TWN Info Service on Health Issues (August 07/01)

8 August 2007

Indian High Court dismisses Novartis petition

Health activists cheer the recent Indian High Court decision to uphold India’s Patents Act. This is seen as a major victory for patient’s access to affordable medicines in developing countries.

The article below outlines the outcome of the court’s decision and is reproduced with the permission of South-North Development Monitor (SUNS) #6308, 7 August 2007.

With best wishes
Evelyne Hong
TWN

Health: Indian High Court dismisses Novartis petition
By Kanaga Raja, Geneva, 6 August 2007

The Madras High Court on Monday dismissed a petition filed by the Swiss pharmaceutical giant Novartis challenging the constitutional validity of India's Patents Act.

According to media reports from India, the High Court, in dismissing the petition, held that it was not the proper forum to decide whether the Act was in compliance or not with the TRIPS Agreement.

The media reports said that Novartis' petition challenged the constitutional validity of Section 3 (d) of the Patents Act 2005, under which its patent application for beta crystalline form of imatinib mesylate, was rejected.

The Act disallows patents for minor modifications to molecules already invented and that are components in drugs.

In a media release on Monday, Novartis said that the decision will have long-term negative consequences for research and development into better medicines for patients in India and abroad.

The Swiss pharmaceutical giant however said that it will likely not appeal the ruling.

"We disagree with this ruling, however, we likely will not appeal to the Supreme Court. We await the full decision to better understand the Court's position," said Ranjit Shahani, Vice-Chairman and Managing Director, Novartis India Limited.

Novartis noted that still at issue is why a patent for Glivec - granted in nearly 40 countries, including Russia, Taiwan and China - was denied in India in 2006. The Glivec patent appeal will be decided separately by the newly-operational Intellectual Property Appellate Board (IPAB).

Meanwhile, in a press release also issued on Monday, the international medical humanitarian organization Medecins Sans Frontieres (MSF) welcomed the High Court decision to uphold India's Patents Act as a major victory for patients' access to affordable medicines in developing countries.

"This is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India," said Dr. Tido von Schoen-Angerer, Director of the MSF Campaign for Access to Essential Medicines.

"The Court's decision now makes Indian patents on the medicines that we desperately need less likely. We call upon multinational drug companies and wealthy countries to leave the Indian Patents Act alone and stop pushing for ever stricter patent regimes in developing countries."

According to MSF, Novartis took the Indian government to court over its 2005 Patents Act because it wanted a more extensive granting of patent protection for its products than offered by the law.

Novartis claimed that India's Patents Act did not meet rules set down by the World Trade Organization and was in violation of the Indian constitution.

According to MSF, India only began giving patents on medicines to comply with WTO rules, but it designed its law with safeguards so that patents can only be granted for real innovations.

This means that companies seeking a patent for modifications to a molecule already invented, in order to extend ever further their monopolies on existing drugs, would be unsuccessful in India. It is this aspect of the law that Novartis was seeking to have removed, said MSF.

MSF said that a ruling in favour of the company would have drastically restricted the production of affordable medicines in India that are crucial for the treatment of diseases throughout the developing world.

Developing country governments and international agencies like UNICEF and the Clinton Foundation rely heavily on importing affordable drugs from India, and 84% of the anti-retrovirals that MSF prescribes to its patients worldwide come from Indian generic companies.

India must be allowed to remain the "pharmacy of the developing world," stressed MSF.

MSF also noted that over 420,000 people worldwide signed a petition requesting Novartis to drop the case because of the devastating impact that Novartis' actions could have on access to essential medicines.

Among the signatories to the petition were Indian Health Minister Anbumani Ramadoss, Archbishop Desmond Tutu, Global Fund Director Michel Kazatchkine, members from the European Parliament and the US Congress, former Swiss President Ruth Dreifuss, former UN Special Envoy for AIDS in Africa Stephen Lewis, German Development Minister Heidemarie Wieczorek-Zeul, Norwegian Development Minister Erik Solheim, as well as authors John Le Carre and Naomi Klein.

In another statement, the Indian group, Lawyers' Collective, which is involved in access to medicines issues and cases in India, gave a background to the case.

It said that in March 2005, the Indian Parliament amended its patent law and a significant provision (section 3d) was introduced to prevent ever-greening and granting of frivolous patents.

In May 2006, Novartis filed writ petitions before the Madras High Court, claiming that the Patent Controller erred in rejecting its patent application, and further claiming that section 3(d) was, among other things, vague, ambiguous, and contrary to the requirements of the TRIPS Agreement.

In the challenge to section 3(d), Novartis argued that this provision is not in compliance with the TRIPS Agreement and that it is in violation with the government's constitutional duty to harmonise its domestic laws with its international obligations.

Recognising the fact that the TRIPS agreement is non-self executing and provides no private right of enforcement, Novartis advanced a somewhat novel claim that while it is open for the Indian Parliament to repudiate its international obligations altogether, it is somehow invalid and unconstitutional for Parliament to otherwise comply with TRIPS except for one particular provision.

The Government of India and the generic companies argued that neither could private companies such as Novartis challenge a law as being TRIPS non-compliant nor could an Indian court decide whether the Indian patent law is TRIPS compliant or not. The appropriate forum, they argued, is the WTO Dispute Settlement Body.

Upholding this argument, the Madras High Court held that it was not the proper forum to decide whether the Indian patent law was TRIPS-compliant or not.

The other ground of challenge raised by Novartis was that the use of the term "efficacy" in section 3(d) is vague and ambiguous, and therefore violates the equality provision (Article 14) of the Indian Constitution.

During the arguments, while conceding that the meaning of the term "efficacy" is known, Novartis contended that because there was no clarity as to what constituted "enhancement of efficacy" and "significant enhancement of efficacy" as required by section 3(d), the law was vague and lent itself to arbitrary decisions by the Patent Controller.

The Government of India and generic companies argued that section 3(d) is not in violation of the equality provision of the Indian Constitution as the concept of efficacy is well-known to persons in the pharmaceutical industry and it is impossible to lay down a "one size fits all" standard to determine what constitutes a significant enhancement of efficacy.

Dismissing the petition, the Madras High Court held that section 3(d) was not vague or arbitrary and therefore did not violate the Indian Constitution.