Summary Update of week 1
18 September 2012, New Delhi.
As you are aware, the final hearing of the petition filed by Novartis AG (Novartis v. Union of India), challenging the order of the Intellectual Property Appellate Board (IPAB) rejecting its appeal relating to its patent application for the beta-crystalline form of imatinib mesylate, and related petitions commenced before a bench of the Supreme Court of India comprising Justice Aftab Alam and Justice Ranjana Desai on 11 September 2012 and continued until 13 September 2012. The final hearing will resume today. Below is a summary update of the arguments advanced by Novartis’ counsel during the first week.
Mr. Gopal Subramaniam, senior counsel appearing for Novartis AG, commenced his arguments by stating that the matter is of enormous significance, as the Supreme Court would be interpreting section 3(d) of the Patents Act for the first time. He traced the history of the patent regime in India to India’s obligations under the TRIPS Agreement. He also set out the history of the proceedings in the present case—the Patent Controller’s rejection of its patent application, the rejection by the Madras High Court of Novartis’ constitutional challenge to section 3(d) and the rejection by the IPAB of its appeal. Pointing out that the IPAB had reversed the Patent Controller’s decision on three counts—novelty, inventive step and priority date—in Novartis’s favour, he said that the IPAB rejected Novartis’ patent application only on the ground of section 3(d). Referring to Gleevec as a magical drug, Mr. Subramaniam said that Gleevec had been granted patents in 35 countries.
Responding to Justice Alam’s query about the cost of the treatment for the entire course, Mr Subramanian informed the Court that, when Novartis had been granted exclusive marketing rights, the price of the drug was INR 120,000 per month. It was pointed out to the Bench that the drug has to be taken lifelong. In an attempt to allay the concerns regarding the high price of the drug, Mr. Subramaniam referred to the patients’ assistance program run by Novartis, which provided Gleevec for free to 85% people enrolled in the programme. He added that 5% patients who paid the full price had to pay the price of the drug for only 80 days, after which the drug was given to them free of cost for the remainder of the year. He stated that the present case was not to make money out of poor people for profit but to vindicate the honour that was lost to Novartis by the rejection of a patent to its invention which had been granted a patent in 35 other jurisdictions. Justice Alam asked Mr Subramaniam if, instead of having a complex patients’ assistance programme, it would be easier for Novartis to reduce the prices of the drug to INR 2 or INR 5 per unit which would bring it within the reach of those who needed it. Mr Subramaniam said that he would need to take instructions from his client. He, however, added that, in order to demonstrate its bona fides and to show that it does not want to profiteer without conscience, Novartis would provide an undertaking that it would continues its patients’ assistance programme even after it was granted a patent.
Referring to section 3(d), Mr Subramaniam said that section 3(d) was a gateway provision that was meant to prevent evergreening (i.e. subsequent patents on drugs that had already been approved and were being marketed at the time of the subsequent patent application). He said that Novartis’ patent application was not covered by section 3(d) because neither imatinib nor imatinib mesylate were known substances. Noting that efficacy was the controlling word of section 3(d) and its explanation, Mr Subramaniam argued that, for section 3(d) to apply, the known substance and its efficacy must be known and established. For efficacy of a compound to be known in the sense of section 3(d), he urged that the compound should have been able to be administered to human beings. He submitted that only the beta-crystalline form of imatinib mesylate has been tested on human beings and that, therefore, section 3(d) was not attracted as neither imatinib nor imatinib mesylate had been administered to human beings.
To support his proposition, Mr Subramanian relied on an English judgment involving a patent for a derivative of a known compound. He said that, in the case, Beecham held patents for ampicillin, which was a known antibiotic. Bristol, another company, sold hetacillin, a derivative of ampicillin made by adding acetone. Mr Subramaniam said that, in that case which covered what section 3(d) intended to cover, hetacillin was described as “ampicillin with a hat on”. Justice Alam asked if the beta-crystalline form of imatinib mesylate claimed by Novartis was imatinib with “a three piece suit”.
Mr Subramaniam relied on the Report of the Mashelkar Committee to support his interpretation that section 3(d) does not apply to Novartis’ patent application. He also argued that section 3(d) has to be interpreted harmoniously with India’s obligations under the TRIPS Agreement to provide a patent regime (both products and processes) for pharmaceuticals.
