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Ever greening Of Patents-Boon Or Bane With Special Reference To Novartis Case

Introduction: Evergreening of patents

Intellectual property is a type of intangible property, while a patent is a subset of intellectual property. Granting a patent gives the inventor the legal right to prevent others from producing, using, or selling your invention for a limited period of 20 years. In the Novartis case, Novartis challenged IPAB's rejection of its beta crystal patent application. It is useful to recognize a variety of pharmaceutical product patents that have caught the attention of those who use the word perennial to describe the monitoring of pharmaceutical companies' patents. Therefore, this document focuses on the permanent evergreening of patents: blessing or ruin, with reference to the case of Novartis.

The Novartis case is the only historical case that deals with the concept of the perennial in such detail. Therefore, Novartis' interpretation of section 3 (d) will have lasting effects on innovative pharmaceutical companies seeking the protection of their intellectual property rights in India. Despite the legal battle, the meaning of greater effectiveness has not been resolved for future cases, as the Supreme Court verdict left it open for interpretation.

Manufactured by the pharmaceutical company Novartis, Glivec (imatinib mesylate) is recommended for chronic myeloid leukemia, one of the most common blood cancers in Eastern countries. After more than a decade of legal battles over its patentability, the Supreme Court of India issued its final decision on April 1, 2013, rejecting the Swiss pharmaceutical giant's appeal.

In 2006, the Indian Patent Office first rejected Glivec's patent under section 3(d) of the Indian Patent Law, arguing that it was only a modified version of an existing drug, Imatinib, and therefore the drug was not innovative. Novartis responded by filing lawsuits against the Indian government, but the final verdict in April 2013 puts an end to the battle. In fact, the Supreme Court said that although the bioavailability of the drug had improved, it did not demonstrate greater efficacy and that Glivec was not patentable.

Evergreening is a major concern of generic drug manufacturers, as it seeks to gain protection for another 20 years based on small changes in the current composition of existing drugs. The process does not produce any increase in the therapeutic efficacy of the drug. In many countries, minor reformulations can qualify for patent protection. The result is that it prevents competition in the market and is considered harmful to the market and consumers.

The concept of Evergreening seeks to extend the term of protection without requiring an inventive step[1]. There are several methods of Evergreening a patent, one of these methods is the combination of two drugs in which small changes are made to the chemical composition of the existing drug. Other processes are the introduction of new uses of existing drugs, long-release formulations of existing drugs that have patents and chiral change, which means that the new drug has a different molecular orientation[2].

In this way, companies can extend the term of protection and charge more for drugs while defending costs incurred in research and development as no cost has been incurred for such compositions as it is only a minor combination or modification of existing drugs. Due to the lack of generic drugs, the verity translates into an increase in the cost of healthcare for consumers.

The persistence of patents primarily affects consumers in underdeveloped and developing countries who cannot afford the brand name drugs that can save them from deadly diseases.

Diseases such as HIV AIDS, tuberculosis, etc. they are a great threat to these countries. These nations lack the financial capacity to purchase branded drugs and have to rely on generic forms of drugs. Most African nations depend on Indian generic companies for essential life-saving drugs. Hence, the generic industry of India is a boon to most of the African nations.
On the other hand, it has been stated that evergreening helps in the promotion and protection of new research.

While there are only minor changes to the existing drug, there are some improvements to existing drugs. Companies support the evergreen strategy because certain costs and risks are linked to the new types of emerging drugs. Medicines also do not apply to the patent, although there are also improvements to existing medicines.

One of the largest Swiss multinational pharmaceutical companies, i.e. Novartis International AG in 1998 filed an application under the TRIPS agreement with the Indian Patent Office in Chennai to obtain a patent for an anticancer drug  Glivec  used in the treatment of leukemia chronic myeloid (CML) and gastrointestinal stromal cancer (GIST) discovered in the beta-phase crystalline form imatinib mesylate. This drug is known for its use in cancer treatment and is patented in more than 35 countries.

When Novartis applied for a patent, the grant was limited to methods or processes and not products in India, as specified in section 5 of the Patents Act of 1970. Section 5 of 2005 was repealed after the Patents Act (Amendment) and patents have been issued for methods or processes, but also for products[3].Section 3 of the Indian Patents Act 1970 is the key provision for deciding patentable grounds in India and provides non-patentable arguments when it comes to registration.

