Amity Institute of Advanced Legal Studies

Amity University Uttar Pradesh

Subject:
Business Law VI (Intellectual Property)

Topic of Assignment:
Novartis v Union of India: Strengthening India’s Patent Law Against
Evergreening

Submitted to:
Mr. Arun Upadhyay Sir

Submitted By:
1. Aman Kumar Rana
Enrolment No. A0319324008
LLM (BUSINESS LAW)
Batch 2024-2025
 Introduction
The Novartis v. Union of India (2013) case is a landmark decision in Indian patent law that
reinforced Section 3(d) of the Patents Act, 1970. This section prevents pharmaceutical
companies from getting new patents on existing drugs by making minor changes that do not
significantly improve their effectiveness. This practice, known as evergreening, allows
companies to extend their monopoly over a drug, keeping prices high and restricting access to
affordable medicines. The Supreme Court’s judgment in this case played a crucial role in
ensuring that patents are granted only for genuine innovations that provide real therapeutic
benefits.

The case began when Novartis, a Swiss pharmaceutical company, applied for a patent on a
modified version of its cancer drug, Glivec (imatinib mesylate). The company argued that the
new beta-crystalline form of the drug was an improvement. However, the Indian Patent
Office rejected the application, stating that the modification did not make the drug
significantly more effective in treating patients. Novartis challenged this decision, arguing
that Section 3(d) was unfair and violated international patent laws (TRIPS Agreement).

In 2013, the Supreme Court of India upheld the rejection, ruling that small modifications to
an existing drug, without real improvements in its effectiveness, do not deserve a new patent.
This decision prevented evergreening, ensuring that generic drug manufacturers could
continue producing affordable versions of essential medicines.

The impact of this judgment was significant. It helped maintain India's role as the “pharmacy
of the developing world”, providing low-cost medicines to millions of people. It also set an
important example for other countries, reinforcing that patent laws should balance innovation
with public health needs. Additionally, the ruling encouraged domestic pharmaceutical
companies to invest in genuine research and development rather than relying on minor
modifications for patent extensions.

This assignment will explore the legal aspects, impact, and challenges of the Novartis case,
showing how it strengthened Indian patent law while protecting access to life-saving drugs.
The judgment reflects India’s commitment to affordable healthcare and its fight against
monopolistic practices in the pharmaceutical industry.
 Evergreening in Patent Law
Evergreening is a practice where pharmaceutical companies try to extend the monopoly on a
drug by making minor modifications to an existing patented drug without significant
therapeutic benefits. When a company develops a new drug, it obtains a patent, which grants
it exclusive rights to manufacture and sell the drug for a fixed period (typically 20 years).
However, once the patent expires, other manufacturers can produce generic versions, which
are usually cheaper and reduce the original company's profits. Generic versions refer to drugs
that are made after the patent on the original (brand-name) drug expires. These drugs have the
same active ingredients, dosage, strength, safety, and effectiveness as the original but are sold
at a much lower price. To prevent or delay the entry of generics, companies use evergreening
tactics, which involve making minor modifications to the drug or its formulation and
applying for a new patent. Some of these modifications may include:

 Changing the dosage form (e.g., from a tablet to an extended-release capsule)

 Altering the method of administration (e.g., from an injection to an oral tablet)
 Adding new combinations of existing drugs
 Making minor chemical modifications without significantly improving efficacy

By doing this, the company extends the life of its patent protection, preventing competition
and keeping drug prices high.

Evergreening of patents is widely criticized because it limits access to affordable medicines

by delaying the entry of generic drugs into the market. Since generic versions are
significantly cheaper, patients—especially in developing countries—struggle to afford
essential medicines when evergreening tactics are used. Critics argue that this practice does
not always lead to true innovation, as the modifications made to existing drugs are often
minor and do not significantly improve their effectiveness. Instead, it allows pharmaceutical
companies to unfairly extend their monopoly and keep drug prices high. This, in turn,
increases healthcare costs for individuals and governments, placing a financial burden on
public health systems. To address this issue, legal measures like Section 3(d) of the Indian
Patents Act, 1970 restrict the patenting of modified drugs unless they demonstrate enhanced
therapeutic efficacy. Such regulations aim to strike a balance between encouraging
innovation and ensuring that life-saving medicines remain accessible and affordable to the
public.
 Indian Patent Law
The evolution of Indian Patent Law has been shaped by the country’s economic and
healthcare needs, as well as international trade agreements. Over time, India has transitioned
from a pro-public health approach to a balanced system that protects both innovation and
access to affordable medicines.

Early Patent Laws in India

 Pre-Independence Era (1856 to 1947)

India’s first patent law was introduced in 1856 during British rule, modelled after the
British Patent Law of 1852. Later, in 1911, the Indian Patents and Designs Act was
enacted, which allowed product patents in all fields, including medicines. This law
largely favoured foreign pharmaceutical companies, as it granted exclusive
monopoly rights to patent holders, making medicines expensive and less accessible
to the general public.

 Post-Independence Reform (1950-1970)

After independence in 1947, India needed to develop its own pharmaceutical industry
and reduce dependence on expensive imported medicines. Based on the Justice
Bakshi Tek Chand Committee (1949) and Justice Ayyangar Committee Report
(1959), India decided to revise its patent laws to encourage local drug production. In
1970, the Indian Patents Act was passed which removed product patents on medicines
and only allowed process patents. This meant that Indian companies could legally
manufacture medicines as long as they used a different process from the original
patent holder.

