[Ip-health] Synopsis of Novartis Judgment

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  [Note: We will be posting the offical certified copy of the Madras High C=
ourt's judgment on our website (www.lawyerscollective.org) later today or t=
omorrow.  The certified copy contains corrections to a few clerical errors =
that were contained in the advance copy that we obtained and posted on our =
website yesterday.  Please refer to the certified copy for any official pur=
poses.]

  A brief synopsis of the 89-page judgment follows:


  =93We have borne in mind the object which the Amending Act wanted to achi=
eve, namely=85to provide easy access to the citizens of this country to lif=
e saving drugs and to discharge their Constitutional obligation of providin=
g good health care to its citizens.=94

  With this bold affirmation of the State=92s fundamental duty to ensure ac=
cess to medicines for all, a division bench of the Madras High Court dismis=
sed a challenge to section 3(d) of the Indian Patents Act, 1970 filed by Sw=
iss pharmaceutical multinational Novartis AG and its Indian subsidiary, Nov=
artis India. These petitions challenged the validity of a key provision in =
the Indian law, which seeks to prevent ever greening and which provided one=
 of several grounds on which the Patent Controller rejected Novartis AG's p=
atent application for the beta-crystalline form of Imatinib Mesylate, brand=
 name Glivec (Gleevec).

  In March 2005, with retrospective effect from 1 January 2005, the Indian =
Parliament amended its patent law to protect product patent protection. A s=
ignificant and important provision was introduced to prevent evergreening a=
nd the granting of frivolous patents, section 3(d).

  In May 2006, Novartis filed writ petitions before the Madras High Court, =
claiming that the Patent Controller erred in rejecting its patent applicati=
on, and further claiming that section 3(d) was, among other things, vague, =
ambiguous, and contrary to the requirements of the TRIPS Agreement.

  In the challenge to section 3(d), Novartis argued that this provision is =
not in compliance with the TRIPS Agreement and that it is in violation with=
 the government's (non-enforceable) constitutional duty to harmonise its do=
mestic laws with its international obligations. Recognising the fact that t=
he TRIPS agreement is non-self executing and provides no private right of e=
nforcement, Novartis advanced a somewhat novel claim that while it is open =
for the Indian Parliament to repudiate its international obligations altoge=
ther, it is somehow invalid and unconstitutional for Parliament to otherwis=
e comply with TRIPS except for one particular provision.   The Government o=
f India, CPAA and the generic companies responded that neither could privat=
e companies such as Novartis challenge a law as being TRIPS non-compliant n=
or could an Indian court decide whether the Indian patent law is TRIPS comp=
liant or not. The appropriate forum, they argued, is the WTO Disputes Settl=
ement Body.

  The Madras High Court agreed with the respondents, holding that =93when a=
 domestic law is challenged on the ground of it being in violation of an In=
ternational Treaty, domestic courts=85have no jurisdiction.=94  The Court a=
lso noted that the sole and exclusive forum for determining TRIPS-complianc=
e was, by the terms of the TRIPS Agreement itself, the WTO Disputes Settlem=
ent Body.  The Court found =93no compelling reasons=94 to disregard the exp=
ress and exclusive choice of forum negotiated and agreed to by the member s=
tates of the WTO.  Because it found that it lacked jurisdiction to decide s=
uch issues, the Court declined to address the issue of whether section 3(d)=
 was in compliance with the TRIPS Agreement.

  In an alternative prayer, Novartis had asked the Court in the event that =
it determined that it lacked the power to strike down section 3(d), to simp=
ly issue a declaration that section 3(d) was not in compliance with the TRI=
PS Agreement.  Again, in an exercise of judicial restraint, the Court decli=
ned to do so, noting that even if it had the power to grant such a declarat=
ion, such relief would be meaningless, as it  =93would be only on paper, on=
 the basis of which the petitioner cannot claim any further relief in the I=
ndian courts.=94

  The other ground of challenge raised by Novartis was that the use of the =
term "efficacy" in section 3(d) is vague and ambiguous, and therefore viola=
tes the equality provision (Article 14) of the Indian Constitution. Novarti=
s contended that because there was no clarity as to what constituted "enhan=
cement of efficacy" and "significant enhancement of efficacy" as required b=
y section 3(d), the law was vague and lent itself to arbitrary decisions by=
 the Patent Controller.   The Government of India, CPAA and generic compani=
es argued that section 3(d) is not in violation the equality provision of t=
he Indian Constitution as the concept of efficacy is well-known to persons =
in the pharmaceutical industry and it is impossible to lay down a "one size=
 fits all" standard to determine what constitutes a significant enhancement=
 of efficacy.

  Again, the Madras High Court agreed with the respondents, holding that th=
e concept of =93enhancement of efficacy=94 had clear meaning in the field. =
 =93Therefore it is a simple exercise=85for any Patent applicant to place o=
n record what is the therapeutic effect/efficacy of a known substance and w=
hat is the enhancement in that known efficacy.=94  The Court further held t=
hat the fact that the term =93significant=94 was left undefined was insuffi=
cient to render the provision vague and ambiguous, and that it was a perfec=
tly valid exercise of the legislative powers of Parliament to use broad, un=
defined terms to be interpreted and applied across a myriad of factual circ=
umstances by the Patent Offices and ultimately, the courts.  Rejecting Nova=
rtis=92 contention that the lack of guidelines for determining enhanced eff=
icacy would result in arbitrariness, the Court found that =93there are in-b=
uilt materials in [section 3(d)] which would control/guide the discretion t=
o be exercised by the [Patent
 Controller].=94

  Having thus disposed of Novartis=92 contentions, the Madras High Court di=
smissed the writ petitions challenging the validity of section 3(d) in thei=
r entirety.  Novartis' challenge to the Patent Controller's decision, which=
 was filed before the Madras High Court, has been subsequently transferred =
to and is pending before the Intellectual Property Appellate Board.

  Lawyers Collective HIV/AIDS Unit