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Petitioner: NOVARTIS AG VS Respondent: UNION OF INDIAHonorable Justice Aftab Alam
2013 S C M R 922
[Supreme Court of India]
Present: Aftab Alam and Ranjana Prakash Desai, JJ.
CIVIL APPEALS NOS.2706 - 2716 OF 2013
(Arising out of SLP(C) Nos.20539-20549 of 2009)
NOVARTIS AG---Appellant
Versus
UNION OF INDIA and others---Respondents
CIVIL APPEAL NO.2728 OF 2013
(Arising out of SLP(C) Nos.32706 of 2009)
NATCO PHARMA LTD.---Appellant
Versus
UNION OF INDIA and others---Respondents
CIVIL APPEALS NOS.2717 - 2727 OF 2013
(Arising out of SLP(C) Nos.12984 - 12994 of 2013) SLP(C)......../2011 CC Nos.6667 - 6677
Messrs CANCER PATIENTS AND ASSOCIATION---Appellant
Versus
UNION OF INDIA and others---Respondents
Civil Appeals Nos.2706 - 2716, 2728 and Civil Appeals Nos.2717 - 2727 of 2013, decided on 1st April, 2013.
(a) Patent---
----Grant of patent for a product---Conditions that a product needs to satisfy to qualify as an "invention"---For qualifying as an "invention" a product must be "new"; it must be "capable of being made or used in an industry"; it must come into being as a result of an invention which has a feature that entails technical advancement over existing knowledge, or has an economic significance, and makes the "invention" not obvious to a person skilled in the art.
(b) Patent---
----Pharmaceutical patent---Ever greening of pharmaceutical patent---Pharmaceutical drug derived from a patented chemical compound/ substance---Grant of patent for such a drug---Scope---Legal requirement that patent for such a drug could only be granted if it qualified as an "invention"---Multi-national pharmaceutical company ("company") had a patent for a chemical compound with which it manufactured a cancer treatment drug ("drug")---Subsequently company made some alterations to the chemical compound and launched an updated version of the drug, which the company claimed was a new "invention"---Company was refused patent for updated version of the drug on the basis that it was not a new drug but an amended version of its earlier product; that invention claimed by the company was anticipated by its previous patent of the chemical compound; that the invention claimed was obvious to a person skilled in the art in view of the disclosure provided in previous patent specifications; that if company was granted patent for updated version of its drug, it would adversely affect lives of poor cancer patients and their families due to the high price of the drug---Validity---Updated version of the drug emerged from the chemical compound for which the company already had a patent---Company had obtained approval for updated version of the drug (in a foreign country) on the basis that it was part of the patented chemical compound---Company had also used the chemical compound patent (in a foreign country) to stop another pharmaceutical company from selling its cancer drug, which contained the same active pharmaceutical ingredient as present in the updated version of the drug---Pharmacological properties of the updated version of the drug were also known in the patented chemical compound---Updated version of the drug did not qualify the tests of "invention" and patentability, in circumstances---Appeal filed by company was dismissed accordingly with cost.
(c) Patent---
----Pharmaceutical patent---Ever greening of pharmaceutical patent---Pharmaceutical drug derived from a patented chemical compound/substance---Grant of patent for such a drug---Scope---Legal requirement that patent for such a drug could only be granted if it was shown that it had enhanced "efficacy" compared to the chemical compound/substance it was derived from----Enhanced "therapeutic efficacy" of a pharmaceutical drug---Scope---Multi-national pharmaceutical company ("company") had a patent for a chemical compound with which it manufactured a cancer treatment drug ("drug")---Subsequently company made some alterations to the chemical compound and launched an updated version of the drug, which the company claimed was a new "invention"---Company was refused patent for the updated version of the drug---Plea of pharmaceutical company that patented chemical compound from which the updated version of the drug was derived did not have any known efficacy, therefore, there was no question of showing that the updated version had any enhanced efficacy, and that even otherwise the updated version of the drug had a 30% increased bioavailability and was more easily absorbed as compared to the patented chemical compound---Validity---Updated version of the drug was a new form of a known substance, i.e. patented chemical compound, efficacy of which was well known---Company was obliged to show the enhanced efficacy of the updated version of the drug over the patented chemical compound, however, there was no material (on record) to make any such comparison of efficacy---Test of efficacy depended upon the function, utility or the purpose of the product, therefore, in the case of a medicine that claimed to cure a disease, the test of efficacy could only be "therapeutic efficacy"---"Therapeutic efficacy" of a medicine had to be judged strictly and narrowly, thus, not all advantageous or beneficial properties (of an updated version of a drug) were relevant, but only such properties that directly related to its therapeutic efficacy---Additional properties that could be attributed to the updated version of the drug were limited to its improved process ability and better and longer storability but, on the basis of such properties alone, the updated version of the drug could not be said to possess "enhanced therapeutic efficacy" over the patented chemical compound---Increased bioavailability (of an updated version of a drug) alone might not necessarily lead to an enhancement of therapeutic efficacy---Increase in bioavailability leading to an enhancement of therapeutic efficacy had to be specifically claimed and established by research data, which was lacking in the present case---Appeal filed by company was dismissed accordingly with cost.
