Novartis AG v. Union of India, (2007)

High Court decision regarding the constitutionality of Section 3(d) of the 2005 Amendment to India’s Patent Law concerning the requirement for an invention to show an “enhanced efficacy” if based on a known substance. A pharmaceutical company’s modification of an existing drug was denied a patent in India for not meeting Section 3(d) requirements, and they subsequently  petitioned the Madras High Court arguing that Section 3(d) was unclear, arbitrary, and discriminatory so as to be unconstitutional. The Court upheld Section 3(d).

Date of the Ruling: 
Aug 6 2007
Madras High Court
Type of Forum: 

This case concerns the constitutionality of Section 3(d) of the 2005 Amendment (“Amendment”) to India’s Patent Law, which was added to comply with Trade-Related Aspects of Intellectual Property Rights (TRIPS) and World Trade Organization’s (WTO) minimum standards for protecting intellectual property.  Section 3(d) requires that inventions based on a known substance be patentable only if they show the “enhanced efficacy” of the known substance.  Novartis, a large pharmaceutical company, submitted a patent application for its leukemia medication, Gleevec.  Novartis’ application was denied on the grounds that the medication was a reformulation of an older drug already patented by Novartis under India’s Patent Law.  It was therefore not patentable under Section 3(d).  Novartis petitioned the Madras High Court claiming the invalidation of Section 3(d) on jurisdictional and constitutional grounds.

The Madras High Court ruled that Indian courts do not have jurisdiction to rule on a case concerning Indian law under an international treaty.  Due to this restriction, the Court could not make a ruling as to whether Section 3(d) is in compliance with TRIPS, as requested by Novartis.  The Court did find, however, that Section 3(d) was not in violation of the Indian Constitution.  Novartis had argued that Section 3(d)’s requirement of “enhanced efficacy” was ambiguous and unclear and that the section was arbitrarily enacted.  The Court did not agree and stated that generally it is up to the courts to interpret statutory language according to the facts of each case.  The Court also stated that the enactment of Section 3(d) was not arbitrary, pointing to the debates over access to medicine that led to the passage of the Amendment.

Novartis also argued that Section 3(d) gave the Patent Controller too much discretionary power so as to lead to discriminatory behavior.  The Court disagreed, stating that discretionary power does not necessarily lead to discriminatory behavior.  There cannot be an assumption that the possibility of the abuse of provision is grounds for holding that provision to be abusive.  Additionally, courts should give greater latitude to laws dealing economic regulation.

Enforcement of the Decision and Outcomes: 

The denial of Novartis’ patent application for its leukemia drug was upheld for not meeting Section 3(d) requirements.  Novartis subsequently appealed to the Indian Supreme Court in Delhi.  On April 1, 2013, the Indian Supreme Court upheld Section 3(d) in India’s Patent Law as constitutional.

Significance of the Case: 

This case, and the subsequent ruling by the Indian Supreme Court, shows the divide between pharmaceutical companies and the Indian state’s position on affordable drugs. Had Novartis been successful in eliminating Section 3(d) from India’s Patent Law, the price of medicine in India would increase exponentially, eliminating access to medication for a large proportion of the second most populated country on the planet.  Although India had to amend its patent laws to comply with WTO requirements, the Indian legislature inserted Section 3(d) in order to protect access to medicine, and the Supreme Court judgment consolidates Section 3(d).

For their contributions, special thanks to ESCR-Net member: the Program on Human Rights and the Global Economy (PHRGE) at Northeastern University.