Introduction

The decision of the Madras High Court in Novartis AG & Anr. v. Venkata Narayana Active Ingredients Pvt. Ltd, Neutral Citation 2026:MHC:1874, is an important judgement concerning pharmaceutical patent protection, the scope of the regulatory-use exemption under Section 107A of the Patents Act, 1970, and the effect of a prior consent decree on subsequent patent validity challenges.

The dispute revolved around the antidiabetic drug Vildagliptin, covered by Indian Patent No. 212815 owned by Novartis AG. The court examined whether exports of Vildagliptin Active Pharmaceutical Ingredient (API) by the defendant to entities in Egypt during the subsistence of the patent were protected under Section 107A of the Patents Act or constituted patent infringement.

The judgement also considered issues relating to patent term calculation, validity challenges under Section 3(d), disclosure obligations under Section 8 of the Patents Act, and the legal effect of an earlier undertaking furnished by the defendant.

The ruling provides important guidance on the extent of the Bolar exemption in India and clarifies the obligations of parties involved in pharmaceutical patent disputes.

Factual and Procedural Background

Novartis AG was the proprietor of Indian Patent No. 212815 relating to vildagliptin, a pharmaceutical compound used in the treatment of type 2 diabetes mellitus. The patent originated from an international patent application filed under the Patent Cooperation Treaty (PCT) and was granted in India.

Prior to the present proceedings, the parties had been involved in earlier litigation before the Madras High Court. In that suit, the defendant had furnished an undertaking acknowledging the plaintiffs’ patent rights and agreeing not to manufacture, sell, distribute, export, import, or otherwise deal with Vildagliptin in a manner infringing the patent.

On the basis of that undertaking, the earlier suit was decreed on 31 July 2015.

The present dispute arose when Novartis alleged that the defendant subsequently exported substantial quantities of Vildagliptin API to purchasers in Egypt during 2016 and 2017 despite the earlier undertaking.

According to the plaintiffs, such exports infringed their patent rights because the patent remained in force during the relevant period.

The defendant admitted that exports had taken place but contended that the supplies were exclusively intended for research, development, testing, and regulatory approval purposes and were therefore protected by Section 107A of the Patents Act.

A full trial was conducted, and several issues were framed regarding patent validity, patent term, infringement, applicability of Section 107A, and the consequences of the earlier consent decree.

Key Issues Before the Court

Issue	Subject Matter
Patent Validity	Challenges under Sections 3(d) and 8 of the Patents Act
Patent Term	Whether Patent No. 212815 remained valid during the export period
Patent Infringement	Whether exports of Vildagliptin API infringed Novartis’ patent rights
Section 107A Defence	Whether the exports qualified for the Bolar exemption
Prior Undertaking	Effect of the earlier consent decree and undertaking given by the defendant

Important Legal Questions Considered

• Whether exports of Vildagliptin API to Egypt were protected under Section 107A of the Patents Act.
• Whether such exports constituted patent infringement during the subsistence of Patent No. 212815.
• Whether the patent suffered from defects under Section 3(d) of the Patents Act.
• Whether there was non-compliance with disclosure requirements under Section 8.
• Whether the defendant could challenge the patent after furnishing an earlier undertaking acknowledging the patent rights of Novartis.
• Whether the prior consent decree had a binding effect on the parties.

Dispute Before The Court

The principal dispute before the Court was whether the defendant’s manufacture and export of Vildagliptin API fell within the protection of Section 107A of the Patents Act.

The plaintiffs argued that the exports were commercial in nature and therefore constituted infringement of Patent No. 212815.

The defendant contended that the exports were undertaken solely to facilitate research activities and regulatory approval procedures in Egypt and consequently qualified for the statutory exemption provided under Section 107A.

The defendant also sought to challenge the validity of the patent on several grounds. It argued that the patent term had expired earlier than claimed by the plaintiffs, that the invention was not patentable under Section 3(d), and that the patent was vulnerable because of alleged non-disclosure of foreign patent applications under Section 8 of the Patents Act.

Reasoning And Analysis Of The Court

Patent Term And Duration Of Protection

One of the first questions considered by the Court concerned the duration of the patent.

The defendant argued that the patent term should be calculated from the priority date, which would have resulted in expiry in December 2018.

The Court rejected this submission.