(d) Patent---
----Pharmaceutical patent---Pharmaceutical drug derived from a known chemical compound/substance with known efficacy---Grant of patent for such a drug---Conditions---Where the (pharmaceutical) product for which patent protection was claimed was a new form of a known substance with known efficacy, then the product must pass the test of "invention", "inventive steps" and the test of enhanced (therapeutic) efficacy.
Gopal Subramanium and T.R. Andhiyarujina, Senior Advocates for Novartis AG.
Paras Kuhad, Additional Solicitor General for Union of India.
Anand Grover, Senior Advocate for Cancer Patients Aids Association.
L. Nageswara Rao, Senior Advocate for NATCO.
Harish N. Salve, Rajeev Dhawan, Senior Advocates and Pratibha M. Singh, Advocate for CIPLA.
Pratibha M. Singh, Advocate for Ranbaxy.
Fox Mandal & Co. for Hetero Drugs Ltd.
Jayant K. Mehta, Advocate for Indian Pharmaceutical Alliance.
Professor Shamnad Basheer along with Gopal Sankarnarayanan, Advocate for Intervenor/Amicus.
JUDGMENT
AFTAB ALAM, J.---Delay condoned.
2. Leave granted in all the special leave petitions.
3. What is the true import of section 3(d) of the Patents Act, 1970? How does it interplay with clauses (j) and (ja) of section 2(1)? Does the product for which the appellant claims patent qualify as a "new product" which comes by through an invention that has a feature that involves technical advance over the existing knowledge and that makes the invention "not obvious" to a person skilled in the art? In case the appellant's product satisfies the tests and thus qualifies as "invention" within the meaning of clauses (j) and (ja) of section 2(1), can its patentability still be questioned and denied on the ground that section 3(d) puts it out of the category of "invention"? On the answer to these questions depends whether the appellant is entitled to get the patent for the beta crystalline form of a chemical compound called Imatinib Mesylate which is a therapeutic drug for chronic myeloid leukemia and certain kinds of tumours and is marketed under the names "Glivec" or "Gleevec".
4. These questions were debated at the bar intensely and at great length. The debate took place within a very broad framework. The Court was urged to strike a balance between the need to promote research and development in science and technology and to keep private monopoly (called an 'aberration' under our Constitutional scheme) at the minimum. Arguments were made about India's obligation to faithfully comply with its commitments under international treaties and counter arguments were made to protect India's status as "the pharmacy of the world". The Court was reminded of its duty to uphold the rights granted by the statute, and the Court was also reminded that an error of judgment by it will put life-saving drugs beyond the reach of the multitude of ailing humanity not only in this country but in many developing and under-developed countries, dependent on generic drugs from India. We will advert to these and a number of other arguments at their proper place but we must first take note of the facts that give rise to the above questions and provide the context for the debate.
5. Jurg Zimmermann invented a number of derivatives of N-phenyl-2-pyrimidine-amine, one of which is CGP 571481 in free base form (later given the International Nonproprietary Name 'Imatinib' by the World Health Organisation). These derivatives, including Imatinib2, are capable of inhibiting certain protein kinases, especially protein kinase C and PDGF (platelet-derived growth factor)-receptor tyrosine kinase and thus have valuable anti-tumour properties and can be used in the preparation of pharmaceutical compositions for the treatment of warm-blooded animals, for example, as anti-tumoral drugs and as drugs against atherosclerosis. The N-phenyl-2-pyrimidine-amine derivatives, including Imatinib, were submitted for patent in the US. The application was made on April 28, 1994 and patent was granted on May 28, 1996 under US Patent No. 5,521,184 (hereinafter referred to as 'the Zimmermann Patent'). The Zimmermann compounds (i.e., derivatives of N-phenyl-2-pyrimidine-amine) were also granted a European patent under Patent No. EP-A-0 564 409.
