NOVARTIS AG v. UNION OF INDIA OTHERS Judgment by The Supreme Court of India Lyrics
Aftab Alam, J.
1. 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 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 tumors 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 out 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 context for the debate.
5. Jürg Zimmermann invented a number of derivatives of N-phenyl-2-pyrimidine-amine, one of which was CGP 57148 in free base form (later given the International Nonproprietary Name 'Imatinib' by the World Health Organisation). These derivatives, including Imatinib, are capable of inhibiting certain protein kinases, especially protein kinase C and PDGF (platlet-derived growth factor)-receptor tyrosine kinase and thu have valuable anti-tumor 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 Imatinib 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 appelant, 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 state 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, for that 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 — 1
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 heating in a manner to preserve the solution from escapaing 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 1 ethnol.
Step 8 - The supsension 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 Celcius, 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 of 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 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 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 Celcius. 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) for grand 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 ans is easier to process"; has "better processability of the methanesulfonic acid addition salt of a compound of forumula 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, t was unambiguously stated in the patent application as under:It goes without saying that all the indicated inhibitory and pharmacological effects are also found in 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 β−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 preperation 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". Only 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, wth effect from January 1, 2005. But before t was taken up for consideration, the patent application had attracted five (5) pre-grant oppositions 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 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 persona 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 priorty 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 alleged invention won’t be worthy of a reward of any product patent on the basis of its impugned application for not only for not satisfying the requirement of section 3(d) of the Act, but also for its possible disastrous consequences on such grant as stated above, which also is being attracted by the provisions of section 3(b) of the Act which prohibits grant of patent on inventions, exploitation of which could create public disorder among other things (Sic .) We, therefore, uphold the decision of R 8 on section 3(d) of the Act to the extent that product patent cannot be made available to the Appellant…”20. Though agreeing with the Assistant Controller that no product patent for the subject patent could be allowed in favour of the appellant, the IPAB held that the appellant could not be denied the process patent for preparation of Imatinib Mesylate in beta crystal form.
The IPAB ordered accordingly.
21. Against the order of the IPAB the appellant came directly to this Court in a petition under Article 136 of the Constitution. When the matter was first taken up before this Bench, we first thought of dismissing the SLPs at the threshold as the appellant had an alternative remedy to challenge the judgment and order of the IPAB before the Madras High Court. However, Mr. Gopal Subramanium, the senior advocate appearing for the appellant, submitted that the SLPs were filed on August 11, 2009, and the Court issued notice to the respondents on September 11, 2009. Further, before coming to this Bench, the matter was listed before another Bench, where it was heard on merits on different dates from August 9, 2011 to September 6, 2011. Mr. Subramanium further submitted that relegating the appellant to the High Court might render the matter infructuous in as much as the period for the patent applied for would come to end after 20 years from the date of the application, i.e. in July 2018. He submitted that the High Court would take at least 2 – 3 years before a final decision would be rendered and then, whatever be the High Court’s decision, the matter was bound to come to this Court. In this to and fro whatever remains of the patent period would also lapse. Mr. Subramanium further submitted that the case involved a number of seminal issues and it was in the larger interest that an authoritative pronouncement on those issues be made by this Court.
22. Initially some of the respondents strongly opposed the maintainability of the petitions made directly to this Court by-passing the High Court, but in the end all agreed that given the importance of the matter, this Court may itself decide the appeals instead of directing the appellant to move the High Court. It is in such circumstances that we agreed to hear the parties and decide the appeals on merits. However, we, wish to make it clear that any attempt to challenge the IPAB order directly before this Court, side-stepping the
High Court, needs to be strongly discouraged and this case is certainly not to be treated as a precedent in that regard.
23. As this Court now proceeds to decide the case on merits, it needs to be noted that after notice was issued in the SLPs filed by Novartis AG, all the five parties who had filed pre-grant oppositions before the Controller (hereinafter referred to as the Objectors) filed their respective counter-affidavits. Two of the Objectors, namely NATCO Pharma Ltd. and M/s Cancer Patients Aid Association, additionally filed Special Leave Petition, challenging the findings recorded by the IPAB in favour of Novartis AG. Leave to appeal has also been granted in all those SLPs, and hence, all the issues are open before this Court and this Court is deciding the case unbound by any findings of the authority or the tribunal below.
