Patent system is a contract between the inventor and authority whereby the inventor gets exclusive rights for a period of 20 years in return for disclosing full details of the invention. The main purpose of patent system is to encourage innovation and eventually results in technological development.

The present Patents Act, 1970 came into force in the year 1972, amending and incorporating the existing laws relating to Patents and Designs act 1911 in India. The Patent (amendment) Act 2005 came into force from 1st January 2005,which brought changes in the previous patent system of India wherein product patent was extended to all subjects of technology consisting of food, drugs, chemicals and micro organisms. Moreover, Section 3(d) introduced in to the said amendment act 2005 and introduces pharmaceutical product patents in India for the first time. The Patent (amendment) Act 2005 defines what invention is and makes it clear that any existing knowledge or thing cannot be patented. The provision defines that a ‘novelty’ standard - which, along with ‘non-obviousness’ or ‘inventive  step’ and industrial applicability, are the three prerequisites for ‘patentability’. “Discovery” essentially refers to finding out something which already existed in nature but was unknown or unrecognised. Therefore, discoveries are excluded from patent protection under section 3 of the Indian Patent Act 1970.

SECTION 3(D) STIPULATES THAT-

The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant, is not patentable2.

MERE DISCOVERY OF A NEW FORM OF KNOWN SUBSTANCE

A mere discovery of a new property of known substance is not considered patentable. For instance, the paracetamol has antipyretic property. Further discovery of new property of paracetamol as analgesic can not be patented. Similarly, ethyl alcohol is used as solvent but further discovery of its new property as anti knocking, thereby making it usable as fuel, can not be considered patentable.3

MERE DISCOVERY OF ANY NEW USE OF KNOWN SUBSTANCE

For instance, new use of Aspirin for treatment of the cardio-vascular disease, which was earlier used for analgesic purpose, is not patentable. However, a new and alternative process for preparing Aspirin is patentable. Similarly, the new use of methyl alcohol as antifreeze in automobiles is not patentable. The use of methanol as a solvent is known in the prior art. A new use has been claimed in this claim as antifreeze which is not allowable.4

The main objective of this section is to prevent several pharmaceutical companies from obtaining patents on old medicines which are just a mere increment or trivial improvement of  the known  substances and also  a refusal to the patent on discovery of new form or new use of old drugs.

The most recent case, Novartis AG v Union of India5 decided by Supreme Court of India in 2013 where the case began in the year 1997 with patent application filed by the petitioner before Chennai patent office related to drug name GLIVEC which was slightly a different version of their 1993 patent for ANTI LEUKAEMIA drug. In this case the Assistant Controller of Patent and design, Chennai Patent Office rejected the application under section 3(d) of the Indian patent act 1970. Consequently the petitioner challenged the constitutionality of section 3(d) before High Court at Madras.

The applicant in the present appeal contented on two issues:

  • Section 3(d) is unconstitutional as it violates the provision of the TRIPS agreement.
  • The Indian patent act doesn't define the term 'efficacy' and provides unguiede power on the Controller. Hence it is arbitrary, illogical and vague

In response to the above contention the court held that:

  • The WTO's Dispute Settlement provides the exclusive remedy adn a comprehensive dispute mechanism for violation of TRIPS Agreement. The High Court looked into the conflict between the international law and municipal law and decided that municipal law prevails in such conflict. Moreover, in India, international treaties are not directly enforceable.
  • The court also rejected the second contention that the provision is providing unguieded power to the patent controller being arbitrary on the basis of the term 'efficacy' was undefined and therefore the court observed that  "Efficacy means the ability to produce a desired or intended result. Hence, the test of efficacy in the context of section 3(d) would be different, depending upon the result the product under consideration is desired or intended to produce. In other words, the test of efficacy would depend upon the function, utility or the purpose of the product under consideration. Therefore, in the case of medicine that claims to cure a deisease, the test of efficacy cany only be 'therapeutic efficacy'.

Therefore it is found that the Novartis’patent application for the beta-crystalline form of Imatinib Mesylate (polymorph B) did not pass the test of section 3(d) as it did not have any enhanced therapeutic efficacy. The Supreme Court thereby upheld the observation of the High Court and Indian Patent office and rejected the patent application filed by the petitioner.

The provision under section 3(d) has been approved by  WHO Public Health,Innovation and Intellectual Property

Rights Report, 2006, that countries can adopt legislation and examination guidelines requiring a level of inventiveness that would prevent ever-greening patents from being granted. The ruling of the Novartis’s case in Indian patent law represents a major victory for community’s access to inexpensive medicines in developing countries and influences the access of medicines to the poor. If Novartis had succeeded the case, patenting on drugs would have likely been approved more widely in India, restricting generic competition and thus also hindering access to reasonable medicines in the developing world. Moreover the practice is anti competitive in its effect as the practice will enable pharmaceutical MNCs to eliminate competition from the generic manufacturers and charge exorbitant prices for their patented drugs. This in turn will cause adverse effect to public interest in developing countries since many essential drugs become inaccessible to the general public on account of unaffordable pricing.

CRITICISM OF SECTION 3(D) OF INDIAN PATENT ACT 1970

Section 3(d) specifically disallows patent protection for mere discovery of known substances unless such substance express substantial efficacy in the known substance. In effect of this provision it expressly excludes such substances having incremental innovations.The provision is disputed as being violative of TRIPS agreement not only on the ground that the provision does not provide any specific guidelines for incremental innovation but also lake the standard protection to all categories of inventions as provided by TRIPS. Novartis’s case further pointed out that the TRIPS agreement gives WTO members the option of providing patent rights more generous than the basic criteria mandated by TRIPS but does not allow members to go in the opposite direction by implementing stricter requirements for obtaining a patent. The court defines the scope of the term efficacy as therapeutic efficacy. However the scope of the term is unclear as to what count as therapeutic efficacy. The court fails to give the rationale as to why subject matter lacks enhanced efficacy. Consequently, because of the interpretation aforesaid mentioned any kind of incremental innovation will not get patent protection in India6.

CONCLUSION

Notwithstanding the compatibility of section 3(d) with TRIPs agreement, it has been comprehended that the words of the relevant section is inadequate as it lacks clarification. The act does not specifically define the scope of enhanced efficacy nor is there any guidelines stated in that effect. Therefore it is important to alter the wordings of section 3(d) to clarify the meaning of enhanced efficacy. However, the significant provisions in TRIPS clearly indicate that member nations have been given significant flexibilities to frame patent laws which reflect their social and economic needs. Article 27.1 of the TRIPS agreement does not provide any definition for the term invention, inventive steps and industrial application and therefore the member countries are provided flexibility to establish the criteria of atentability. In the absence of a precise definition of patentability, there is nothing to prevent the Section 3(d) from using an “efficacy” requirement, i.e. a higher level of inventiveness for determining patentability of new forms of known substances. Accordingly, in order to acquire patent protection in India, the substance has to go beyond establishing the novelty,inventive steps,non obviousness and industrial application test set forth in TRIPS agreement and also fulfill the additional improved efficacy incorporated under section 3(d). It is concluded that Section 3(d) does not violate the TRIPS mandate rather prevents frivolous patenting without neglecting valuable incremental innovations in pharmaceuticals and is very well compatible with TRIPS agreement.

Shraddha Deb, Student of LLB , 5th Year , KIIT Law School, Bhubaneswar, Odisha