6. The appellant claims that beginning with Imatinib1 in free base form (as the 'e-duct'), in a two-stage invention they first produced its methanesulfonic acid addition salt, Imatinib Mesylate, and then proceeded to develop the beta crystalline form of the salt of Imatinib. According to the appellant, starting from Imatinib free base they could reach to the beta crystal form of Imatinib Mesylate in two ways: one "by digesting another crystal form, especially the alpha crystal form, or an amorphous starting material of the methanesulfonic acid addition salt of compound of formula I ... "; and second "by dissolving another crystal form, especially the alpha crystal form, or an amorphous starting material of the methanesulfonic acid addition salt of compound of formula I...". Describing the different processes, step by step, for producing Imatinib Mesylate starting from Imatinib, it is stated that in the first process they would first arrive at Imatinib Mesylate in amorphous form, as the intermediate stage, and thereafter, following further processes, reach the beta crystal form of Imatinib Mesylate. Following the second process, they would reach the beta crystal form of Imatinib Mesylate directly, skipping the intermediate stage in which Imatinib Mesylate first appears in amorphous form. In the third process, they would start with the alpha crystal form of Imatinib Mesylate and arrive at its beta crystal form.
7. It was stated in course of submissions, however, that for practical purposes, the best way to produce the beta form is by proceeding directly from the free base form to the beta form, as in examples 2 and 3 given below, by introducing a specified amount of the beta crystals at the step specified. The three processes are described by the appellant under the following three examples:--
EXAMPLE - 12
Step 1- 98.6 gms of Imatinib free base is added to 1.4 liters of ethanol.
Step 2- To the above, 19.2 gms of methanesulfonic acid is added drop wise for over 20 minutes.
Step 3- Solution obtained in Step 2 is heated under reflux (i.e. boiling). It is heated in a manner to preserve the solution from escaping as a gas, so the gas is captured, condensed and obtained as a liquid. This solution is heated for 20 minutes.
Step 4- Filtering the solution - the filtrate (which is obtained after filtering the resulting liquid) is evaporated down to 50%. In other words, half of the filtrate is allowed to vaporize.
Step 5- Residue is again filtered at 25 degrees Celsius.
Step 6- Mother liquor (the liquid filtrate of step 5) is evaporated to dryness.
Step 7- Residue obtained after Step 6, and residue obtained after Step 5 are suspended in 2.2 l ethanol.
Step 8- The suspension obtained after Step 7 is dissolved under reflux and it becomes clear upon heating. Thereafter, 30 ml water is added to it.
Step 9- Substance is cooled overnight to 25 degrees Celsius, filtered and dried at 65 degrees Celsius, until weight is constant. This results in alpha crystalline form.
Step 10- Alpha form is stirred in methanol for two days at about 25 degrees Celsius. Then the crystals are isolated by filtration and dried overnight at room temperature. This results in beta crystalline form.
EXAMPLE - 2
Step 1- 50 gms of Imatinib free base is added to 480 liters (sic milliliters!) of methanol.
Step 2- To the above, 9.71 gms of methanesulfonic acid and 20 ml methanol is added. This mixture (sic is heated) at 50 degrees Celsius.
Step 3- To the solution obtained from Step 2, 5 gms of activated carbon is added and the mixture is boiled for 30 minutes under reflux, filtered and evaporated.
Step 4- The residue obtained from Step 2 (sic 3) is dissolved in 150 ml methanol and inoculated (introduced) with a few mgms (sic mg) of beta form of imatinib mesylate leading to crystallization of the product.
Step 5- The product is dried at 50 megabars (unit to measure pressure) and at 60 degrees Celsius. This leads to crystallization of beta form of imatinib mesylate.
