SEMINAR REPORT 1

TOPIC:

PATENT CASE STUDY:NOVARTIS

SUBMITTED TO:

Dr. ARMINDER KAUR

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INTRODUCTION

On 17th May 2006 the Swiss pharmaceutical company Novartis Ltd. filed two cases, challenging both the Indian patent office’s rejection of its patent application for the cancer drug imatinib mesylate (brand name Gleevec or Glivec), and the section of the new Indian patent law which formed the basis of the patent office decision.

Imatinib mesylate (Gleevec) is a cancer drug used in the treatment of Myeloid Leukemia (cancer of the blood). It is produced and marketed internationally by the Swiss pharmaceutical company Novartis and various Indian pharmaceutical companies, such as Cipla, Hetero, Natco and Ranbaxy. Novartis sells Gleevec at Rs. 120,000 ($ 2500) per patient per month in India. Generic versions of the drug are priced at about Rs. 8,000 ($175) per patient per month on the Indian market.

HISTORY OF THE CASE:

Filing of patent by Novartis

In 1998, Novartis filed an application in the Chennai Patent Office for a patent on imatinib mesylate (Gleevec). At that time, India did not yet grant patents on medicines but in November 2003, Novartis was still able to obtain exclusive marketing rights (EMR) for a period of five years, based on a temporary provision of the previous Indian Patents Act. The granting of EMR was a TRIPS obligation for countries like India, which did not grant patents for pharmaceutical products before 2005 (subject to a number of conditions). After 2005, when the Indian patent office began examining pharmaceutical product patent applications, EMRs would either be replaced by patents (if granted) or cancelled (if patents were rejected). The latter scenario applies to the Gleevec patent application.

The EMR operated like a patent monopoly, preventing Indian pharmaceutical companies from producing affordable generic versions of imatinib mesylate.

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Producers of generics were forced to withdraw the production and sale of generic versions of the drug in India and other developing countries.

Cancer Patient Group files Patent Opposition

In 2005, India changed its patent law to become fully TRIPS compliant and Novartis’ patent application on Gleevec came up for examination by the Indian patent office of Chennai. The Indian Patents Act allows for any person or group to oppose a patent application before it is granted and the Cancer Patients Aid Association filed an opposition on behalf of cancer patients in the Chennai patent office

Chennai Patent Office rejects Gleevec patent application

In January 2006, the Chennai Patent office rejected Novartis’ patent application on the grounds that the application claimed 'only a new form of a known substance.’ This order of the Chennai patent office brought relief to thousands of cancer patients as it not only prevented a patent monopoly until 2018, but also automatically cancelled the EMR . The Gleevec patent order rejecting a 'new form of a known substance' also set an important precedent for the examination of other patent applications claiming only improvements of known molecules, including antiretroviral medicines to treat AIDS.

Novartis challenges Patent Order and Indian Patent Law

On 17 May 2006, Novartis filed two sets of cases in the Chennai High Court.

The first case challenges the order of the Chennai Patent office, which rejected the Gleevec patent application of Novartis, following a pre-grant opposition by the Cancer Patients Aid Association. Legal representatives of the Cancer Patients Aid Association will appear on their behalf before the Chennai High Court. Novartis' constant litigation renews fears about the future availability of drugs if the patent case of Gleevec is reopened. Further, it has raised serious concerns among other patient groups, as the Gleevec patent order set an important precedent for the examination of crucial drug patent applications including those for AIDS treatment.

The second case filed by Novartis challenges the constitutionality of section 3(d) of the 2005 Indian Patents Act, which was specifically introduced by the Indian parliament as a safeguard against the misuse of the product patent regime. Novartis in

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its petition is claiming that the section is not in compliance with the TRIPS Agreement and hence should be declared unconstitutional.

Section 3 (d) of the Indian Patent Law - an important public health safeguard The section is aimed at preventing pharmaceutical companies from obtaining patents on trivial improvements or new medical uses of known molecules.

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.

INDIAN PATENT LAW:

Patents: are form of a certificate granted by a government. It gives the inventor/ innovator the right to exclude others from imitating , manufacturing, using or selling the invention in question for commercial use during the specified period.