24. In connection with the case of the appellant, the first and foremost thing that needs to be kept in mind is that it falls in the transitional period between two fundamentally different patent regimes. In 1998, when the application was made on behalf of the appellant, the Patents Act, 1970, had a provision in section 5 with the marginal heading, “Inventions where only methods or processes of manufacture patentable” that barred grant of patent to substances intended for use, or capable of being used, as food or medicine or drug, or prepared or produced by chemical processes. The application was then put in the “mailbox” and was taken out for consideration when many changes had been made in the Patents Act, 1970, with effect from January 1, 2005, to make the patent law in the country compliant with the terms of an international agreement entered into by the Government of India. Following the international agreement, the Patents Act, 1970, was subjected to large scale changes in three stages; and finally, by the Patents (Amendment) Act, 2005, section 5 was altogether deleted from the Parent Act (Patents Act, 1970). Between January 1, 1995 and January 1, 2005, the Patents Act, 1970, underwent wide ranging changes, but if we are asked to identify the single most important change brought about in the law of patent in India as a result of the country’s obligations under the international agreement, we would unhesitatingly say the deletion of section 5 from the Patents Act, which opened the doors to product patents in the country. It is, however, important to note that the removal of section 5 from the statute book was accompanied by amendments in clauses (j) and (ja) of section 2(1), apart from some other ancillary clauses of section 2(1), as well as amendments in section 3, which redefined the concepts of invention and patentability.
25. Some important provisions of the Patents Act, 1970, as they stand after the amendment of the Act in 2005, and with which we are especially concerned in this case, indeed present a problem of interpretation. Why was section 5, which, in one sense, was the distinctive feature of the patent law in India, taken off the statute book? What does the legislature wish to say through clauses (j) and (ja) of section 2(1), section 3 and several other sections? How is it that some of the provisions of the Act apparently seem to be of no use or purpose, e.g., sections 2(1)(l) and 2(1)(ta)? Why is it that some of the crucial provisions in the Act appear to be wanting in precision and clarity?
26. It is easy to know why section 5 was deleted but to understand the import of the amendments in clauses (j) and (ja) of section 2(1) and the amendments in section 3 it is necessary to find out the concerns of Parliament, based on the history of the patent law in the country, when it made such basic changes in the Patents Act. What were the issues the legislature was trying to address? What was the mischief Parliament wanted to check and what were the objects it intended to achieve through these amendments?
27. The best way to understand a law is to know the reason for it. In Utkal Contractors and Joinery Pvt. Ltd. and others v. State of Orissa and others, Justice Chinnappa Reddy, speaking for the Court, said:“9. … A statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from the reason for it. How do we discover the reason for a statute? There are external and internal aids. The external aids are statement of Objects and Reasons when the Bill is presented to Parliament,the reports of committees which preceded the Bill and the reports of
Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the preamble, the scheme and the provisions of the Act. Having discovered the reason for the statute and so having set the sail to the wind, the interpreter may proceed ahead…”
(emphasis added)28. Again in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and others Justice Reddy said:“33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context.With these glasses we must look at the Act as a whole and discover what eac section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression 'Prize Chit' in Srinivasa and we find no reason to depart from the Court's construction.”
(emphasis added)29. In order to understand what the law really is, it is essential to know the “why” and “how” of the law. Why the law is what it is and how it came to its present form? The adage is more true in case of the law of patents in India than perhaps any other law.
30. Therefore, in order to correctly understand the present law it would be necessary to briefly delve into the legislative history of the law of patents in the country.
31. At the time of Independence, India’s patent regime was governed by the Patents and Designs Act, 1911, which had provisions both for product and process patents. It was, however, generally felt that the patent law had done little good to the people of the country. The way the Act was designed benefited foreigners far more than Indians. It did not help at all in the promotion of scientific research and industrialization in the country, and it curbed the innovativeness and inventiveness of Indians.
32. Shortly after Independence, therefore, in 1949, a committee was constituted under the chairmanship of Justice (Dr.) Bakshi Tek Chand, a retired judge of the Lahore High Court, to undertake a comprehensive review of the working of the 1911 Act.