Section 3 (d) of the law seeks to prevent a term generally referred to as patent perpetuity by ensuring that only generic formulations that have substantially improved efficacy are patented. The purpose of granting a patent for incremental innovations is to encourage the sequential development of existing products, which brings better products to market[4]. Provided for in article 226 of the Indian Constitution, Novartis filed two motions in writing in the 2006 Madras High Court.

The appeals subsequently argued that section 3(d) of the 1970 Patents Act was illegal as it did not comply with the TRIPS Agreement and also violated Article 14 of the Indian Constitution and the other against the order of the Madras Patent Office. In 2007 the Madras High Court referred the case to the IPAB (Intellectual Property Court of Appeal). The IPAB finally listened to this appeal and dismissed it on the grounds that the invention met ingenuity and not obviousness requirements, but the product's patentability was impaired by section 3(d) of the 1970 Patents Act.

The IPAB decision aims to prevent the permanence of the already approved product by introducing minor modifications and to provide Indians with quick access to life-saving drugs[5]. Subsequently, Novartis filed the Special Leave Petition (SLP) with the Supreme Court of India in 2009 against an order passed by the IPAB under Section 136 of the Indian Constitution.

Novartis' Glivec Case

The Novartis Glivec case has drawn industry onlookers worldwide to the media. Novartis appealed to the Supreme Court to secure a patent for its cancer medicine, Glivec, based on incremental development leading to greater efficacy. The controversial issue here is that incremental improvement can be viewed as an increase in effectiveness.

Also, in 2009, a previous decision was taken on the Glivec case, which was subsequently challenged, because the operation was far too pricey also for general population. But pharmaceutical firms' analysts cautioned that a policy of this sort might damage India's position in world commerce. Dr Ajay Kumar Sharma, Pharmaceutical and Biotechnology Associate Director, Health Research, Frost & Sullivan, South Asia and the Middle East, says, These decisions send the wrong signals and will destroy the industry in the long run. They are short-sighted by nature since they do not plan[6].

Novartis filed a Special Leave petition (SLP) on 10 August 2009 challenging the Indian Intellectual Property Appeals Board (IPAB) Supreme Court of India's decision to uphold the Indian Patent Office 's 2006 beta-crystal denial patent for Glivec. Glivec has been granted patents in nearly 40 other countries, including China, Russia and Taiwan, but for India the IPAB refuses it. IPAB agrees that Glivec fulfils international innovation and inventiveness criteria but does not agree that Glivec satisfies the requirements of section 3(d) of the Indian Patent Act 2005. This law imposed a new obstacle to make patenting of new types more effective. We assume that Section 3(d), the Indian legal clause, intended as a perennial barrier, does not apply to the groundbreaking drug Glivec, which has changed the lives of rare cancer patients.

Novartis V. Union Of India

The Novartis case is one of the emblematic cases in which the concept of perennial has been discussed in detail. The Novartis claim posed a great threat to the poor around the world because most of the generics come from the Indian generic drug industry. India has been called the pharmacy of the developing world. Therefore, a change in Indian politics would surely affect the rest of the world. A survey indicates that 80% of antiretroviral drugs come from India, which is used to treat patients from more than 30 countries. In addition, the Indian population is mostly poor and cannot afford branded drugs. Therefore, the generics industry in India must be protected[7].

Novartis AG is a Swiss-based pharmaceutical company[8]. In 1994 the company filed a patent on the free Imatinib basis. Subsequently, in 1998, Novartis also filed a patent application with the Chennai Patent Office claiming a patent on its cancer drug Imatinib Mesylate (in beta crystalline form) also known as Gleevec. Gleevec is an enhancement of the free base drug of Imatinib. Novartis did not obtain the patent for this drug, but the application was submitted to the provisions of the mailbox.

As a result, the application was suspended until 2005. Meanwhile, in 2002 Novartis applied for an EMR grant. EMRs are used to provide exclusive marketing rights for a specified period or until a decision is made on the patent application. In November 2003, Novartis received EMRs. Following the granting of the EMRs, the company filed infringement lawsuits against generic companies that produced generic versions of Gleevec. Courts have issued injunctions against generic companies such as Cipla, Ranbaxy and others.

