[Ip-health] Novartis Update, 16.02.07

[chan park]

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The Madras High Court, before Justices Mr Balasubramaniam, and Ms Prabha Sr=
idevan, continued hearing the Novartis matter today.  Mr Soli Sarabjee, for=
mer Attorney General of India, appeared for Novartis AG in the petition cha=
llenging the constitutionality of section 3(d).

  Mr. Sarabjee began his argument by referring to Articles 1 and 27 of the =
TRIPS agreement, and pointed out that there was a binding obligation on Ind=
ia to introduce a law in accordance with Art 27 of the TRIPS agreement, whi=
ch requires member states to provide patent protection for all inventions, =
provided that they are new, inventive and capable of industrial application=
.  (See bottom of e-mail for the text of the written submission he presente=
d to the Court in connection with his argument)

  He then traced the legislative history of the 2005 amendment to the India=
n Patents Act, and referred to the Statement of Objects and Reasons (SoR) o=
f the amendment, and emphasised that the SoR explicitly acknowledged the ob=
ligation that India had to introduce a TRIPS compliant law.  From this, he =
argued that India had a conscious obligation to introduce a TRIPS compliant=
 law.

  He then pointed out that in prior versions of Section 3(d) before the pas=
sing of the Patent Amendment Act, the clause =93a new form of a known subst=
ance which does not result in the enhancement of the known efficacy of that=
 substance=94 was not in the original ordinance.  He contended that that th=
is portion, as well as the corresponding explanation, were unique to India =
and did not find a place in any patent law in the world.  This, in conjunct=
ion with the fact the provision was introduced by Parliament at the last mi=
nute indicated that it was in violation of Article 27 of TRIPS and irration=
al.

  It was his contention that section 3(d) restricted patents to new chemica=
l entities.  In this context, he referred to the Mashelkar Committee report=
, which concluded that it would be a violation of TRIPS if the patenting of=
 pharmaceutical products were restricted to new chemical entities.  He also=
 argued that implicitly, the Mashelkar Committee actually held that Section=
 3(d) was also not in compliance with the TRIPS agreement.

  At this stage, J. Sridevan interjected, stating that the Mashelkar Commit=
tee did not say anything relevant on the matter, as the term =93new chemica=
l entity=94 occurs nowhere in the Patents Act.  She also pointed out that i=
t appeared that Section 3(d) merely explained the term =93new=94 in article=
 27 of TRIPS and allows patents to be granted to new forms if they are more=
 efficacious.

  Mr. Sarabjee replied that to the extent the explanation to Section 3(d) d=
eemed derivatives of known substances to be the same substance, it prevente=
d the grant of patents to substances that otherwise meet the requirements o=
f novelty, inventive step and industrial application.

  Mr. Sargabjee then argued that =93efficacy=94 was not a term used in pate=
nt laws of other countries, that it was not defined and that it was vague. =
He argued that the term =93significant=94 was also vague, and no standard f=
or determining significance was set out in the law.  He claimed that both t=
hese expressions, =93significantly=94 and =93efficacy=94 conferred upon on =
the patent controller unguided power, rendering it arbitrary.

  Mr. Shanti Bhushan, also appearing for Novartis, argued that the Court di=
d have jurisdiction to declare a provision of a statute as incompatible wit=
h an international treaty or an agreement, relying on a U.K. judgment from =
the House of Lords in Equal Opportunities Commission v. Secretary of State.

  Mr. Bhushan also argued that the issue at stake was whether innovative re=
search should be encouraged or inhibited.  He seriously contended that if t=
he logic of Section 3(d) was accepted, then nothing would be patentable bec=
ause everything ultimately was a combination of known elements such as carb=
on, hydrogen, oxygen and nitrogen.

  After Novartis finished their arguments with respect to Section 3(d), the=
 parties moved on to the issue of whether it was appropriate to convert Nov=
artis=92 writ petition challenging the Patent Examiner=92s decision into an=
 appeal.  Mr. Bhushan assured the Court that Novartis would not be adding a=
ny new grounds or introducing new facts if the conversion was allowed.  The=
 respondents opposed the application by Novartis AG to convert their writ p=
etition challenging the patent controller=92s order into an appeal.

  The Court then adjourned until Thursday, 22 February.  Beginning then, th=
e issue of conversion will be fully argued and decided, and the respondents=
 will be given the opportunity to respond the Novartis=92 arguments regardi=
ng Section 3(d).

  We will resume our updates when the hearing resumes.

  From Chennai,

  Lawyers Collective HIV/AIDS Unit Team
  Anand
  Chan
  Julie
  Prafulla

  Below is the text from the written submission submitted by Mr. Sarabjee d=
uring his argument:

  Propositions of Mr.Soli Sarabjee, Sr. Advocate, on behalf of the Petition=
er
  1)      Section 3(d) as amended is in clear breach of Article 27 of TRIPS

  2)      Legislation in breach of India s accepted international obligatio=
ns and which would invite retaliatory action under the WTO and lead to eros=
ion of India credibility in the international field suffers from the vice o=
f irrationality and arbitrariness and is violative of art. 14.

  3)      Alternatively, section 3 (d) is violative of art. 14 because the =
concept of =93enhancement of the known efficacy=94 is totally vague and und=
efined.

  4)      The explanation insofar as it creates a fiction whereby derivativ=
es of known substances are deemed or considered to be the same substance ev=
en though factually they may constitute a different substance, is absolutel=
y irrational and arbitrary.

  5)      The expression =93unless they differ significantly in properties =
in regard to efficacy=94 is vague and nebulous. The explanation does not af=
ford any guidance as to what constitutes significant difference in properti=
es. No guidelines are statutorily laid down for the exercise of power of re=
jection of a patent application on the ground mentioned in sec 3 (d).




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