Referring to Sections 53(1) and 7(1B) of the Patents Act, it held that where an Indian patent application originates from a PCT application designating India, the patent term is calculated from the international filing date and not the priority date.

Consequently, the patent remained valid until 9 December 2019.

Issue	Defendant’s Argument	Court’s Finding
Patent Term Calculation	The term should be calculated from the priority date.	The term must be calculated from the international filing date under Sections 53(1) and 7(1B).
Patent Expiry	Patent expired in December 2018.	The patent remained valid until 9 December 2019.

Issue Estoppel And Consent Decree

The Court then examined whether the defendant could challenge the validity of the patent after having previously acknowledged its validity through an undertaking recorded in the earlier suit.

The Court analysed the legal principles governing consent decrees and referred to the Supreme Court decisions in Raja Sri Sailendra Narayan Bhanja Deo v. State of Orissa, AIR 1956 SC 346, and Byram Pestonji Gariwala v. Union Bank of India, (1992) 1 SCC 31.

After reviewing these authorities, the Court held that the earlier undertaking and consent decree created an issue estoppel against the defendant.

Since the defendant had expressly acknowledged the patent and undertaken not to infringe it, it could not subsequently challenge the patent’s validity in later proceedings between the same parties.

• Earlier undertaking acknowledged patent validity.
• Consent decree operated as issue estoppel.
• Subsequent challenge to validity was barred.

Section 3(d): Challenge To Vildagliptin Patent

The court also considered the defendant’s argument that vildagliptin was merely a metabolite and therefore fell within the exclusion contained in Section 3(d) of the Patents Act.

The Court found that there was no evidence supporting this contention.

On the contrary, the evidence indicated that Vildagliptin was a new chemical entity and had been recognised internationally as such.

The Court therefore rejected the Section 3(d) challenge.

Section 8: Disclosure Of Foreign Patent Applications

Another important issue related to Section 8 of the Patents Act, which requires applicants to disclose details of corresponding foreign patent applications.

The defendant alleged that Novartis had failed to comply with this obligation.

The Court undertook a detailed examination of Section 8, Rule 12 of the Patent Rules, and Form 3.

It concluded that Section 8 requires disclosure of corresponding foreign applications concerning the same or substantially the same invention.

It does not impose a general obligation to disclose every piece of prior art.

The Court found that the defendant had failed to establish that the documents relied upon by it constituted foreign applications for the same or substantially the same invention.

As a result, the Section 8 defence was rejected.

Section 8 Issue	Court’s Interpretation
Scope of Disclosure	Limited to corresponding foreign applications involving the same or substantially the same invention.
Prior Art Disclosure	No obligation to disclose every item of prior art.
Defence Outcome	Rejected due to lack of supporting evidence.

Interpretation Of Section 107A (Bolar Provision)

A substantial portion of the judgement is devoted to the interpretation of Section 107A, commonly known as the Bolar provision.

To understand the legislative intent, the Court examined international developments and foreign precedents.

It discussed Roche Products Inc. v. Bolar Pharmaceutical Co. Inc., 733 F.2d 858 (Fed. Cir. 1984), which led to legislative reform in the United States.

It also referred to Merck KGaA v. Integra Lifesciences Ltd, 545 U.S. 193 (2005), where the United States Supreme Court held that pre-clinical studies reasonably related to regulatory approval could fall within the statutory exemption.

The Court further analysed Article 30 of the TRIPS Agreement and Canada’s regulatory review exception, noting that international patent law recognises limited exceptions enabling research and regulatory activities before patent expiry.

International Authorities Considered

Authority	Principle Considered By The Court
Roche Products Inc. v. Bolar Pharmaceutical Co. Inc.	Background leading to legislative reform regarding regulatory-use exceptions.
Merck KGaA v. Integra Lifesciences Ltd.	Pre-clinical studies related to regulatory approval may qualify for statutory exemption.
TRIPS Agreement, Article 30	Recognition of limited patent exceptions.
Canada’s Regulatory Review Exception	Permits regulatory preparation before patent expiry.

Reliance On Bayer Corporation v. Union Of India & Ors.

The Court then considered the Delhi High Court judgement in Bayer Corporation v. Union of India & Ors., 2019 SCC OnLine Del 11868, which had interpreted Section 107A broadly and recognised that export transactions may fall within the provision if they are genuinely connected with regulatory approval requirements.