This has caused a huge price increase for Gleevec in India. In 2005, the Indian Patent Law replaced section 3 (d) to address the perennial issue. When the patent office opened Novartis' application in 2005, many companies challenged it at the pre-licensing stage. After reviewing the opposition received, the Indian Patent Office denied Novartis a patent on the Section 3 (d) touchstone.

Novartis has been informed that the active substance of the new drug Gleevec is already known and is therefore covered by section 3 (d). In response to the objection in section 3 (d), the company provided an affidavit in support of its claim. The affidavit indicated that the beta crystalline form of imatinib mesylate had a higher bioavailability, which means that the rate at which the drug is absorbed is greater. Therefore, Novartis' patent application was rejected for failing to meet the improved efficacy test[9].

The active ingredient, imatnib mesylate in beta crystalline form, was believed to be a known substance as described in the above patent. Although the affidavit submitted in support of the claim indicates that it has higher bioavailability, the Comptroller was dissatisfied with the content of the affidavit. Following the denial, two written petitions were filed with the Madras High Court challenging the earlier decision along with the constitutionality of section 3 (d)[10].

The constitutionality argument in section 3 (d) was based on two grounds:

  • Section 3 (d) is arbitrary, vague and illogical and therefore violates Article 14 of the Indian Constitution.
  • Section 3 (d) violates the obligations of the TRIPS Agreement in India

Secondly, the Madras High Court has declared that it has no jurisdiction to decide on these matters. However, the Court has jurisdiction to rule on the constitutionality of Article 3 (d). Novartis argued that section 3 (d) provides unguided discretion to the patent owner to decide the greatest efficacy of any drug. Novartis has argued that this arbitrary and unguided discretion constitutes a violation of the equal protection provisions contained in Article 14 of the Indian Constitution. The government attorney said industry experts have clearly established what enough efficiency improvement is and that there is good understanding among the members of the patent office.

Furthermore, if the application has been unduly rejected, the irregularity can be corrected by going to the appeal bodies. The Madras High Court has ruled that Section 3 (d) of the Indian Patent Act 1970 does not violate Article 14 of the Indian Constitution as it is not vague, arbitrary, or ambiguous. The Court stated that the purpose of not giving a fixed definition to the term greater effectiveness is that Parliament wanted the criteria to be applied based on the facts and circumstances of the case. Furthermore, legislators are not experts in the field of intellectual property, so it is necessary to grant that power to the patent office.

The Court also noted that: It is not a violation of Article 14 of the Indian Constitution, as we have taken into account the objective that the Amending Act was intended to achieve, namely to avoid permanence; Provide easy access to the citizens of this country to medicines that save lives and fulfill their constitutional obligation to provide good medical care to their citizens..

However, before the Madras High Court could rule on the Novartis case, a new forum called the IPAB was formed to deal with the appeals arising from the Comptroller rulings. And the matter was referred to the IPAB. The IPAB found that the application met the novelty criteria and no evidence but did not meet the requirements for enhanced effectiveness set out in section 3 (d) of the amended law[11].

Thus, Novartis submitted a special license application to the Supreme Court of India in 2009 under section 136 of the Indian Constitution. Novartis argued that section 3(d) should be interpreted fairly for Novartis to be granted a patent. It was further claimed that Section 3(d) of the Indian Patent Act is inconsistent with the requirements of India's TRIPS Agreement. In addition to these matters, the court had to determine the true meaning of section 3(d) and whether Novartis' application merits patent protection[12].

Whether Section 3(d) is in compliance with TRIPS Agreement Obligations

The Novartis Supreme Court has recognized that India, as a member of the WTO, is bound by its obligations under the TRIPS Agreement. Several articles of the TRIPS Agreement have been reviewed for compliance. The Doha Declaration on Public Health was also considered when discussing this issue. The Supreme Court found that the changes undertaken in 1999, 2002 and 2005 introduced notable changes to the patent law regime and aligned Indian patent law with the TRIPS agreement. The Court relied on the statement of the objects and purposes of these amendments and concluded that these amendments were introduced to align Indian law with that of TRIPS.