Patents can be granted for: 1. an invention (including a product)2. an improvement in the invention ( but should not be obvious)3. a process for producing a product4. a concept

Administration in India

1. Under the Ministry of commerce and industry is a department of Industrial policy and promotion. The deptt. has the Patent office which performs statuary duties in connection with grant of patents, registration of industrial designs.

2. Controlled by the CONTROLLER GENERAL OF PATENTS

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3. Patent offices are located at KOLKATA, MUMBAI, CHENNAI and DELHI

4. PIS: patent information system located at Nagpur provides and maintains comprehensive collection of patent information on world wide basis. PIS can provide patent search, patent literature services, etc.

BASIS OF PATENTIBILITY orBASIC REQUIREMENTS OF PATENTIBILITY:

According to section 2 (j) of the India Patents (amendment) Act, 2002, ‘Invention’ means a new product or process involving an inventive step and capable of industrial application.

There are three broad requirements for filing a patent:-

1. NOVELTY (or new)2. UTILITY3. INVENTIVE STEP / NON OBVIOUSNESS.

1. NOVELTY

Term ‘ novel’ implies that the invention did not exist previously i.e. it has not been disclosed in the public through any type of publications anywhere in the world before the filing of a patent application. It should not be already known to the public in any form (written, oral, or through use).An invention will be considered novel, if it does not form a part of the global state- of- the-art and is sufficiently different from prior art.

Prior Art/ APriori KnowledgeThe applicant should check that :-- patent specifications are not known before date of filing or any erlier patent

filed.- Not published anywhere till date of filing.For this purpose, literature/ patent search should be undertaken

2. UTILITY

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The invention must be useful for the beingsi.e. invention must be capable of industrial application.It is not necessary that the invented has a concrete shape or is a commercial success. The emphasis lies on the utility of invention

3. INVENTIVE STEP AND NON OBVIOUSNESS

A patent application involves an inventive step if the proposed invention is not obvious to a person skilled in the art i.e. skilled in the subject matter of the ptent application.The invention therefore, should be technically advanced hence enhancing the science.The invention should not be so obvious that it comes automatically to a person skilled in the art.

Section 2 (ja) of Indian Patents Act states that ‘inventive step’ means a feature that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

NON PATENTIBILITY

According to Chapter II of the Indian patents Act, 2002, some inventions do not fall within the meaning of this act. Such inventions, thus, cannot be patented.

In this chapter, three sections are present:Section 3: What are not inventions.Section 4: inventions relating to atomic energy are not patentableSection 5: inventions where only methods or processes of manufacture are patentable.

The Novartis drug- Gleevec was refused a patent on the basis of section 3(d) of the Indian Patents (amendment) Act, 2005. This section states: 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 or the mere discovery of any new property or use for a known substance or of the mere

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use of a known process, machine or apparatus unless such known process results in a new product or employs atleast one new reactant.

Explanation: for the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in the properties with regard to efficacy.

NOVARTIS PERSPECTIVE

“Novartis is challenging the Indian patent law following the patent office's decision to decline a patent for Glivec / Gleevec, our ground-breaking cancer treatment.

To be clear, our case in India is solely about safeguarding intellectual property. This is not about patient access. With our well-regarded record in social responsibility, we are surprised that some groups are confusing the issue.We are contesting the rejection of the Glivec / Gleevec patent in India. Furthermore, we are challenging the establishment of additional hurdles to patentability in India that discourage both breakthrough and incremental innovation. Patents save lives by stimulating innovation. With effective patent laws, companies such as Novartis can continue to bring improvements and innovations to patients and societies.

We commend the progress India has made in advancing intellectual property rights, but more needs to be done to align this increasingly important industrial country with its international obligations. We call on the Indian Government to grant the patent for Glivec / Gleevec and ensure its laws reflect international standards of patentability.

The case is generating public interest and inquiry, in particular around the potential impact on access to medicines. We have heard these concerns and want to clarify our point of view.

Novartis is deeply concerned that patients have access to medicines Novartis is concerned that all patients have access to the medicines they need, as demonstrated by our well-regarded record in social responsibility.

