Novartis AG v. Union of India and Others (2013)(6 SCC 1; AIR 2013 SC 1311)

This case analysis is written by Disha Hirwani, she is a 2nd-semester LL.B. student at Aishwarya College of Education and Law. She also serves as an author at Lexful Legal.

Court: Supreme Court of India
Bench: Aftab Alam, J. Ranjana Prakash Desai
Date of Judgment: 1 April 2013

Relevant Provisions or Statutes:

1. The Patents Act, 1970 (amended in 2005)

• Section 2(1)(j) –Definition of Invention
• Section 3(d) – Non-patentable Inventions
• Section 83
• Section 84

2. TRIPS Agreement
(Agreement on Trade Related Aspects of Intellectual Property Rights, 1995)

Facts of the Case

• The case was about a cancer medicine called Glevic, made by Novartis AG, a Swiss pharmaceutical company.
• The drug is used to treat chronic myeloid leukaemia and gastrointestinal stromal tumours.
• In 1998, Novartis applied for a patent in India for the beta crystalline form of Glevic, claiming it was a new and more effective version of the known compound.
• At that time, India had recently amended its Patents Act, 1970, to comply with the TRIPS Agreement, allowing product patents for medicines.
• In 2006, the Indian Patent Office rejected Novartis’s application under Section 3(d) of the Patents Act.
• The Patent Office said the new form of the drug was not truly new but just a modified version of an already known substance.
• Novartis appealed to the Intellectual Property Appellate Board.
• The Board agreed with the Patent Office, stating that even if the drug had better bioavailability, it did not necessarily mean better therapeutic effect for patients.
• Novartis then went to the Supreme Court of India in 2009.
• It challenged both the rejection of its patent and the validity of Section 3(d), claiming that the Section was vague, unfair, and against India’s obligations under the TRIPS agreement.
• Many NGOs and health organisations like the Cancer Patients Aid Association opposed Novartis’s petition.
• They argued that if Novartis got the patent, Indian companies would not be able to produce cheaper generic versions, and thousands of patients would lose access to affordable cancer treatment.
• Novartis sold Glevic for around ₹1,20,000 per month, while Indian generic companies sold the same medicine for about ₹8,000–₹10,000 per month.

Legal Issues

1. Whether the beta-crystalline form of Imatinib Mesylate is an invention under Section 2(1)(j) and 2(1)(j)(a) of the Patents Act?
2. Whether it is excluded from patentability under Section 3(d) for being merely a new form of a known substance without enhanced efficiency?
3. Whether Section 3(d) violates Article 14 of the Constitution or India’s TRIPS obligations?

Arguments by Novartis

Novartis argued that the beta-crystalline form of Imatinib Mesylate was a new and inventive medicine that deserved patent protection under the Patents Act, 1970. The company stated that this new form of the drug possessed improved properties, including greater stability, easier storage, and easier handling during manufacturing.

They also claimed that this version of the drug had approximately 30% higher bioavailability, meaning it was more readily absorbed in the human body. Because of this, Novartis said the new form had a better therapeutic effect, which should qualify as “enhanced efficiency” under Section 3(d) of the Patents Act.

Novartis further argued that Section 3(d) was unclear and unfair since it had not properly explained what counts as an increase in efficiency. They said this gave too much power to patent officers and violated the right to equality under Article 14 of the Constitution.

Arguments from the Government of India

The Government argued that the beta-crystalline form of Imatinib Mesylate was not a new invention but only a minor modification of an already known drug and therefore not patentable under the Patents Act, 1970.

They stated that Novartis failed to prove enhanced therapeutic efficiency as required under Section 3(d). Improved bioavailability alone did not mean that the drug worked better for patients. Section 3(d) was introduced to prevent evergreening and ensure that patents are granted only for genuine innovations.

The respondent also defended Section 3(d) as constitutional and TRIPS complaints, saying it was designed to protect public health and balance rights with affordable access to medicines.

NGOs supporting the Government argued that granting the patent would make Glevic unaffordable for most cancer patients, whereas rejecting it allowed Indian generic companies to continue producing the low-cost versions, ensuring wider access to life-saving treatment.

Judgement

The Supreme Court of India dismissed Novartis’s appeal and refused to grant a patent for the beta-crystalline form of Imatinib Mesylate.

The Court held that Novartis failed to prove enhanced therapeutic efficiency as required under Section 3(d) of the Patents Act 1970. Although the new form of the drug had better bioavailability and physical stability, these improvements did not show that the medicine was more effective in treating cancer. The Court explained that “efficiency” in Section 3(d) means therapeutic efficacy, not just better absorption or storage.

The Court also upheld the validity and constitutionality of Section 3(d), stating that it was a reasonable provision meant to prevent evergreening and ensure that patents are granted only for true innovations that offer real medical benefits.

Further, the Court found no violation of the TRIPS Agreement, saying that India had the right to make laws that protect public health and ensure affordable medicines.

The Court emphasized that patent laws must balance profit with public interest. Granting the patent would have made Glevic too costly, while rejecting is allowed cheaper versions to remain available for patients.

Ratio Decidendi:

The Supreme Court held that an invention of a new form of a known substance must demonstrate enhanced therapeutic efficacy to qualify for patent protection under Section 3(d) of the Patents Act, 1970.

• “Efficacy” in Section 3(d) specifically means therapeutic efficacy, not mere improvements in physical properties like stability, flow rate, or bioavailability.
• Minor modifications or new forms of existing drugs without a real improvement in therapeutic effect cannot be patented.
• The objective of Section 3(d) is to prevent the practice of extending patent monopolies by making trivial changes to known drugs.

Thus, since Novartis’s new form of Imatinib Mesylate did not show enhanced therapeutic efficacy, it did not qualify as an invention under Indian patent law.