The Court also noted that section 3 (d) was introduced with the objective of preventing evergreen. Parliamentary debates were also analyzed to see the subject of article 3 (d) of the law. One of the legislators used the example of Gleevec and said that these brand name drugs are much more expensive than their generic counterparts. He also pointed out that the Novartis Gleevec app is simply timeless and cannot be called an invention[13]. Lawmakers were also concerned about the problems of generic drug unavailability in other jurisdictions. Therefore, it is clear from parliamentary debates that section 3 (d) was introduced to address the evergreen issue.

It should also be noted that the criteria for patentability have not been defined in the TRIPS agreement. Under the flexibility of TRIPS, India is free to decide its own patentability criteria based on its specific national interests. Therefore, Section 3 (d) can be said to comply with TRIPS. Additionally, the Supreme Court has ruled that you can appeal to the WTO Dispute Panel in case of disagreement.

Interpretation Of Section 3(D)

The court carefully interpreted the terms known substance and enhancement of known efficacy. The court held that documented means a proven and established fact. The court used the Oxford dictionary to clarify the meaning of the term effectiveness. This means the ability to achieve the desired effect as defined by the dictionary. In the case of drugs, it can only have therapeutic efficacy. Although the exact meaning of the term therapeutic efficacy is unknown and the court has left it to future courts to decide the actual meaning, considering the facts and circumstances of each case[14].

Greater effectiveness would mean that the properties of new drugs would have to be different from existing ones. A slight change in the inherent properties of existing drugs will not qualify for a patent. An appropriate way to demonstrate greater efficacy may be through empirical research. Novartis AG presented three arguments in support of improving effectiveness; First, he argued that the new drug has more beneficial flow properties; secondly, it has been claimed that it has better thermodynamic stability, and thirdly it has been claimed that it has 30% more bioavailability.

In applying this interpretation to Novartis' application, the court found that it does not meet the requirements of section 3 (d) as it lacks therapeutic efficacy. Therefore, Novartis cannot obtain a patent for its drug Gleevec. It should be noted that the Supreme Court does not hold that greater bioavailability cannot equate to greater efficacy, but instead held that Novartis could not establish the same by providing relevant data and empirical research. This case is a simple assertion by the Supreme Court of India that patent rights cannot prevail over the rights of humans to obtain generic drugs[15].

Supreme Court Decision
First, the court examined the prior art issue by examining the Zimmerman patent and related academic publications. It is clear from the Zimmerman patent that imatinib mesylate itself is not new and does not count as proof of the invention as set forth in paragraphs 2 (1) (j) and 2 (1) (ja) of the Patent Act since 1970. The court has then investigated the beta-crystalline form of imatinib mesylate and wrote that:
for argumentative purposes, it can be recognized as new, which means it is not known from the Zimmermann patent. Now the beta-crystalline form of imatinib mesylate, a medicinal substance and a polymorph of imatinib mesylate, is explicitly contained in section 3 (d) of the act with its clarification[16].

Applying 3 (d) of the Statute, the Court agreed to define efficacy as therapeutic efficacy, as the subject-matter of both the patent is therapeutic value combination. The court also acknowledged that physical potency of imatinib beta-crystalline mesylate becomes enhanced when contrast with other formulations, and so in the free initial position, the beta-crystalline form with imatinib mesylate is 30% more bioavailable than imatinib[17].

The Supreme Court of India has thus in effect affirmed the view that there is new proof of greater efficacy under the Indian Patent Act for the granting of pharmaceutical patents in addition to checking the standard measures of novelty, inventiveness and applicability[18]. The Court was ensured to point out that during a transitional period in Indian patent law, the patent application in question was filed, particularly with respect to Section 5, which prohibited product patents and incorporation of the Section 3 (d), for which jurisprudence does not yet exist.

 The Court was also concerned that the decision was restrictive: We found that the product in question, the beta-crystalline form of imatinib mesylate, does not meet the test set out in section 3 (d) of the statute, but that does not mean that Section 3 (d) excludes patent protection for all incremental chemical and pharmaceutical developments.