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Our case in India is solely about safeguarding intellectual property, not about patient access Novartis is not challenging any provisions of the Indian patent law that were put in place to promote access. We are challenging parts of the Indian patent law that led to the rejection of the Glivec / Gleevec patent.

We are contesting the provision of Indian Patent Law that has led to the rejection of the Glivec / Gleevec patent in India. Our case does not challenge provisions that provide for access under international trade agreements, specifically the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Doha Declaration. In fact, Novartis supports the TRIPS conditions that promote access for developing countries. We are challenging the establishment of additional hurdles to patentability in India that discourage both breakthrough and incremental innovation.

Protecting innovation is the best protection for patients, laying the foundation for the massive R&D investments made by the pharmaceuticals industry that are vital to medical progress. With effective patent laws, companies continue to bring improvements and innovations to patients and societies. For a research-based company such as Novartis, patents are not negotiable.

Glivec / Gleevec is recognized as one of the medical breakthroughs of the 20th century Glivec / Gleevec is a life-saving drug for cancer and has been widely recognized as true innovation. That Glivec / Gleevec failed the Indian test for patentability indicates the deficiencies in India’s patent system.

The journey of Glivec / Gleevec through the patent process in India illustrates the difficulties faced in a country in transition. The Indian patent law creates new hurdles for pharmaceutical innovation, unjustifiably and illegally narrowing what is patentable. The list of exclusions under challenge in our legal case includes new chemical compounds (defined as “derivatives of known compounds”), combinations, salts and esters of known compounds. These exclusions, among other therapeutic areas, could impact innovation in HIV/AIDS treatments by denying patents for combination therapies. They could also impact infectious diseases where new antibiotics resulted from introducing new salts and esters of the known compound penicillin.”

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PRE-GRANT OPPOSITION

Health organisations from across the world have came forth in support of the Indian Government in its ongoing legal case against drug manufacturer Novartis and urged the Swiss company to drop its patent case in India.

"The treatment with Gleevac costs Rs 1,20,000 per month for a patient as compared to Rs 8,000 per month with its generics. If Novartis wins the legal battle, it will set a wrong precedent for other patent cases and have widespread implication on provision of other life saving drugs," said Dr Amit Sengupta of People's Health Movement, a health organisation working for the poor people.

"India is an important source of cheap medicines for the developing countries and if Novartis wins the case, it may lead to drying up of a source of affordable medicines to these countries. I urge the Indian Government and Novartis to keep people's health above IPR concerns," said Dr Unni Karunakara of Médecins Sans Frontières, another health organisation.

About 67 per cent of medicines produced in India are distributed to developing countries. Further, about 50 per cent of the essential medicines distributed by UNICEF in the developing world come from India, according to these health organisations.

Utilising the pre-grant opposition procedure, public interest groups (like the CPAA) and generic companies challenged the patent application on Glivec. The patent application has been opposed mainly on five grounds.

First, that there is prior publication of the invention through patent applications filed in many countries, including Canada and the US, in 1993, by taking priority from the Swiss applications filed in 1992. Claims in the patent applications show that the patent is granted not on the compound in its free state but also for the salt form of Imatinib mesylate . In fact, the patent specification filed in the US states: ‘Owing to the close relationship between the novel compounds in free form and in the form of their salts, including those salts that can be used as intermediates, for example in the purification of the novel compounds or for the identification thereof, here before and hereinafter any reference to the free compounds should be understood as including the corresponding salts, where appropriate and expedient.'

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Second, it was stated that there is no inventive step involved in the making of the beta crystal form of I matinib mesylate . According to the opposition, it was stated that specification does not disclose any technical advancement for making the beta crystal form, and the process disclosed in the specification is too obvious to the person skilled in the art. Hence, the patent applications fail to satisfy the inventive step.

Third, it was argued that the crystal salt form does not amount to invention, since there are well-known methods of making salt from the free base of I matinib mesylate . The specification describes the same methods and therefore it does not amount to an invention.

Fourth, it was pleaded that the patent application does not claim any added therapeutic efficacy either from the free base or from the alpha crystal form disclosed in the earlier applications. Hence, the patent application cannot satisfy the scrutiny of Section 3 (d) of the Patents Act.