33. The Committee submitted its interim report on August 4, 1949 and the final report in 1950 making recommendations for prevention of misuse or abuse of patent rights in India. It also observed that the Patent Act should contain a clear indication that food and medicine and surgical and curative devices were to be made available to the public at the cheapest price commensurate with giving reasonable compensation to the patentee. Based on the committee’s recommendations, the 1911 Act was amended in 1950 (by Act XXXII of 1950) in relation to working of inventions, including compulsory licensing and revocation of patents. In 1952, a further amendment was made (by Act LXX of 1952) to provide for compulsory license in respect of food and medicines, insecticide, germicide or fungicide, and a process for producing substance or any invention relating to surgical or curative devices. The committee’s recommendation prompted the Government to introduce a bill (Bill no. 59 of 1953) in Parliament, but the bill was not pressed and it was allowed to lapse.
34. In 1957, another committee came to be appointed under the chairmanship of Justice N. Rajagopala Ayyangar to take a fresh look at the law of patent and to completely revamp and recast it to best sub-serve the (contemporary) needs of the country.
35. Justice Ayyangar painstakingly collected valuable data (taking the figures for the years 1930 to 1939 from the Bakshi Tek Chand report) and, compiling them into a number of tables, showed the share of Indians in the field of patents. He analyzed the figures in the tables and pointed out that during the period 1930-37, the grant of patents to Indians and foreigners was roughly in the ratio of 1:9. Even after Independence, though a number of institutions for post-graduate training were set up and several national laboratories were established to encourage a rapid growth of scientific education, the proportion of Indian and the foreign patents remained substantially the same, at roughly 1:9. Justice Ayyangar further pointed out that this ratio does not take into account the economic or industrial or scientific importance of the inventions. If these factors are taken into account, Indians would appear to be lagging even further behind. Further, taking into reckoning the number of inventions for which renewal fees were paid beyond the 6th year, which would give a rough idea of the value attached to the invention by the patentee, the patents taken by Indians would appear to be of little worth as compared with patents held by foreign nationals.
1. 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 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 tumors 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 out 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 context for the debate.
5. Jürg Zimmermann invented a number of derivatives of N-phenyl-2-pyrimidine-amine, one of which was CGP 57148 in free base form (later given the International Nonproprietary Name 'Imatinib' by the World Health Organisation). These derivatives, including Imatinib, are capable of inhibiting certain protein kinases, especially protein kinase C and PDGF (platlet-derived growth factor)-receptor tyrosine kinase and thu have valuable anti-tumor 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 Imatinib 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 appelant, 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 state 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, for that 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 — 1
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 heating in a manner to preserve the solution from escapaing 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 1 ethnol.
Step 8 - The supsension 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 Celcius, 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 of 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 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 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 Celcius. 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) for grand 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 ans is easier to process"; has "better processability of the methanesulfonic acid addition salt of a compound of forumula 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, t was unambiguously stated in the patent application as under:It goes without saying that all the indicated inhibitory and pharmacological effects are also found in 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 β−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 preperation 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". Only 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, wth effect from January 1, 2005. But before t was taken up for consideration, the patent application had attracted five (5) pre-grant oppositions 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 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 persona 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 priorty 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 alleged invention won’t be worthy of a reward of any product patent on the basis of its impugned application for not only for not satisfying the requirement of section 3(d) of the Act, but also for its possible disastrous consequences on such grant as stated above, which also is being attracted by the provisions of section 3(b) of the Act which prohibits grant of patent on inventions, exploitation of which could create public disorder among other things (Sic .) We, therefore, uphold the decision of R 8 on section 3(d) of the Act to the extent that product patent cannot be made available to the Appellant…”20. Though agreeing with the Assistant Controller that no product patent for the subject patent could be allowed in favour of the appellant, the IPAB held that the appellant could not be denied the process patent for preparation of Imatinib Mesylate in beta crystal form.
The IPAB ordered accordingly.