Reactions to the Novartis Judgement

It is one of the most rigorously analyzed tests in the world. Some saw this process as a win for the healthcare sector, while others see it as a defeat for intellectual property rights holders. Pharmaceutical companies, developed nations and other legal critics have condemned the lawsuit as it discourages innovation and research. Novartis AG has also issued a press release and said this will discourage the discovery of innovative drugs that are essential for the advancement of medical science for patients. Other large pharmaceutical companies such as Pfizer have also reacted negatively to the ruling stating that it will affect the environment for innovation and investment in India.

Some described it as creating new and stricter patentability standards for granting patents in India. This could force large pharmaceutical companies to outsource to other markets such as China. Novartis has also established its new biomedical research institute in China. Chip Davis, representative of PRMA (Pharmaceutical Research and Manufactures of America) commented that:
India's innovation environment is deteriorating, and the Indian government does not recognize the value of innovation and strong intellectual property. India has failed to promote a broader range of medicines and therefore ran the risk of curbing the kind of inventions that lead to the creation of new medicines[19].

On the other side of the debate are the people who support affordable drugs and the NGOs who push for better healthcare facilities. They claimed that this sentence is a great relief for millions of people who can survive with the help of generic drugs. Most underdeveloped and developing countries have praised the decision, saying it is a win-win for poor patients seeking drugs. The author is of the opinion that due deference should be accorded to the ruling of the Supreme Court of India, as it is an independent body with the power to decide taking into account the socio-economic conditions of the country[20].

The Supreme Court did not impose any additional burden on patent applicants, but simply explained section 3 (d) of the law[21]. Additionally, Novartis was granted a fair hearing to substantiate its request. Section 3 (d) should not be understood to exclude all incremental innovations, but rather affects the perennial growth of patents[22].

The ruling received wide support from international organisations and advocacy organisations, such as Doctors without Borders, WHO, etc., who welcomed the decision against pharmaceutical patents emerging. Some experts have indicated that this stringent patent clause could theoretically encourage creativity, as pharmaceutical companies would need to invest more on research and development to find new medicines instead of repackaging existing compounds.[23]

Conclusion
The Supreme Court's decision is to avoid the endless evergreening of generic drugs and to offer relief to those who cannot afford life-saving drugs because these life-saving drugs are sold at a very high price and are often expensive. The Supreme Court ruled that India is a developing country and that the availability of cheaper medicinal products is essential to the lives of one billion people.

Section 3(d) of the Patents Act of 1970 forbids the acquisition of secondary patents from some major pharmaceutical firms from making minor changes to existing technologies. Novartis could not show that the therapeutic efficacy of imatinib mesylate's beta crystalline form is more comparable to that of imatinib mesylate's therapeutic effect. Novartis' appeal for patent was then denied by the Supreme Court.

Novartis' interpretation of section 3 (d) will have lasting effects on innovative pharmaceutical companies seeking the protection of their intellectual property rights in India. After the Novartis case, the Patent Office also denied other patent applications on the grounds of section 3 (d). An example is that of Boehringer, a German company, which filed an application for the protection of its HIV drug nevirapine. In response to the above request, Patient Advocacy Groups filed pre-grant objections based on Novartis' interpretation of efficacy. On the other hand, Boehringer claimed that the new form of the drug has an additional stable particle size allocation that leads to greater stability. But the application was rejected due to lack of evidence showing greater therapeutic efficacy than known forms.

Uncertainty about what constitutes a substantial improvement in effectiveness has discouraged innovators seeking their IP protection in India. These companies have always relied on the method to go to market first and then maintain patent protection with improved versions of the drugs. The strict test of better efficacy will discourage them from going to the Indian market. These companies invest so much capital to invent new drugs and then try to recoup the money they have invested in research and development of new drugs.

Academics argue that India's generic business protection policy could harm India in the long run. This will directly affect the entry of new drugs into the market and consequently Indian consumers will be affected. These companies will have to shift their investments to other countries where policies are more flexible. Therefore, it is necessary to clarify what is meant by efficiency improvement.

However, the need to formulate an alternative method other than compulsory licensing to minimize prices in developing countries like India is still largely neglected at this time. It goes without saying that the verdict in the Glivec case will be significant, with the potential to influence how India is viewed by major pharmaceutical companies. India, as a growing sector, is and will continue to be an important part of Big Pharma's plans, regardless of such decisions. And the degree of their involvement will be determined by the nature of the following sentences. Pharmaceutical companies around the world seek clarity on India's patent laws.