Fifth, it was contended that at the time of filing the patent application in 1998, Switzerland was not recognised as a convention country in India . Therefore, a patent application from Switzerland is not eligible for the one-year priority available to applications from convention countries. However, Novartis filed the patent application one year from the date of the initial filing in Switzerland ; it therefore was no longer novel.

Accepting these objections, the Patents Office rejected Novartis' patent application on beta crystaline salt of I matinib mesylate in January 2006. Challenging the decision, Novartis filed two writ petitions: one challenging the order of the Patents Office refusing to grant a patent for beta crystalline salt of I matinib mesylate, and the other challenging the constitutional validity of Section 3 (d) of the Indian Patents Act. Subsequently, the first petition challenging the decision of the Controller of Patents was transferred to the Intellectual Property Appellate Board (IPAB) by the Madras High Court. This is still pending with the IPAB. The second petition is known as the Section 3 (d) petition.

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COURT DECISION

The court refused to examine whether Section 3 (d) violates the obligations under the TRIPS Agreement and held that “ …this court has no jurisdiction to decide the validity of the amended section, being in violation of Article 27 of TRIPS, we are not going into the question (of) whether any individual is conferred with an enforceable right under TRIPS or not. For the same reason, we also hold that we are deciding the issue namely, whether the amended section is compatible (with) Article 27 of TRIPS or not”.

In fact, the court urged Novartis AG (Switzerland) to resort to the disputes settlement mechanism provided under the WTO framework. The very next day, the Federal Councillor, Department of Economic Affairs for the Swiss Confederation, stated: “We must have a reliable TRIPS system and the one in India is good enough. The Swiss government never gets involved in any judicial pronouncements of other countries.” This effectively ruled out the possibility of approaching the WTO disputes settlement body.

On the issue of Section 3 (d) being violative of right to equality owing to the arbitrariness and vagueness of the phraseology, the court held that “… in sum and substance what the amended section with the explanation prescribes is the test to decide whether the discovery is an invention or not is that the patent applicant should show the discovery has resulted in the enhancement of the known efficacy of that substance and if the discovery is nothing other than the derivative of a known substance, then, it must be shown that the properties in the derivatives differ significantly with regard to efficacy”.

The court also clarified the meaning of the term ‘efficacy'. According to the court “…the meaning of the word efficacy and therapeutic effect… what the patent applicant is expected to show is, how effective the new discovery made would be in healing a disease/having a good effect on the body ”. Thus the court equated the meaning of efficacy with a therapeutic effect on the body. While doing so, the court also accepted the argument of the respondents that “… petitioner is not a novice to the pharmacology field but it being pharmaceutical giant in the whole of the world, cannot plead that they don't know what is meant by enhancement of a known efficacy and they cannot show the derivatives differ significantly in properties with regard to efficacy ”.

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Hence it was held that a patent applicant has to show enhanced therapeutic effect in order to obtain a patent for a new form of a known substance or for its derivatives. Therefore the court held that Section 3 (d) is not violative of Article 14 of the Constitution of India.

CONCLUSION

The judgment was welcomed globally by treatment activists and public interest groups. While disagreeing with the judgment, Novartis stated that it may not appeal to the Supreme Court of India, whose judgment is the law of the land. However, Novartis warned that the court ruling would discourage much required investments in drug innovation. Along the same lines, the US-India Business Council (USIBC) demanded changes in the Indian law to encourage investments. The empirical evidence suggests there is no need to take these threats seriously.

As far as the implication of the judgment is concerned, it suggests that the meaning of the term ‘efficacy' should be judged in light of the therapeutic effect of the new form on the body. Hence, the burden of proof is on the applicant to show the enhanced efficacy. However, the application of therapeutic effect as a benchmark for efficacy does not shut out the possibility of evergreening of patents. For instance, a combination of two drugs may offer substantial improvement in therapeutic effect and may be held patentable. Further, this judgment is still a high court decision, and is yet to gain the status of the law of the land. Nevertheless, it will have a persuasive effect as far as high courts are concerned.

The present judgment only upholds the constitutional validity of Section 3 (d) 1. However, the real success of this judgment can be measured only when the Patents Office and the courts apply it on a case-by-case basis.

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