Novartis AG. V. Union of India & Others, (2013) 6 SCC 1, Supreme Court of India.

CASE NAME & CITATION:

Novartis AG. V. Union of India & Others, (2013) 6 SCC 1, Supreme Court of India.

COURT:

Supreme Court of India, Division Bench

BENCH/JUDGES:

• Justice Aftab Alam
• Justice Ranjana Prakash Desai

FACTS OF THE CASE:

Novartis, a Swiss multinational pharmaceutical company, developed a cancer drug called Imatinib Mesylate, marketed under the trade name Glivec (or Gleevec). This drug was highly effective in treating chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST).

Novartis had originally filed a patent for the beta crystalline form of Imatinib Mesylate in 1998 in India. However, at that time, India recognized only process patents, not product patents, under the Patents Act, 1970.

With the advent of the TRIPS Agreement (1995), India had to amend its Patent law to provide for product patents in pharmaceuticals and chemicals. This was done in 2005 when India introduced product patents. Novartis then pursued its pending application for Glivec in India.

However, in 2006, the Indian Patent Office rejected Novartis`s patent application on the ground that the claimed invention was not an “invention” within the meaning of Section 2(1)(j) and (ja), and that it was hit by Section 3(d) of the Indian Patents Act, 1970, which bars patents for new forms of known substances unless they show “enhanced efficacy”.

ISSUES RAISED:

1. Whether the beta crystalline form of Imatinib Mesylate was patentable under the Indian Patents Act.
2. Whether the drug could be said to have “enhanced efficacy” under Section 3(d).
3. Whether Section 3(d) of the Indian Patents Act was in violation of India` obligations under the TRIPS Agreement.
4. Whether the rejection of Novartis`s patent hindered pharmaceutical innovation or promoted public health interests.

ARGUMENTS OF THE PARTIES:

Novartis (Petitioner)

• Claimed that the beta crystalline form of Imatinib Mesylate was a novel invention that deserved a product patent.
• Argued that the new crystalline form had better flow properties, higher bioavailability, improved stability, and hence satisfied the “enhanced efficacy” requirement.
• Contended that Section 3(d) was not compliant with the TRIPS Agreement, as TRIPS mandated stronger patent protection without such additional restrictions.

Union of India & Respondents (including NGOs like Cancer Patents Aid Association):

• Asserted that Novartis was engaging in “evergreening”- seeking patents on minor modifications of existing drugs to extend monopoly and block generics.
• Highlighted that Imatinib Mesylate in free base form was already known, and what Novartis was claiming was merely a new crystalline form, which did not substantially improve therapeutic efficacy.
• Defended Section 3(d) as a deliberate legislative safeguard to prevent trivial patents and ensure affordable access to medicines.
• Argued that TRIPS gives member countries flexibility in defining patentability criteria, hence India`s law was complaint.

Judgement/Decision 

The Supreme Court of India dismissed Novartis`s appeal and upheld the rejection of the patent.

Key Rulings:

1. The beta crystalline form of Imatinib Mesylate did not meet the requirement of “enhanced therapeutic efficacy” under Section 3(d). Improvements in stability, bioavailability, or storage properties do not qualify as “efficacy” in terms of therapeutic effect on diseases.
2. Section 3(d) of the Indian Patents Act was held valid and consistent with TRIPS obligations. TRIPS provides flexibilities for member states to protect public health.
3. The decision prevented Novartis from obtaining a monopoly, thereby allowing generic manufacturers (like Cipla, Natco) to continue producing low-cost versions of Glivec in India.

Reasoning:

• The Court interpreted “efficacy” in Section 3(d) narrowly to mean therapeutic efficacy, i.e., the ability to cure or treat disease more effectively.
• Merely showing better physical properties such as improved flow, better stability, or increased bioavailability does not establish therapeutic efficacy.
• The Court emphasized the legislative intent behind Section 3(d): to prevent evergreening by MNCs, ensuring that only genuine innovations that significantly enhance treatment outcomes get patent protection.
• On the TRIPS argument, the Court clarifies that TRIPS does not define “invention” or restrict members from adopting stricter standards of patentability, so Section 3(d) was fully TRIPS-compliant.
• The judgment struck a balance between IPRs and Public health, recognizing India`s constitutional duty to make essential medicines accessible to all.

Significance of the Case:

• Landmark in Patent Law:

The Novartis case is one of the most important decisions in global patent jurisprudence. It clarified the scope of Section 3(d) and restricted evergreening practices.

• Public Health Victory:

The judgement ensured that life-saving cancer drugs like Glivec remained available in India at a fraction of the global price (INR 1,200 Vs. INR 1,20,000 per month).

Impact on Pharma Industry:

Multinational Pharmaceutical Companies criticized the ruling a being hostile to innovation. However, it also encouraged Indian generic manufacturers, making India a pharmacy of the developing world.

Global Recognition:

The case was widely studied in international law schools and cited as an example of balancing IPR with human rights. It re-affirmed India`s role in shaping TRIPS flexibilities for developing countries.

Interpretation of Section 3(d):

The court set a precedent by narrowly defining “efficacy” as therapeutic efficacy- a principle applied in later cases involving patents on drugs like Sofosbuvir (hepatitis C treatment).

Access to Medicines vs. Patent Monopoly:

The judgement became a rallying point for NGOs and activists advocating for equitable access to medicines, particularly in the context of HIV/AIDS, cancer, and other life-threatening diseases.