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Drugs in 3(d) and What Matters in the Novartis Case at Supreme Court: Dwijen Rangnekar

August 21, 2012



Glivec (called Gliveec in the US) is a drug for chronic myelogenous leukaemia (CML) – a rare and debilitating form of cancer. A Novartis drug, it has been heralded as a sign of pioneering pharmaceutical research. And, no doubt, it is a ‘life-saving’ drug; though, it also has to be taken life-long. Most narratives of the research pathways of Glivec gloss over the 40+ years of publicly funded and conducted research that isolated the cause, a BCR-ABL oncogene, and performed the initial clinical research that identified a promising candidate (STI 571 – imatinib mesylate). Novartis, the Swiss-headquartered pharma transnational, proceeded to synthesise and test STI 571, which in 1993 was patented. Further research found that a beta crystalline form of imatinib mesylate was more stable – and this was also patented (in 1997) and approved in the US in 2001. In 1998, a patent application for this beta crystalline form was filed in India – and this is in dispute here.

Section 3(d) is a provision in India’s patent law – and is unique to India; though, as explained in the article, it reflects a wider authorship of global public concern. The section was introduced in the third amendment to Patent Act, 1970 (i.e. The Patents (Amendment) Act, 2005) when India was fulfilling its final commitments to patent-related obligations at TRIPS. Written in technologically neutral language, 3(d) seeks to deny the availability of patents where a ‘new form of a known substance … does not result in the enhancement of the known efficacy of that substance’. This, along with other provisions, would hopefully make it more difficult to patent trivial and incremental modifications to a drug; thus, extending patent terms and delaying entry of generic alternatives.In the case of Glivec, when the patent application came up for review in mid-2005, a number of domestic pharmaceutical firms and patient groups lodged oppositions with the Patent Controller, variously claiming that it was either ‘anticipated’, ‘obvious’, foul of 3(d), among others. In January 2006, the Controller passed judgement denying Novartis a patent on Glivec, which Novartis swiftly challenged. It lodged an appeal in the Madras High Court on two counts: seeking reversal of the Patent Controller’s decision and claiming that 3(d) was unconstitutional and violates TRIPS. The first writ was transferred to the newly constituted Intellectual Property Appellate Board (IPAB), and the Madras High Court, in July 2007, set aside questions of TRIPS-compatibility while finding that 3(d) was constitutional. On the patentability question, in July 2009, the IPAB found that while Glivec fulfils requirements for inventiveness and wasn’t anticipated, it fails to meet the 3(d) test. And, this is being challenged at the Supreme Court. As 3(d) is unique to India, this is also the first instance for the courts to deliberate on 3(d)-like provision. While for Novartis the case is about their blockbuster drug, the case is about thinking around TRIPS to arrest perverse patenting behaviour and make drugs available.


In a few days the Supreme Court decides on the rejection of a patent for Glivec. A much awaited decision, not least in India; but globally as the case concerns exclusions from patentability and social commitments to ensuring access to medicine. Even as section 3(d) is unique to India, it is authored by an ever-growing public concerns about overzealous patenting. The case has been controversial with oppositions to appointments and recusals of Justices. Readers will also recall allegations of plagiarism raised against the Mashelkar Committee’s report on section 3(d). Pressure on Novartis to withdraw the challenge comes from a variety of civil society groups and also the company’s shareholders. For that matter, Brian Drucker, the ‘inventor’ of Glivec, considers Novartis’s behaviour as an “abuse” in “seeking patents over minor changes to extend monopoly prices”.

