Upholding legitimate flexibility

Feroz Ali K
The judgment of the Madras High Court rejecting the writ petitions filed by Novartis challenging Section 3(d) of the Patents Act 1970 is a landmark decision that paves the way towards a better understanding of India’s international obligations.

Novartis challenged that the provision of the Indian Patents Act was not in compliance with India’s obligations under the TRIPS Agreement.

The judgment of the Madras High Court dealt with three issues, which can be summarised as follows:
(1) Whether Section 3(d) of the Patents Act was in compliance with the obligations under the TRIPS Agreement;

(2) Whether the Indian courts can grant a declaratory relief with regard to the non-compliance of an Indian law with an international treaty (in this case the TRIPS Agreement); and,

(3) Whether Section 3(d) was violative of Article 14 of the Indian Constitution as it confers unchannelled and unbridled powers which can lead to its arbitrary use.

On the first issue, it was held that the Indian courts are not the proper fora for determining compliance issues as the World Trade Organisation (WTO) and the TRIPS Agreements provide for a separate mechanism for determining such issues.

The court, quite candidly, observed that Novartis has to take its grievance that the India law is not in compliance with the TRIPS Agreement before the Dispute Settlement Body of the WTO.

On the second issue, the court after discussing the Indian law on the point, refused to grant relief to Novartis saying no purpose will be served by doing so.

On the critical issue of whether Section 3(d) was violative of Article 14 of the Constitution of India, which guarantees ‘equality before the law’ and ‘equal protection of the laws’, the court came to the conclusion, citing elaborate reasons to support its findings, that Section 3(d) is not violative.

Apart from the significant observations made by the court on the aspect of international law and how the Indian courts will resolve a dispute between a domestic law and an international obligation, the decision will be remembered for the manner in which the court had upheld the legitimate flexibilities available within the TRIPS Agreement.

The TRIPS Agreement, it should be remembered, is a minimum-standard agreement.

The Doha Declaration of the TRIPS Agreement categorically provides for the members to utilise the legitimate flexibilities within the agreement.

The Doha Declaration provides that the TRIPS Agreement ‘can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.’

Section 3(d) of the Patents Act 1970 can be seen as a legitimate provision which works within the framework of the TRIPS Agreement in providing exceptions to patentability.

What the section, in effect, provides is that ‘a new form of a known substance which does not result in the enhancement of the known efficacy of that substance’ shall not be regarded as an invention within the meaning of the Patents Act.

Section 3(d) does not in anyway impede patenting new chemical entities or new drug molecules, which will be patentable under the Indian Act in the same manner in which it would be patented in US, Europe or elsewhere.

The section comes as a bar to a phenomenon known as ‘ever-greening’ whereby inventions are ‘tweaked’ with superficial improvements for which a fresh 20-year period of protection is claimed.

By introducing section 3(d) into the Patents Act, India became the first country in the world to legislatively tackle the problem of ever-greening and yet provide for patenting known substances where the inventor is able to show an enhancement of known efficacy.

The decision of the Madras High Court comes as a harbinger of self-assertion and will hopefully pave the path for a new understanding on patentability of medicines.

Feroz Ali is a Chennai-based advocate and author of The Law of Patents - With a Special Focus on Pharmaceuticals in India, published by LexisNexis Butterworths India. In a special chapter, the book details the Novartis case.