The title is the saaransh (essence”) of the decision of the Indian Supreme Court in the Novartis case. As explained in the last two posts, the Supreme Court has done justice to the object of inclusion of Section 3(d) and has effectively sent out a very balanced positive (yes, not negative) message in the process- India does encourage genuine and responsible enterprise and innovation.

Contrary to what a few uninformed individuals would like us to believe, the Supreme Court has been pragmatic and careful enough to categorically draw an unequivocal distinction between “ever-greening” and “incremental innovation”, which is evident from the manner in which ever-greening was established in the facts of the case, and the following observation of the Court:

191. We have held that the subject product, the beta crystalline form of Imatinib Mesylate, does not qualify the test of Section 3(d) of the Act but that is not to say that Section 3(d) bars patent protection for all incremental inventions of chemical and pharmaceutical substances. It will be a grave mistake to read this judgment to mean that section 3(d) was amended with the intent to undo the fundamental change brought in the patent regime by deletion of section 5 from the Parent Act. That is not said in this judgment.”

If there was any doubt about the status of incremental innovation under the Patents Act, 1970 (“Act”), this paragraph removes all such doubts/myths with abundant clarity. Therefore, there need not be any fear-mongering among innovator drug companies that the decision has shut the doors on incremental pharma innovation. If anything, this decision has only clarified the position of the law by etching the contours of “efficacy” as envisaged in the Act, thereby reducing uncertainty to a fair extent, which is significant from a commercial standpoint. Lack of clarity in law leads to capricious application, and to the extent the Novartis decision “enhances known clarity” of the law, it is a positive development for all prospective patent applicants.

What is also to be critically noted is that, contrary to what is popularly assumed, the Supreme Court did not even take the blanket position that “enhanced bioavailability” cannot be used to satisfy the requirement of “enhanced efficacy” under Section 3(d). Here’s the relevant extract of the judgment which bears out my point:

189. Thus, even if Mr. Grover’s submission is not taken into consideration on the question of bioavailability, the position that emerges is that just increased bioavailability alone may not necessarily lead to an enhancement of therapeutic efficacy. Whether or not an increase in bioavailability leads to an enhancement of therapeutic efficacy in any given case must be specifically claimed and established by research data. In this case, there is absolutely nothing on this score apart from the adroit submissions of the counsel. No material has been offered to indicate that the beta crystalline form of Imatinib Mesylate will produce an enhanced or superior efficacy (therapeutic) on molecular basis than what could be achieved with Imatinib free base in vivo animal model.

190. Thus, in whichever way section 3(d) may be viewed, whether as setting up the standards of “patentability” or as an extension of the definition of “invention“, it must be held that on the basis of the materials brought before this Court, the subject product, that is, the beta crystalline form of Imatinib Mesylate, fails the test of section 3(d), too, of the Act.”

It is evident that the finding with respect to absence of enhanced efficacy in the case was on the basis of the record of the case, rather lack of it, to establish enhanced efficacy. Had Novartis presented a co-relation between increased bioavailability and enhanced efficacy, which was supported by empirical evidence, nothing stops us from plausibly assuming that the Court would have ruled in its favour.

What is also surprising is that once the arguments before the Supreme Court commenced, surely Novartis would have sensed the mood of the Court, and realized that empirical data to prove the relationship between bioavailability and efficacy was absolutely necessary if its case was to have a decent chance of success. And yet, based on the contents of the judgment, it does not appear that there was any attempt on the part of Novartis to present any such data or scientific evidence. It is even more surprising considering that lack of data has been the primary flaw in the application right from the stage of opposition before the Patent Office.

One can think of only two plausible explanations- either the genuine attempt was to expand the meaning of “efficacy” to include plain and simple enhanced bioavailability, or…the beta crystalline form of imatinib mesylate actually did not exhibit any enhanced efficacy over the mesylate salt.

Now, let’s look at a few other positives of the decision. For quite some time, it has been said that India is yet to understand the dialectics of patent litigation. The Novartis judgment disproves this sentiment to a fair extent because the judgment, despite a few avoidable inconsistencies, is a fairly reasoned one, at least on critical issues such as Section 3(d).

Also, contrary to what was expected by a cross-section of foreign investors, the decision does not take an anti-patent or anti-patentee stance. In fact, there is a clear message to protect genuine inventions using patents, and prevent subversion of the patent system at the expense of public interest, which is after all a re-statement of the stated goals of patent jurisprudence. Here’s the relevant observation of the Court:

156. However, before leaving Hogan and proceeding further, we would like to say that 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 skilful 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.”

For a fledgling patent regime which is still exploring itself, this is a good starting point with its first principles in place. One hopes that this sentiment percolates every level of the Indian Patent establishment, right from the Department of Industrial Policy and Promotion (DIPP is the nodal department under the Ministry of Commerce which is responsible for framing policies on IPR-related issues) to the Indian Patent Office (which answers to the DIPP, and is responsible for grant of patents) to the Intellectual Property Appellate Board (which is the appellate tribunal that entertains appeals from the decisions of the Patent Office) and finally to Indian Courts (which enforce patents).

A word of caution here would not be out of place- a few enthusiastic health activists seem to be reacting to the decision of the Supreme Court with unmeasured glee and jubilance, thereby contributing to a situation where India is pitted against innovator drug companies. I don’t think such a situation is in the best interests of the country. India needs innovator companies which have solutions to the ever-growing list of life-threatening diseases, and equally needs the generic industry which has mastered the art of providing cost-effective access to drugs. Until such time the Indian industry is capable of confidently undertaking high-end drug development, it would be unwise to rub the noses of innovator drug companies in the ground.

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J. Sai Deepak

Engineer-turned-Advocate, High Court of Delhi. Founder of the "blawg" "The Demanding Mistress" (