At issue is not the mere rejection of Novartis’s patent. Rather, section 3(d) must be read as resistance to the global ratcheting-up of patents. Unlike some southern WTO members, such as Brazil, India used every available transition measure to deliberate on how best to revise its domestic patent laws whilst also dealing with perverse patenting behaviour. The latter is well-documented in a US Federal Trade Commission’s Report, ironically titled ‘To Promote Innovation’, with evidence of patent stacking, overlapping and multiple patents – corporate practices compounded by low quality patent examination. This is extenuated in pharmaceuticals and biotechnology where an individual firm organised a patent thicket around a single molecule when minor modifications such as changes in size, colour, dosage, delivery mechanism and composition, are either simultaneously or sequentially patented. Evidence in a widely cited study by the National Institute of Health Care Management, Changing Patterns of Pharmaceutical Innovation, is telling. Between 1989 and 2000 the US Food and Drug Authority approved 1,035 new drug applications – of these, 65% contained active ingredients that were already on the market (i.e. incrementally modified drugs) and 11% were identical. Overall, only 15% were considered ‘highly innovative drug’ category, i.e. medicines with new active ingredients and/or contributing significant clinical improvement. These patenting strategies substantially delay the entry of generic substitutes; thus sustaining an oligopolistic market structures, especially at the therapeutic level, with high drug prices.

One policy option to arrest this behaviour has been to allow third-party filing of pre- and/or post-grant opposition to patents. Not unique to India, these measures were considered by the US FTC; though, they only recommended introducing post-grant opposition. However, section 3(d) is unique to India even if its captures this wider public concern about patent thickets and incremental drug modifications. The provision sets out to deny patents where a ‘new form of a known substance … does not result in the enhancement of the known efficacy of that substance’.

Recall that the first ever TRIPS dispute was raised by the US against India – and, rather swiftly after the deadline for the obligations concerning mail-box provisions and EMRs. In contrast, despite regular bluster from Novartis and the annual rhetoric of Northern pharmaceutical companies in their submissions to the US Trade Representative, the third amendment of 2005 hasn’t invited any WTO dispute. Actually, much the opposite: a 2007 Trade Policy Review saw India handle questions about 3(d) with much ease. And, 3(d) is well received in a number of forums, such as the World Health Organisation Report on Public Health – and is being ‘copied’ by other Southern nations, too. For that matter, a number of recent articles in both British and US medical journals speak to similar ideas to arrest the disease of me-too drugs.

In India, the patent application was filed in July 1998 at a time when, exercising TRIPS exemptions, product patents in pharmaceuticals weren’t available. Yet, there was an obligation to accept applications in a ‘mail box’ and, emptying the benefits of this exemption, grant more-or-less full patent-like rights called ‘exclusive marketing rights’. With the EMR granted in November 2003, Novartis swiftly secured injunctions against a host of firms (e.g. Adarsh, Ranbaxy, and CIPLA) to stop competitive generic alternatives. Importantly, a Bombay High Court disagreed with the injunctions, while also noting that Novartis was only importing the drug; thus, the limited domestic availability with Novartis’s high-price strategy caused a “great prejudice to public health and public interest”. As the mailbox opened in mid-2005 – so did a series of lurking questions about the patentability of Glivec: questions about lack of novelty, the possibilities of prior anticipation, whether it was obvious and whether it falls foul of 3(d). For the lawyer-junkie, there were other issues too, such as wrongful priority. To cut a long story short: the patent was rejected by the Controller on a series of grounds – a decision upheld by the Intellectual Property Appellate Body in July 2009. Though, the latter’s judgement is intelligently nuanced: it found that the patent did fulfil requirements for inventiveness and wasn’t anticipated, though, agreed with the Controller that it fell foul of 3(d).

Before attending to the way IPAB handled 3(d), I want to note a few points that have publicly circulated. There is a suggestion that section 3(d), introduced only in 2005, should only apply to post-2005 applications as it would be unfair and unethical to do otherwise. Argued differently, it is suggested that pre-2005 applicants should be allowed to submit fresh data when their patent applications are examined. In essence, and in whatever permutation, this asks for section 3(d) to be entirely annulled for applications in the mailbox. Let’s put this in numbers: 89% of the mailbox applications (7,953 out of 8,926) are for pharmaceutical products. Recalling the NIHCM report – and the FDA’s own assessment that only 11% of the 1,035 drugs in the 1989-2000 period were ‘highly innovative’ – brings out how this solution is quite disingenuous as it evacuates 3(d) from a vast array of patents.