21. Against the order of the IPAB the appellant came directly to this Court in a petition under Article 136 of the Constitution. When the matter was first taken up before this Bench, we first thought of dismissing the SLPs at the threshold as the appellant had an alternative remedy to challenge the judgment and order of the IPAB before the Madras High Court. However, Mr. Gopal Subramanium, the senior advocate appearing for the appellant, submitted that the SLPs were filed on August 11, 2009, and the Court issued notice to the respondents on September 11, 2009. Further, before coming to this Bench, the matter was listed before another Bench, where it was heard on merits on different dates from August 9, 2011 to September 6, 2011. Mr. Subramanium further submitted that relegating the appellant to the High Court might render the matter infructuous in as much as the period for the patent applied for would come to end after 20 years from the date of the application, i.e. in July 2018. He submitted that the High Court would take at least 2 – 3 years before a final decision would be rendered and then, whatever be the High Court’s decision, the matter was bound to come to this Court. In this to and fro whatever remains of the patent period would also lapse. Mr. Subramanium further submitted that the case involved a number of seminal issues and it was in the larger interest that an authoritative pronouncement on those issues be made by this Court.
22. Initially some of the respondents strongly opposed the maintainability of the petitions made directly to this Court by-passing the High Court, but in the end all agreed that given the importance of the matter, this Court may itself decide the appeals instead of directing the appellant to move the High Court. It is in such circumstances that we agreed to hear the parties and decide the appeals on merits. However, we, wish to make it clear that any attempt to challenge the IPAB order directly before this Court, side-stepping the
High Court, needs to be strongly discouraged and this case is certainly not to be treated as a precedent in that regard.
23. As this Court now proceeds to decide the case on merits, it needs to be noted that after notice was issued in the SLPs filed by Novartis AG, all the five parties who had filed pre-grant oppositions before the Controller (hereinafter referred to as the Objectors) filed their respective counter-affidavits. Two of the Objectors, namely NATCO Pharma Ltd. and M/s Cancer Patients Aid Association, additionally filed Special Leave Petition, challenging the findings recorded by the IPAB in favour of Novartis AG. Leave to appeal has also been granted in all those SLPs, and hence, all the issues are open before this Court and this Court is deciding the case unbound by any findings of the authority or the tribunal below.
24. In connection with the case of the appellant, the first and foremost thing that needs to be kept in mind is that it falls in the transitional period between two fundamentally different patent regimes. In 1998, when the application was made on behalf of the appellant, the Patents Act, 1970, had a provision in section 5 with the marginal heading, “Inventions where only methods or processes of manufacture patentable” that barred grant of patent to substances intended for use, or capable of being used, as food or medicine or drug, or prepared or produced by chemical processes. The application was then put in the “mailbox” and was taken out for consideration when many changes had been made in the Patents Act, 1970, with effect from January 1, 2005, to make the patent law in the country compliant with the terms of an international agreement entered into by the Government of India. Following the international agreement, the Patents Act, 1970, was subjected to large scale changes in three stages; and finally, by the Patents (Amendment) Act, 2005, section 5 was altogether deleted from the Parent Act (Patents Act, 1970). Between January 1, 1995 and January 1, 2005, the Patents Act, 1970, underwent wide ranging changes, but if we are asked to identify the single most important change brought about in the law of patent in India as a result of the country’s obligations under the international agreement, we would unhesitatingly say the deletion of section 5 from the Patents Act, which opened the doors to product patents in the country. It is, however, important to note that the removal of section 5 from the statute book was accompanied by amendments in clauses (j) and (ja) of section 2(1), apart from some other ancillary clauses of section 2(1), as well as amendments in section 3, which redefined the concepts of invention and patentability.
25. Some important provisions of the Patents Act, 1970, as they stand after the amendment of the Act in 2005, and with which we are especially concerned in this case, indeed present a problem of interpretation. Why was section 5, which, in one sense, was the distinctive feature of the patent law in India, taken off the statute book? What does the legislature wish to say through clauses (j) and (ja) of section 2(1), section 3 and several other sections? How is it that some of the provisions of the Act apparently seem to be of no use or purpose, e.g., sections 2(1)(l) and 2(1)(ta)? Why is it that some of the crucial provisions in the Act appear to be wanting in precision and clarity?
