Facts:-

 On 17th May 2006, Swiss pharma company Novartis Ltd. filed two cases challenging the
rejection of the Gleevec patent application and the Indian Patent Law.
 Gleevec is produced and marketed internationally by Novartis
 Various Indian generic producers like Cipla, Ranbaxy, Natco also manufactured it and
sell it in India & other developing countries.
 Novartis sells Gleevec at Rs. 1.44 million (US$ 26'000) per patient per year and its
Generic versions in the Indian market are priced at about Rs. 96'000 (US$ 2100) per
patient per year.
 Novartis is charging high prices for Gleevec worldwide and it is not affordable in many
countries as one has to take it for his whole life.
 As there is very few buyers in India, Novartis started a drug donation program to promote
the drug & to see the market capabilities.
 In 1998 Novartis filed an application in the Chennai Patent Office for a patent on
Gleevec & in November 2003 obtained exclusive marketing rights (EMR) till patent was
granted—incase the patent was rejected the EMR would be cancelled.
 The EMR prevented Indian pharmaceutical companies from producing & selling
affordable generic versions of the drug.
 People depended on generic version had suffered lot.
 In 2005 India changed its patent law to become TRIPS compliant.
 Thus the Indian patent law allows for any person or group to oppose a patent application.
 Thus Cancer Patients Aid Association filed an opposition on behalf of cancer patients in
the Chennai patent office where the application of Novartis was pending.
 In January 2006 the Chennai Patent office rejected Novartis’ patent application on the
ground that the application claimed 'only a new form of an old drug'.
 The second case filed by Novartis challenges the constitutionality of section 3(d) of the
Indian Patents Act, claiming that the section is not in compliance with the TRIPS
agreement and hence should be declared unconstitutional.

INDIA & TRIPS AGREEMENT:-

When India became fully compliant with the TRIPS Agreement and introduced a product
patent regime in 2005, it coupled its law with a critical safeguard of refusing patents on
discoveries of new forms or new uses of known substances. The Indian patent law does not
consider such discoveries as inventions, unless an enhancement in efficacy is proven, and
therefore patents should not be granted. This is in accordance with the TRIPS Agreement which
does not define what an invention is and allows WTO countries to freely “determine the
appropriate method of implementing the provisions”  of TRIPS. Indeed the Doha declaration
requires that the TRIPS Agreement is implemented in such a manner that it allows for measures
to ensure access to medicines for all. Section 3 (d) is an example of such a provision.

The TRIPS Agreement requires Member countries to make patents available for any
inventions, whether products or processes, in all fields of technology without discrimination,
subject to the normal tests of novelty, inventiveness and industrial applicability. It is also
required that patents be available and patent rights enjoyable without discrimination as to the
place of invention and whether products are imported or locally produced (Article 27.1).

ANALYSIS:-
In January 2004, the court granted Novartis an injunction, restraining companies such as Cipla,
Ranbaxy and Sun from manufacturing, selling, distributing or exporting the drug. The injunction
was later made absolute by a single Judge of the High Court.

Once the generic manufacturers stopped producing Glivec, the price of the drug jumped from
approximately Rs.10, 000 for a month's requirement to around Rs.1, 20,000.

Indian drug companies went in appeal, which was heard by a Division Bench of the Madras High
Court. They contended that Novartis had obtained a patent in the U.S. and Canada in respect of
'pyramadine derivatives and processes for preparation thereof'. They argued that no patent was
filed in India for imatinib mesylate. The EMR has been fiercely challenged in courts by generic
producers of the drug on the grounds that the compound being a derivative of a molecule known
prior to 1995 did not satisfy the novelty criterion in the Patents Act.

Novartis said that the EMR was conferred for a period of five years, or until an order was passed
on the patent claim in India, whichever was earlier. Novartis in 1997 applied for grant of patent
for the drug glivec in the patent office in Chennai.

In 2005, the patent act was amended. The Amendment Act 2005 granting product patent,
provides that EMRs would either be replaced by patents (if granted) or cancelled (if patents were
rejected).

By way of opposition, Cipla Limited along with other generic producers filed their representation
under the Patents Act, 1970 sec. 25(1) as amended by Patents (Amendment) Act, 2005 and the
Patents Rules, 2003, r. 55 as amended by Patents (Amendment) Rules, 2005. The following two
issues will be argued.

Whether the product applied for patents qualified to be an invention as the product was
anticipated by prior publication and obviousness
 Whether the Patent Specification brought out any improvement in the efficacy of the beta
crystals over the known substance as required by Sec.3(d) of the Patents Act, 1970 as amended
by Patents (Amendment) Act, 2005

The Assistant Controller held imatinib mesylate is already known from prior publications
because the claims 6 to 23 of the US Patent claim a pharmaceutically acceptable salt of the base
compound and the patent term extension certificate, specifically mentions imatinib mesylate as
the product. Further the US Patent discloses methanesulphonic acid as one of the salt forming
groups and the patent specification clearly states that the required acid addition salts are obtained
in a customary manner. Also that imatinib mesylate normally exist in the beta crystals form,
which is thermodynamically most stable product and thus the invention is obvious and
anticipated by prior publication; hence not an invention under the Patents Act.

The Controller agreed with the contention of the opponent that a difference of 30% on
comparing the relative bioavailability of the freebase with that of the beta crystal form of
imatinib mesylate which could be due to difference in their solubility in water, did not bring out
any improvement in the efficacy of the beta crystals over the known substance and thus could not
be patnetable under Sec. 3(d) of the Patents Act. Mr.V.Rengaswamy, Asst. Controller of Patents
& Designs, the learned judge in the present case refused to proceed with the application for
Patent.

Aggrieved by the decision of the Indian Patent Office in Chennai, Novartis has filed a Writ
Petition before the Chennai High Court in Jan 2006 challenging the constitutional validity of
Section 3 (d) of The Patents Act and also for quashing of the order of the Patent Office for its
refusal to grant product patent. It asked the court to declare s3(d) as being non compliant with
TRIPS and arbitrary and in violation of Ar14 of the constitution.

On Aug 7 2007 the Madras HC dismissed the petition filed by the Swiss pharma. The court held
that s3 (d) of the Patents Act as amended in 2005 along with its explanation is valid. This
decision has stymied Novartis move to challenge the rejection of patent application by the patent
office.

The appeal against the rejection of patent has to be decided by the IPAB. The court transferred
the case to IPAB after the government announced the setting up of IPAB and declared the
transfer of all pending IP related appeals to it The IPAB has appointed former Patent Controller
General S Chandresekaran to hear the appeal. Novartis filed a petition in the IPAB to appoint
new member in place of S Chandresekaran on the ground that he was responsible for the patent
application rejection. IPAN dismissed the petition.

On Aug 1 2007 Novartis filed an appeal in the Madras HC challenging IPAB s decision.

The appeal is pending for hearing in the HC. Also the appeal against decision of patent office
rejecting the patent for Glivec is pending. The decision of the Madras HC is a landmark decision
after the amendment act of 2005. The decision makes the appeal for rejection of patent weak;
thus drugs being available at economic rates throughout the county