Patent on Improvements- Did the Novartis Case Really Solve the Issue?

November 13, 2007 by Rakshithaa Salavakkam

India, which followed the approach of process patenting to
pharmaceuticals switched over to product patenting by way of an amendment
in 2005 in order to be in consonance with the TRIPs agreement. However,
India also used the flexibility offered by the WTO rules, which while
setting a minimum standard for patent protection, restrained from defining
what an ‘invention’ per se is, thereby giving a good amount of leeway to
its individual member states.

In this accord, Section 3 (d) of the Indian Patent Act, 2005 provides for
an exclusion of “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”. This provision, though does not impose a complete bar on
patenting improvements, nevertheless lays down an effective check on the
‘evergreening’ tactics adopted by inventors to keep the patent on their
products alive. Nevertheless, a question still remains as to what is
perceived by the provision as ‘effective enough’ for an improvement to
qualify for a patent. For instance, say I have a head ache and Tablet A
cures it in half an hour. Now, for an improvement over Tablet A to be
patentable, should it cure my headache in fifteen minutes or should it be
fifteen seconds?

This question should have been ideally answered by the Novartis case,
MANU/TN/1263/2007 which came up primarily due to the rejection of Novartis’
patent application for its improved drug Glivec, on the ground of
insignificant improvement. But conversely with an unusual turn of events,
marked by the rather unique approach taken up by the Swiss Company in
challenging its rejection, the issue was left unresolved.

Novartis in its appeal against the decision of the Patent Office, put
forth two main questions before the High Court of Madras. Firstly, whether
the Indian Patent Act, was in accordance with the TRIPS agreement, and
secondly, whether Section 3(d) of the Act was unconstitutional on the face
of it being vague and thereby conferring uncanalized powers on the Patent
Officer. While the first question was a sure no-hit, for it was an issue
solely within the jurisdiction of the WTO to be brought up only by a
member state and hence left untouched, the second issue was ruled against
Novartis on two grounds. The Court held that the provision under attack
was constitutional on the light of its object of providing an easy access
to its citizens to life saving drugs, and that there were “inbuilt
materials” in the section that would guide the patent officers. Moreover,
the matter blew up into a major public debate on the policy question of
whether pharmaceuticals should in fact be permitted to hold patents on
life saving drugs.

It is not disputed that these issues of public interest are in fact
central to the law of patents, especially in the case of pharmaceutical
products that are so close to human life. However, these are policy
considerations that need to be dealt with by the legislature while framing
the laws, and not by the courts and the patent offices while deciding on
granting patents to individual applicants. This case would have served
better as regards judicial law making, had it been centered around the
interpretation of the part under attack than the constitutionality of it,
for what is needed at this nascent stage of the new enactment is an
objective standard to determine when a claim of improvement in fact became
an invention worth patenting. This issue, though raised by Novartis, was
done so only as an argument against the constitutionality of the provision
and hence lost its focus. Had Novartis instead taken a different approach
challenging the decision of the patent officer, the question would have
probably been answered.

The possibility of this legal clarification taking place in the near
future also seems bleak, with Novartis expressly stating that it would not
take the matter on appeal to the Supreme Court, and the Swiss Government
declining to raise the issue before the WTO. Moreover, the practical
consequences which this case may entail are also alarming. One foreseeable
outcome might be the major global inventors like Novartis moving their
research and development facilities from India, depriving the country of
their valuable new drugs. In such a scenario, one cannot help but feel
that an alternative approach of laying down the law on product patenting
on improvements clearly, and thenceforth rejecting the claim of Novartis,
or accepting its claim and then making it to grant licenses at cost to the
domestic drug companies would have solved the situation better.

  1. One Response to “Patent on Improvements- Did the Novartis Case Really Solve the Issue?”

  2. Novartis’s claim of unconstitutionality with respect to s.3 (d) of the Indian Patent Act is not necessarily correct when you consider that one of the Indian legislature’s objectives may have been to prevent companies from gaining monopolies on certain industries that are crucial to the wellbeing of the population. Perhaps the intention was that patent officers consider context, such as the need to access generic brands of life-saving drugs, when deciding to grant a new patent. One must appreciate the fact that these medications are very important to India’s current health care needs and a more stringent standard of patent granting may be justified when balancing various interests.

    When a law is left with some flexibility afforded to the patent officer, the legislature has effectively ensured that certain industries are looked at through a different lens based on the country’s situation. Granted, this is not necessarily the correct approach to take because the law is ideally supposed to be impartial to all that make use of it.

    In any case, the notion of legal dialogue should encourage change if change is indeed necessary at any particular time. As an example, another case may lead the judiciary to rule in favour of a pharmaceutical company by declaring s.3 (d) invalid, which then puts the onus on the government to either support or go against such a decision by further legislative intervention. Ultimately, the law should always endeavour to balance the various rights of stakeholders via a process of legal discourse.

    By Saeed Walji on Nov 27, 2007

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