26. It is easy to know why section 5 was deleted but to understand the import of the amendments in clauses (j) and (ja) of section 2(1) and the amendments in section 3 it is necessary to find out the concerns of Parliament, based on the history of the patent law in the country, when it made such basic changes in the Patents Act. What were the issues the legislature was trying to address? What was the mischief Parliament wanted to check and what were the objects it intended to achieve through these amendments?
27. The best way to understand a law is to know the reason for it. In Utkal Contractors and Joinery Pvt. Ltd. and others v. State of Orissa and others, Justice Chinnappa Reddy, speaking for the Court, said:“9. … A statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from the reason for it. How do we discover the reason for a statute? There are external and internal aids. The external aids are statement of Objects and Reasons when the Bill is presented to Parliament,the reports of committees which preceded the Bill and the reports of
Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the preamble, the scheme and the provisions of the Act. Having discovered the reason for the statute and so having set the sail to the wind, the interpreter may proceed ahead…”
(emphasis added)28. Again in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and others Justice Reddy said:“33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context.With these glasses we must look at the Act as a whole and discover what eac section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression 'Prize Chit' in Srinivasa and we find no reason to depart from the Court's construction.”
(emphasis added)29. In order to understand what the law really is, it is essential to know the “why” and “how” of the law. Why the law is what it is and how it came to its present form? The adage is more true in case of the law of patents in India than perhaps any other law.
30. Therefore, in order to correctly understand the present law it would be necessary to briefly delve into the legislative history of the law of patents in the country.
31. At the time of Independence, India’s patent regime was governed by the Patents and Designs Act, 1911, which had provisions both for product and process patents. It was, however, generally felt that the patent law had done little good to the people of the country. The way the Act was designed benefited foreigners far more than Indians. It did not help at all in the promotion of scientific research and industrialization in the country, and it curbed the innovativeness and inventiveness of Indians.
32. Shortly after Independence, therefore, in 1949, a committee was constituted under the chairmanship of Justice (Dr.) Bakshi Tek Chand, a retired judge of the Lahore High Court, to undertake a comprehensive review of the working of the 1911 Act.
33. The Committee submitted its interim report on August 4, 1949 and the final report in 1950 making recommendations for prevention of misuse or abuse of patent rights in India. It also observed that the Patent Act should contain a clear indication that food and medicine and surgical and curative devices were to be made available to the public at the cheapest price commensurate with giving reasonable compensation to the patentee. Based on the committee’s recommendations, the 1911 Act was amended in 1950 (by Act XXXII of 1950) in relation to working of inventions, including compulsory licensing and revocation of patents. In 1952, a further amendment was made (by Act LXX of 1952) to provide for compulsory license in respect of food and medicines, insecticide, germicide or fungicide, and a process for producing substance or any invention relating to surgical or curative devices. The committee’s recommendation prompted the Government to introduce a bill (Bill no. 59 of 1953) in Parliament, but the bill was not pressed and it was allowed to lapse.
34. In 1957, another committee came to be appointed under the chairmanship of Justice N. Rajagopala Ayyangar to take a fresh look at the law of patent and to completely revamp and recast it to best sub-serve the (contemporary) needs of the country.
35. Justice Ayyangar painstakingly collected valuable data (taking the figures for the years 1930 to 1939 from the Bakshi Tek Chand report) and, compiling them into a number of tables, showed the share of Indians in the field of patents. He analyzed the figures in the tables and pointed out that during the period 1930-37, the grant of patents to Indians and foreigners was roughly in the ratio of 1:9. Even after Independence, though a number of institutions for post-graduate training were set up and several national laboratories were established to encourage a rapid growth of scientific education, the proportion of Indian and the foreign patents remained substantially the same, at roughly 1:9. Justice Ayyangar further pointed out that this ratio does not take into account the economic or industrial or scientific importance of the inventions. If these factors are taken into account, Indians would appear to be lagging even further behind. Further, taking into reckoning the number of inventions for which renewal fees were paid beyond the 6th year, which would give a rough idea of the value attached to the invention by the patentee, the patents taken by Indians would appear to be of little worth as compared with patents held by foreign nationals.