End-Notes:
  1. Patentable subject matter, available at: https://indiankanoon.org/doc/165776436/ (Last visited on November 9th, 2020).
  2. Analysis of Novartis A.G. vs. Union of India, available at: https://blog.ipleaders.in/analysis-novartis-g-vs-union-india/ (Last visited on November 9th, 2020).
  3. Patent case brief analysis, available at: http://notesforfree.com/2018/01/18/patent-case-brief-novartis-v-union-india/ (Last visited on November 9th, 2020).
  4. Novartis Glivec case, available at: https://www.biospectrumasia.com/analysis/25/6880/what-is-up-with-the-indian-patent-scenario-.html (Last visited on November 9th, 2020).
  5. Follow-on innovation or evergreening: what is the difference? available at: https://www.lexology.com/library/detail.aspx?g=3a7ce23b-7c17-464f-8f47-12c412ee89c2 (Last visited on November 9th, 2020).
  6. Bainbridge, David I, Intellectual Property, Pitman Publishing
  7. Cornish, W R, Intellectual Property, Patents, Copyright, Trademarks and Allied Rights, Universal Law Publishing Co Pvt, Ltd. (for developing countries
  8. Elizabeth Verky, Patent Law, Eastern Book House
  9. Groves, Peter J, Source Book on Intellectual Property Law, Cavendish Publishing Ltd.
  10. Lionel Bently and Brad Sherman, Intellectual Property Law, Oxford University Press, Oxford, 2003
  11. LTC Harms, The Enforcement of Intellectual Property Rights: A Casebook, WIPO, Geneva, 2005
  12. Narayan, Intellectual Property Law, Eastern Law House
  13. Vandana Shiva, Patents: Myths & Reality, Penguin Books, New Delhi, 2001
  14. Watal, Jayashree, Intellectual Property Rights in WTO & Developing Countries, Oxford University Press, New Delhi, 2001
  15. World Health Organization. WHO's new Model Formulary - promoting consumer rights and patient safety. Available at: http://apps.who.int/medicinedocs/en/d/Js4940e/17 (Last visited on November 9th, 2020).
  16. Silverman, E. Novartis, A Gleevec Patent & India: Herrling Explains. 20 Aug 2012. Available at: http://www.pharmalot.com/2012/08/novartis-a-gleevec-patent-india-herrling-explains/ (Last visited on November 9th, 2020).
  17. Pharmaceutical Technology. Indian Supreme Court begins final hearing on Glivec patent case. 11 Sept 2012. Available at: http://www.pharmaceutical-technology.com/news/newsindian-supreme-court-beginsfinal-hearing-on-glivec-patent-case (Last visited on November 9th, 2020).
  18. Reuters. Novartis argues for Glivec patent at India's top court. 11 Sept 2012. Available at: http://www.reuters.com/article/2012/09/11/india-novartis-glivec-idUSL3E8KA22V20120911 (Last visited on November 9th, 2020).
  19. World Health Organization. The World Medicines Situation 2011 - Access to Essential Medicines as Part of the Right to Health. Available at: http://apps.who.int/medicinedocs/en/m/abstract/Js18772en/. (Last visited on November 9th, 2020).
  20. Silverman, E. Novartis Patent Dispute in India Heats Up. 6 Sept 2011. Available at: http://www.pharmalot.com/2011/09/novartis-patent-dispute-in-india-heats-up (Last visited on November 9th, 2020).
  21. Billingsley M: Novartis challenges India's drug patent laws in supreme court. BMJ 2012, 344(1279):1
  22. Lybecker, Kristina. The Economics of Access to Medicines: Meeting the Challenges of Pharmaceutical Patents, Innovation, and Access for Global Health. Harvard International Law Journal. Presented December 2011. Available at: http://www.harvardilj.org/wp-content/uploads/2011/12/HILJ-Online_53_ Lybecker.pdf. Accessed December 2012 (Last visited on November 9th, 2020).
  23. Inside story - India: human lives vs. Pharma profits. http://www.youtube. com/watch?v=F1U-1bjcYE8 (Last visited on November 9th, 2020).

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