Step 6- The retention values (distance travelled by each chemical component in relation to the distance the solution front moves) obtained are as follows;
Methylene chloride: ethyl acetate: Methanol: concentrated aqueous ammonium hydroxide solution = 6:10:30:2 (sic 60:10:30:2)
Step 7- To the above, High Pressure Chromatography (technique for separation of mixtures) is applied for 10.2 minutes
EXAMPLE - 3
Step 1- 670 gms of alpha form of imatinib mesylate is heated in 1680 ml of methanol.
Step 2- The solution obtained from Step 1 is then inoculated at 60 degrees Celsius with 55 (sic mg of) beta form of imatinib mesylate. Upon this, the product starts to crystallize.
Step 3- Thereafter, the crystals are dried at 50 megabars and at 100 degrees Celsius. This leads to crystallization of beta form of imatinib mesylate.
Step 4- The retention values (distance traveled by each chemical component in relation to the distance the solution front moves) obtained are as follows;
Methylene chloride: ethyl acetate: Methanol: concentrated aqueous ammonium hydroxide solution = 6:10:30:2 (sic 60:10:30:2)
Step 5- To the above, High Pressure Chromatography is applied for 10.2 minutes.
[Examples are also given for preparation of 100 mg tablets and 100 mg capsules of Imatinib Mesylate but there is no need to go into that at this stage.]
8. The appellant filed the application (Application No.1602/MAS/1998)1 for grant of patent for Imatinib Mesylate in beta crystalline form at the Chennai Patent Office on July 17, 1998. In the application it claimed that the invented product, the beta crystal form of Imatinib Mesylate, has (i) more beneficial flow properties: (ii) better thermodynamic stability; and (iii) lower hygroscopicity than the alpha crystal form of Imatinib Mesylate. It further claimed that the aforesaid properties makes the invented product "new" (and superior!) as it "stores better and is easier to process"; has "better processability of the methanesulfonic acid addition salt of a compound of formula I", and has a "further advantage for processing and storing".
9. It is significant to note that the comparison of the aforesaid properties of the beta crystal form of Imatinib Mesylate was made with its alpha crystal form. In the patent application, there is no claim of superiority of the beta crystal form of Imatinib Mesylate in regard to the aforesaid three properties, or any other property, over the starting material Imatinib, or even over Imatinib Mesylate in amorphous form or any form other than the alpha crystal form. On the contrary, insofar as Imatinib in free base form is concerned, it was unambiguously stated in the patent application as under:--
"It goes without saying that all the indicated inhibitory and pharmacological effects are also found with the free base, 4-(4- methylpiperazin-1-ylmethyl)-N- [4-methyl-3- (4-pyridin-3-yl) pyrimidin-2- ylamino)phenyl] benzamide, or other cells thereof. The present invention relates especially to the (b-crystal form of the methanesulfonic acid addition salt of a compound of formula I in the treatment of one of the said diseases or in the preparation of a pharmacological agent for the treatment thereto." (emphasis added)
10. In fairness to the appellant, however, it should be stated that the application was made at the time when there was a different patent regime. After the application was made and before it was taken up for consideration, a number of amendments were introduced in the Indian Patents Act, 1970, which brought about fundamental changes in the patent law of the country. The appellant was, however, fully aware of these changes in the law and, in order to reinforce its claim for patent for the subject product and to bring its claim within the four corners of the changed law, it filed four (4) affidavits of certain experts, two of which stated that the beta crystal form of Imatinib Mesylate has much higher bioavailability as compared to Imatinib in free base form. In due course, we shall examine how far the properties attributed to the subject product in the patent application and the affidavits make it "new" and entitled to grant of patent, but for the moment we may note how the case has come to the present stage.
11. As noted above the patent application was made on July 17, 1998, giving July 18, 1997, the date on which the appellant had applied for grant of patent for the subject product in Switzerland, as the "priority date". On July 18, 1997, Switzerland was not one of the "Convention Countries" as defined under section 2 (1)(d) read with section 133 of the Act and it was notified as a convention country as per section 133 of the Act on November 30, 1998.
12. In 1997, when the appellant filed its application for patent, the law in India with regard to product patent was in a transitional stage and the appellant's application lay dormant under an arrangement called "the mailbox procedure". Before the application for patent was taken up for consideration, the appellant made an application (Application No.EMR/01/2002) on March 27, 2002, for grant of exclusive marketing rights (EMR) for the subject product under section 24A of the Act, which was at that time on the statute book and which now stands deleted. The Patent Office granted EMR to the appellant by order dated November 10, 2003.