Referring the judges to the Doha Declaration on the TRIPS Agreement and Public Health, Mr Subramanian said that the concern of promoting access to medicines for all was redressed in the clauses relating to compulsory licences. He referred the judges to the corresponding provisions in the Indian patent relating to compulsory licences and submitted that India’s obligations under Doha Declaration to secure access to medicines for all had been addressed by these provisions. He said that the notion that section 3(d) of the Patents Act is meant to secure access to medicines to all is a fundamental misunderstanding and added that section 3(d) was an impartible part of the general patent law. The purpose of section 3(d) is to prevent patents to new forms of existing approved drugs by tweaking them.
Explaining the rationale for a global patent regime, Mr Subramaniam said all countries contribute together for further research to develop research and development for newer diseases on a long-term basis. He added that the TRIPS Agreement facilitates transfer of technology and free flow of drugs and also enables Indian inventors to file patent applications in other countries and that an assured patent regime would increase joint ventures in India by foreign pharmaceutical companies. Justice Alam intervened to question the price at which the free flow occurred and whom it benefitted. Mr Subramaniam said that, while price was a factor, it was intended to be a kind of investment for research in long-term research for medicines.
In response to Justice Alam’s queries about the practice of using the provisions relating to compulsory licence and the consideration that was payable, Mr Subramaniam cited the instance of a compulsory licence being granted in India on Bayer’s anti-kidney cancer drug to Natco and said that, while no guidelines had been framed, the royalty fixed for Natco (6% of Natco’s sales price) could be considered as a benchmark.
While referring the judges to the provisions that set out the general principles of working of a patented invention in India, Mr Subramaniam said that a patentee would have to set up a manufacturing facility. Replying to an observation from Justice Alam that Novartis may choose only import the drug, Mr Subramaniam said that it may be a necessity in certain cases but that a condition to work the patent in India could be imposed at the time of grant of a patent.
Mr Subramaniam then argued that section 3(d) does not apply to Novartis’ case as it applied only to discoveries and not inventions. Adverting to the distinction between discoveries and inventions, Mr Subramaniam said that India has decided to take a mean path of allowing patents to discoveries too (as opposed to only inventions) if the discoveries exhibit enhanced efficacy. He pointed out that the IPAB has held that the beta-crystalline form of imatinib mesylate is an invention as it satisfies the tests of novelty, inventive step and industrial application under section 2(1)(j) and section 2(1)(ja). He submitted that the fallacy in the IPAB orders lies in applying section 3(d) to Novartis’ patent application after holding that it was an invention.
Mr Subramaniam pointed out that Novartis had been granted a process patent for making the beta-crystalline form of imatinib mesylate and that, prior to Novartis’ present patent application, no one could have known have to make even imatinib mesylate, let alone the beta-crystalline form of imatinib mesylate.
Mr Subramaniam then started reading the order of the IPAB. Clarifying the distinction between novelty (anticipation) and obviousness (inventive step), Mr Subramaniam said that, in the analysis of obviousness, the existing knowledge is complete and enabling and therefore it is obvious to reach the claimed product. He said that, in the analysis of anticipation, full details are not given in the existing knowledge. He added that obviousness and anticipation were the twin tests of inventive step. He pointed out the findings of the IPAB in Novartis’ favour on the issue of novelty (anticipation) in which the IPAB held that none of the prior art disclosures disclosed all the elements of the beta-crystalline form of imatinib mesylate or how it was to be arrived at.
On the issue of maintainability, Mr Grover, senior counsel appearing for CPAA, and Mr Salve, senior counsel appearing for Cipla, informed the Court that though they had raised objections as to the maintainability of Novartis’ petition before the Supreme Court on the ground that Novartis had not approached the Madras High Court first, they would prefer for the Supreme Court to decide on this matter. Rajeshwari Hariharan, counsel appearing for Natco, informed the Court that Natco still maintained its objections on this issue.
During the week, Novartis also submitted an undertaking to the Court that states: “in the event of a patent being granted to Novartis in India” it “undertakes to continue the (patient assistance) programme … till July 2018 and subject to there being no further regulatory price control / direction in relation to the said product”. Mr Grover, senior counsel appearing for CPAA, objected to the introduction of new facts through this affidavit about Novartis’ patients’ assistance programme as CPAA had placed material on record below the lower courts about Novartis’ conduct with respect to its patients’ assistance programme.
Mr. Subramaniam will resume his arguments later today. We will keep you posted of the developments.
Lawyers Collective HIV/AIDS Unit