Another minor issue circulating in some commentaries is that the IPAB decision to deny the patent hinges on – or at least partly hinges on – section 3(b) which states,

an invention the primary or intended use or commercial exploitation of which couldbecontrarytobepublicorderormoralityorwhichcausesseriousprejudice to human,animal,plantlifeorhealthortotheenvironment

Based on TRIPS Article 27.2, the section is a long-standing exception from patentability reflecting ideas of just society and morality. There is ample jurisprudence to elaborate on how the cultural specificities of morality and just society have been legally translated. On a TRIPS interpretation of the borderlines of this exception – the jury is out as there hasn’t been a dispute on this clause, unlikely as it would be for such a dispute to arise. However, implicating section 3(b) in this case suggests a distracting diversion. No doubt, the IPAB judgement states that “we observe that the Appellant’s alleged invention won’t be worthy of a reward of any product patent on the basis of its impugned application for not only for not satisfying the requirement of section 3(d) of the Act, but also for its possible disastrous consequences on such grant as stated above, which also is being attracted by the provisions of section 3(b) of the Act which prohibits grant of patent on inventions, exploitation of which could create public disorder among other things”. And, it states this after noting that Novartis charges Rs. 1,20,000 for a month’s supply of Glivec. However, this is stated in closing on the penultimate page of a 95+ page judgement – where, in total, 3(b) is noted possibly twice only! As such, section 3(b) is hardly the crux of the issue and barely figures in the reasoning of IPAB.

The crux of the matter is 3(d), which 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 new use for a known substance or of the mere use of a known process, machine or apparatus unless such process results in a new product or employs at least one new reactant.

With the following explanation appended:

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 properties with regard to efficacy.

Though the litigation raises an array of points about 3(d), attention centres on the demonstration of “enhancement of the known efficacy” with a sense that it should “differ significantly in properties with regard to efficacy”. IPAB noted that ‘significant’ hasn’t been defined in the legislation and concluded that “it is not possible to quantify this term by any general formula” and that an assessment would “vary from case to case”. This seems reasonable.

In explicating the term ‘efficacy’, IPAB re-confirmed the Madras High Court’s reading of 3(d) that efficacy is a pharmacological idea associated with the ability of a drug to produce a desired therapeutic effect independent of potency, i.e. “healing of disease”. Stating this whilst reiterating the ethic and intent that authored 3(d): an effort to arrest corporate patenting that generates patent thickets and ever-greening. In navigating this notion of efficacy, Novartis adopted a two-track strategy. On the one hand, seeking to set out that bioavailability is one-and-the-same as efficacy and, alternatively, that the advantageous properties of Glivec confirmed ‘enhanced efficacy’. On the first front, it sought to demonstrate that the 30% increase in bioavailability (data and experiments remain disputed) is evidence of increased efficacy. However, IPAB remained unconvinced with this argument, noting that bioavailability is concerned with the amount of the drug that is absorbed by the body – whereas, the effect of a drug depends on how the active ingredient attaches to the target cells. Dismissing the argument, IPAB asked rhetorically, “[I]f a dose of a drug is increased to double with respect to the recommended dose would the healing process be enhanced to double. We don’t believe so”. Novartis’s second line of argument was to draw attention to a number of advantageous properties that it saw as demonstrating ‘enhanced efficacy’. In particular, it pointed to better shelf life, better storability and improved flow properties. IPAB saw these as improving the functionality and presentability of the drug; but, didn’t consider them as having any relationship to the curing effect, the efficacy, of the drug. Thus, on both scores, it dismissed Novartis’s argument.