13. The appellant's application for patent was taken out of the "mailbox" for consideration only after amendments were made in the Patents Act, with effect from January 1, 2005. But before it was taken up for consideration, the patent application had attracted five (5) pre-grant oppositions1 in terms of section 25(1) of the Act. And it was in response to the pre-grant oppositions that the appellant had filed the affidavits on the issue of bioavailability of Imatinib Mesylate in beta crystalline form.
14. The Assistant Controller of Patents and Designs heard all the parties on December 15, 2005, as provided under rule 55 of the Patent Rules, 2003, and rejected the appellant's application for grant of patent to the subject product by 5 (five) separate, though similar, orders passed on January 25, 2006 on the 5 (five) opposition petitions. The Assistant Controller held that the invention claimed by the appellant was anticipated by prior publication, i.e., the Zimmermann patent; that the invention claimed by the appellant was obvious to a person skilled in the art in view of the disclosure provided in the Zimmermann patent specifications; and further that the patentability of the alleged invention was disallowed by section 3(d) of the Act; and also that July 18, 1997, the Swiss priority date, was wrongly claimed as the priority date for the application in India and hence, the alleged invention was also anticipated by the specification made in the application submitted in Switzerland.
15. At that time, the appellate authority under the Act had yet to become functional. The appellant, therefore, challenged the orders passed by the Assistant Controller in writ petitions filed directly before the Madras High Court. Apart from challenging the orders of the Assistant Controller, the appellant also filed two writ petitions (one by the appellant and the other by its Indian power of attorney holder) seeking a declaration that section 3(d) of the Act is unconstitutional because it not only violates Article 14 of the Constitution of India but is also not in compliance with "TRIPS". After the formation of the Intellectual Property Appellate Board, the five writ petitions challenging the five orders of the Assistant Controller were transferred from the High Court to IPAB by order dated April 4, 2007, where these cases were registered as appeals and were numbered as TA/1 to 5/2007/PT/CH. The other two writ petitions assailing section 3(d) of the Act were finally heard by a Division Bench of the High Court and dismissed by the judgment and order dated August 6, 2007. The appellant did not take that matter any further.
16. The appellant's appeals against the orders passed by the Assistant Controller were finally heard and dismissed by the IPAB by a long and detailed judgment dated June 26, 2009.
17. The IPAB reversed the findings of the Assistant Controller on the issues of anticipation and obviousness. It held that the appellant's invention satisfied the tests of novelty and non-obviousness, and further that in view of the amended section 133, the appellant was fully entitled to get July 18, 1997, the date on which the patent application was made in Switzerland, as the priority date for his application in India. The IPAB, however, held that the patentability of the subject product was hit by section 3(d) of the Act. Referring to section 3(d) the IPAB observed:--
"Since India is having a requirement of higher standard of inventive step by introducing the amended section 3(d) of the Act, what is patentable in other countries will not be patentable in India. As we see, the object of amended section 3(d) of the Act is nothing but a requirement of higher standard of inventive step in the law particularly for the drug/pharmaceutical substances."
18. The IPAB also referred to the judgment of the Madras High Court, dismissing the appellant's writ petitions challenging the constitutional validity of section 3(d) where the High Court had observed:--
"We have borne in mind the object which the amending Act wanted to achieve namely, to prevent evergreening; to provide easy access to the citizens of the country to life saving drugs and to discharge their constitutional obligation of providing good health care to its citizens."
19. In light of the High Court's observation, the IPAB also referred to the pricing of the drug Gleevec by the appellant while it enjoyed EMR over it, and held that the patentability of the subject product would also be barred by section 3(b) of the Act and in this regard observed as follows:--
"We are fully conscious of the Appellant's benevolent GIPAP program for free distribution of GLEEVEC to certain cancer patients. But as per information furnished in its written counter-argument by R 3 that when the Appellant was holding the right as EMR on GLEEVEC it used to charge Rs.1,20,000 per month for a required dose of the drug from a cancer patient, not disputed by the Appellant, which in our view is too unaffordable to the poor cancer patients in India. Thus, we also observe that a grant of product patent on this application can create a havoc to the lives of poor people and their families affected with the cancer for which this drug is effective. This will have disastrous effect on the society as well. Considering all the circumstances of the appeals before us, we observe that the Appellant's…
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