Scope And Limitations Of Section 107A

Drawing from these authorities, the Court held that Section 107A is an independent statutory provision intended to facilitate scientific research and regulatory preparation.

However, the exemption is not automatic.

The party invoking it must establish that the acts complained of were undertaken solely for purposes reasonably related to the development and submission of information required under a law regulating the manufacture, sale, use, or import of a product.

Requirements For Availing Section 107A Protection

• The activity must be reasonably related to regulatory approval.
• The purpose must be research, testing, or information generation required by law.
• The exemption must be supported by evidence.
• The protection is not available merely because a party labels an activity as research and development.

Court On Research And Development Claims

The Court emphasised that merely describing supplies as being for research and development purposes does not automatically bring them within the protection of Section 107A.

The surrounding facts, quantities involved, nature of transactions, identity of recipients, and overall circumstances must be examined to determine whether the statutory conditions have actually been satisfied.

Factors To Be Examined
Quantities involved in the transaction
Nature of the supplies
Identity of the recipients
Purpose of the transaction
Overall surrounding circumstances

Final Decision of the Court

The Court held that Patent No. 212815 remained valid and enforceable until 9 December 2019. It further held that the defendant was barred by issue estoppel from challenging the patent’s validity because of the earlier consent decree and undertaking.

The Court rejected the defendant’s challenges based on Section 3(d) and Section 8 of the Patents Act. It also reaffirmed that Section 107A is a special statutory provision intended to facilitate regulatory approval activities but can only be invoked where the statutory requirements are strictly satisfied.

The judgement therefore reinforces the principle that pharmaceutical patent rights continue to enjoy protection against commercial exploitation during the patent term while preserving a limited exemption for genuine research and regulatory activities.

Key Findings of the Court

• Patent No. 212815 remained valid and enforceable until 9 December 2019.
• The defendant was barred by issue estoppel from challenging patent validity.
• Challenges under Section 3(d) and Section 8 of the Patents Act were rejected.
• Section 107A was recognised as a special statutory provision for regulatory approval activities.
• The exemption under Section 107A applies only when statutory requirements are strictly satisfied.
• Pharmaceutical patent rights remain protected against commercial exploitation during the patent term.
• A limited exemption continues for genuine research and regulatory activities.

Point of Law Settled

The judgement settles several important legal principles.

It confirms that the term of a PCT-based Indian patent is calculated from the international filing date under Sections 53(1) and 7(1B) of the Patents Act.

It establishes that a party which has acknowledged patent validity through a consent decree may be prevented by issue estoppel from later challenging that validity.

It clarifies that Section 8 requires disclosure of corresponding foreign patent applications rather than general prior art references.

Most importantly, it confirms that Section 107A protects only those activities that are solely and reasonably related to obtaining regulatory approval and does not provide blanket immunity for all exports of patented pharmaceutical products.

Legal Principles Confirmed by the Judgment

Legal Issue	Principle Confirmed by the Court
PCT-Based Patent Term	The term of an Indian patent filed through the PCT route is calculated from the international filing date under Sections 53(1) and 7(1B) of the Patents Act.
Issue Estoppel	A party that has acknowledged patent validity through a consent decree may be barred from subsequently challenging that validity.
Section 8 Compliance	Disclosure obligations relate to corresponding foreign patent applications and not to general prior art references.
Section 107A (Bolar Exemption)	Protection is limited to activities solely and reasonably connected with obtaining regulatory approval.
Export of Patented Products	Section 107A does not provide blanket immunity for all exports of patented pharmaceutical products.

Case Details

Case Title	Novartis AG & AG Vs Venkata Narayana Active Ingredients Pvt. Ltd.
Date of Judgment	3 June 2026
Case Number	C.S. No. 282 of 2018
Neutral Citation	2026: MHC: 1874
Court	High Court of Judicature at Madras
Judge	Hon’ble Mr Justice Senthilkumar Ramamoorthy

Quick Case Summary

• Patent Number: 212815
• Core Issue: Patent validity, issue estoppel, Section 3(d), Section 8, and Section 107A of the Patents Act.
• Outcome: Patent upheld and challenges rejected.
• Significance: Clarifies the scope of the Bolar exemption under Section 107A and strengthens protection of pharmaceutical patent rights.