These are early days for 3(d) – and as it is unique to India, there isn’t directly applicable case law to reflect upon. Further, as the provision is technologically neutral, it would help that a cautious and reticent approach is taken by the judges in parsing out 3(d). To an extent, the lower courts have provided some useful parameters that could be reiterated. For one, ‘efficacy’ will necessarily be dependent on the technological sector; thus, prohibits the possibility of a general / quantifiable rule. It may itself have a temporal dimension – in that as science and technology develop and stabilise along particular pathways, particular technological achievements are considered mundane rather than inventive. The lower courts have also pronounced that for pharmaceutical products the idea of efficacy is necessarily therapeutic. It makes full sense for this to be reasserted. No doubt, a number of developments around a given substance, as in the case of Glivec, are important and add to the product. For instance, improved absorption, better storability, etc.; however, these, as the IPAB concluded, are “presentational” and do not render a significant change in the efficacy of the drug. To elaborate, one of the aspects of ever-greening in pharmaceutical is to pursue a spectrum of pathways to incrementally modify a single drug; thus, deepening the patent thicket and delaying generic entry. While some of these incrementally modified drugs may be ‘better’ – they rarely are therapeutically ‘better’.

Rendering efficacy, with respect to pharmaceuticals, to a therapeutic test would be consistent with the ethic and intent that authored 3(d). Some commentators have argued for a looser definition – for a definition that would consider any advantageous property as efficacious. In support of this argument, it is suggested that a looser definition would be of help to Indian pharma which evidently excels in new drug delivery systems. There is no empirical evidence or theoretical framework from which to make a robust assessment whether a looser standard would benefit Indian pharma (and not non-Indian pharma). For that matter, this argument glosses a fundamental point: how would an Indian pharmaceutical company work on a new drug delivery system for a drug that is patented by another company in the very first place? This puzzle aside, the issue at hand is not in explicating 3(d) with the interests of a particular industrial group in mind; but, in un-packing 3(d) in line with the intent and ethic of its authorship.

Dwijen Rangnekar is Associate Professor of Law at the University of Warwick, UK and can be reached at

3 Comments leave one →
  1. August 21, 2012 4:29 PM

    Good article. Could have been further simplified though. I think a mechanism must be in place to reimburse the high costs incurred by companies to develop a drug.

    To say that Novartis merely tweaked an existing known compound and should be denied a patent, is an exercise in sophistry. After all, Bill Gates came up with the idea of a smart phone on the lines of the present day iphone in 1998, but failed to invent it. Could he then sue Apple for stealing his idea? Not really.

    Similarly, companies spend tonnes of money on research and clinical developments only to receive generic threats, which kills development of new drugs. If the government can step in to buy these drugs from companies and subsidise them, it would be much easier for the general good and the company.

    But then, we’re talking about politics and the holy world of politicians.

    Thank you for the article.

  2. Hasan permalink
    August 21, 2012 7:53 PM


    Thanks for a good post. I have a question about rejection of patent application on the basis of novelty and inventive step arguments. You mentioned that IPAB reversed the findings of the patent office on nonobviousness. If that is right then what was finding of IPAB on novelty issue? Moreover, isn’t it that Section 3(d) is an elaboration of inventive step requirement? If so (if not so then what is the status of section 3(d)?) how can we say that invention satisfies inventiveness requirement but does not meet 3 (d) criteria. To me not meeting 3 (d) standard automatically means that it is not inventive in Indian context. On thing more about Madras High Court judgment. Wasn’t it that the High Court also upheld the rejection on the all basis: lack of novelty, lack of inventive step, failing to meet 3(d)?

  3. Ravi permalink
    August 21, 2012 8:26 PM

    Adithya, the author is not arguing against patents as such. It is the measures pharma companies take to extend the legally available 17 years of patent protection that 3(d) addresses. I am surprised that such an amendment exists in India. Pharma companies will go to any extent to continue their monopoly. Also note that, at least in case of glivec there was a long public funded research and Novartis benefited from it without having to share any profits. This is often the case (at least I think it is) in case of drug research.

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