sense, as
applied by the Indian Supreme Court (limiting the definition to therapeutic efficacy).
Many drug derivatives will pass a broad test of physical efficacy, while failing a test of
therapeutic efficacy.
● Improved bioavailability does not necessarily result in improved therapeutic efficacy.
● If the claims of an existing patent are interpreted widely to extend the scope of the
patent to the greatest possible extent (e.g. in infringement litigation), this wide scope
may be used by competitors to challenge the patentability of follow-on patents on
derivatives of the patented product.

16. EVERGREENING
● “Evergreening,” is referred to the practice whereby pharmaceutical firms extend the
patent life of a drug by obtaining additional 20-year patents for minor reformulations
or other iterations of the drug, without necessarily increasing the therapeutic efficacy.
However it has become a practice in the pharmaceutical industry where on one hand
innumerable patients struggling to afford the high priced patented drugs, while on the
other hand innovators struggling to give immortal value to their creation.
● The court said that the aim of the patent system is to discourage the extension of the
patent after the expiration of the patent term of twenty years so that other firms can
produce and market the drug. The Court said that the Amendment was intended to:
 Preventing ever-greening;
 To provide easy access to the denizens of this country for life saving drugs; and
 To discharge their constitutional obligation of providing health care to its citizens.

18. Judicial
Interpretation
● The court observed that even though beta crystalline could be
considered a ‘novel’ invention, it did not pass the test of
enhanced efficacy as laid down in section 3(d) of the Indian
Patents Act. This formed the ground of rejection of the patent
application of Novartis. Section 3(d) clearly specifies that a new
form of a known substance in not patentable under Indian law
unless it enhances its known “known efficacy”.
● The term ‘efficacy’ in section 3(d) was interpreted by the court
referring to ‘therapeutic efficacy’. The court said that Novartis
should have shown enhanced therapeutic efficacy beta
crystalline over imatinib mesylate. Novartis argued that the
physico- chemical properties of the polymorph form of the
imatinib molecule, i.e., better flow properties, better
thermodynamic stability and better and lower hygroscopocity,
resulted in improved efficacy and hence is patentable under
Indian Law. These all were considered as meaningless with
respect to efficacy as they did not provide any therapeutic
efficacy to the drug.

19. Critical Analysis
● The answer to the issues raised in this case depended on the chances of the appellant to get
the Patent applied for i.e. Imatinib Mesylate. According to the definition of a ‘new
invention’ in the Indian Patents (Amendment) Act, 2005, it is laid down that no invention
which has been anticipated by any publication or taken in use in any part of the world
before the date of filing of the application for patent which should include complete
specification. In other words, it’s not a part of the public domain and also does not form a
part of the State of the Art under Section 2 (1) (l).
● Deciphering ‘inventive step’ as under Section 2 (1) (ja) of the above act, it means that the
invention should include a technical advance when compared to the knowledge existing
presently, or should attain an economic significance, or both which should ultimately make
that invention as not obvious to any person who is skilled in that art.
● Therefore, it can be derived from the above-mentioned definitions that any pre-existing
thing or knowledge cannot be patented.

20. ● Section 3 (d) is important to note here as it prohibits the grant of Patent to any kind of derivative made out
of known substances, but the exception is that such derivatives must show an “enhanced efficacy.” Now, post
2005 amendment, it is required under Section 3(d) that the invention for which a patent claim has been
filed, shall be more efficacious than the ‘known substance’ out of which the newly claimed invention has
been derived.
● In the present case, the Appellants thought that it would be easier to prove greater efficacy for ‘Imatinib Free
Base’ which is to be identified as the ‘known substance’ instead of ‘Imatinib Mesylate’. But the problem
arises, as this was preceded by prior art & subsisted before the claimed invention, and therefore, it would
come under the category of ‘known substance’.
● While rejecting the argument of Novartis for a broader interpretation of the term ‘efficacy’, SC made it clear
that it only included ‘therapeutic efficacy’. It was made clear that only those properties are relevant that
directly connect to efficacy and not all advantageous or beneficial properties, and in cases of medicine, it is
therapeutic efficacy.
● On the issue of Bioavailability, it was said that it is the growth potential of a drug to dissolve in the
bloodstream of a patient. It was decided that protection can be given under Section 3 (d) in case of a growth
of 30% in bioavailability, also, if it can be proved that such increase can lead to greater therapeutic efficacy.

21. Judgment
● The Supreme Court held that the beta form of Imatinib Mesylate
was not an invention as it was obvious from the teachings of
Zimmermann’s Patent for the free base form of Imatinib Mesylate,
and its properties were also known. Thus, it did not meet the
requirements of “invention” as mentioned in Section 2(1) (j) and
(ja) of the Patent Act, 1970. It was further held that the beta
crystalline form of Imatinib Mesylate being a pharmaceutical
substance and moreover a polymorph attracts Section 3(d) of the
Act.
● The Court interpreted the expression ‘efficacy’ under Section 3(d)
of the Act, to be therapeutic efficacy meaning ability of the
medicine to cure the disease. Hon’ble Justice Aftab Alam in his
decision opined that the beta crystalline form of Imatinib Mesylate
had failed the requirement of enhancement of efficacy in Section
3(d) and is thus, not patentable. Therefore, the Court while
dismissing the appeals stated that the beta crystalline form of
Imatinib Mesylate failed in both the tests of invention, as under the
clause (j) (ja) of Section 2(1) and patentability, as under the clause
Section 3 (d) of the Act.
● The Supreme Court upheld the rejection of a patent application
made by Novartis and also upheld the validity of Section 3(d) and
an amendment made to it and therefore, held it to be
constitutional and also in consonance with the provisions of TRIPS
as well.

22. Impact of Novartis Case
● The landmark judgment given by the Supreme Court in Novartis AG v Union of
India dealt with scope, application and interpretation of section 3(d) of the Indian
Patent Act. No doubt that this judgment broader implications on both
multinational and domestic pharmaceutical companies. After this judgment there
remains no ambiguity regarding patentability criteria under section 3(d) and its
enhanced efficacy to mean the enhanced therapeutic efficacy in cases of drugs
and medicines.
● This judgment would lead to invention of more genuine pharmaceutical product,
thus creating an environment of genuine research and developmental activities.
Apart from this, it will an atmosphere of competition and promote genuine
incremental invention.

24. Conclusions –
The implications of the Judgment
● The Supreme Court through this judgment has interpreted enhanced efficacy to mean
therapeutic efficacy. The court has made it clear that section 2(d) in no way bars incremental
invention. Especially, with respect to bioavailability of a product, the court never said that
increased bioavailability could not provide enhanced efficacy to the product. However, to prove
that a scientific evidence or a clinical data had to be produced before the court. The court left
open the question whether enhanced efficacy refers narrowly to curative effect, or more broadly
to improved safety profile and reduced toxicity.
● This judgment has surely paved way for creating of real incremental invention by both
international and domestic pharmaceutical companies. There is no doubt that this verdict will
have a positive effect motivating research and development of genuine drugs which could be used
for betterment of the public at large. Creating a competitive environment between international
and national pharmaceutical companies it will help in reducing the costs of life saving drugs.