 TRIPS Agreement and Introduction of Product Patents (1995-2005)

In 1995, India joined the World Trade Organization (WTO), which required
compliance with the TRIPS Agreement (Trade-Related Aspects of Intellectual
Property Rights). Hence to comply with the TRIPS Agreement, India amended its
Patent Act in 2005 and had to adopt product patents but with safeguards like Section
3(d) to prevent evergreening.
 Section 3(d) of the Patents Act, 1970
Section 3(d) of the Indian Patents Act, 1970 is one of the most critical provisions in India's
patent law, especially in the pharmaceutical sector. The primary objective of Section 3(d) is
to prevent the grant of patents on minor modifications of known drugs unless these
modifications result in a significant increase in therapeutic efficacy.
According to the bare provision of Section 3(d) of the Patents Act, 1970:
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 an invention within the meaning of this Act.

Importance of Section 3(d):

 Preventing Evergreening of Patents

Evergreening is a common strategy used by pharmaceutical companies to extend

their patent monopoly by making small changes to existing drugs instead of
developing new medicines. Section 3(d) stops companies from unfairly extending
their control over essential drugs, ensuring that patents are granted only for genuine
innovations.

 Ensuring Access to Affordable Medicines

By restricting unnecessary patents, Section 3(d) allows Indian pharmaceutical

companies to produce generic versions of life-saving drugs once the original patent
expires. This has helped India become a global leader in affordable medicine
production, benefiting millions of patients worldwide.

 Encouraging Genuine Research and Innovation

Instead of relying on trivial modifications to extend patents, companies are

encouraged to focus on true research and development (R&D) to create new and
more effective drugs. This provision ensures that patents reward real innovation
rather than minor alterations.
 Novartis v. Union of India: Case Analysis
The case of Novartis AG v. Union of India (2013) is one of the most significant judgments in
Indian patent law, particularly in the pharmaceutical sector. It revolves around the
interpretation of Section 3(d) of the Patents Act, 1970, which prevents the practice of
evergreening where pharmaceutical companies extend their monopoly by making minor
modifications to existing drugs without substantial improvement in their therapeutic efficacy.
Facts:
In 1998, one of the largest international pharmaceutical companies i.e. Novartis International
AG (appellant) filed an application before the Chennai Indian patent office for the grant of a
patent for an anticancer drug ‘Glivec’ which is used to treat Chronic Myeloid Leukemia
(CML) and Gastrointestinal Stromal Tumours (GIST) invented from Beta crystalline form of
“Imatinib mesylate”.
At first, the request of the appellant was denied under Section 5 of the Patents Act,
1970 which said, “Inventions were only methods or processes of manufacture patentable”.
Later, the Patent (Amendment) Act, 2005 repealed Section 5 and patents came to be granted
not only for methods or processes but also for products. In 2005, patent application of
Novartis for the drug Glivec was taken into consideration and the same was rejected by
Madras Patent Office on the ground that the drug was anticipated by prior publication and
failed to satisfy the requirement of novelty and non-obviousness, further stating the alleged
invention as un-patentable under the provision of section-3(d) of Patent Act, 1970 as the said
drug did not show better effectiveness over its pre-existing form i.e. Zimmermann. After
that Novartis filed SLP (Special Leave Petition) in 2009 before the Supreme Court of India.
Issue:
 Whether the invention "Beta crystalline form of imatinib mesylate" claimed by
Novartis is more efficacious than the substance that it was derived from i.e. "Imatinib
mesylate"?
 What is the test of efficacy in the context of Section 3(d) of the Patent Act, 1970?

Judgment:
In April 2013, the two judge bench of Supreme Court of India rejected the appeal filed by
Novartis and upheld that the beta crystalline form of Imatinib Mesylate is a new form of the
known substance i.e., Imatinib Mesylate, wherein the efficacy was well known. Supreme
Court made it crystal clear that in the case of medicine “Efficacy” in section-3(d) only means
“Therapeutic Efficacy” and states that all properties of drug are not relevant, the properties
which directly relate to efficacy in case of medicine is its therapeutic efficacy. Supreme
Court compared the efficacy of “Beta Crystalline form of Imatinib Mesylate” with “Imatinib
Mesylate” with reference to its flow properties, better thermodynamic stability and lower
hygroscopicity, and held that none of these properties contribute to increase in therapeutic
efficacy according to section-3(d) of Patent Act, 1970 and Novartis not provided any
document that shows that the efficacy of “Beta Crystalline form of Imatinib Mesylate” is
more as compared to the efficacy of “Imatinib Mesylate”.
The judgment given by the Hon’ble Supreme Court is to prevent the ever-greening of
patented products and gives relief to those who can’t afford the lifesaving drug as these
pharmaceutical companies sell such lifesaving drugs at a very high price hence unaffordable
for the common man. Supreme Court in its judgment made clear that India is a developing
country and the availability of medicines at a cheaper rate is necessary for the lives of 1
billion people. Section-3(d) of Patent Act, 1970 prevents by obtaining secondary patent by
introducing minor changes in existing technology from these big pharmaceutical companies.
Novartis failed to prove that the therapeutic efficacy of “Beta Crystalline form of Imatinib
Mesylate” is more as compared to the therapeutic efficacy of “Imatinib Mesylate”. So the
application by Novartis for patent was rejected by the court.
 Impact of Novartis judgment
The Novartis v. Union of India (2013) judgment had a profound impact on Indian patent law,
public health, pharmaceutical industries, and global intellectual property (IP) policies. By
rejecting Novartis’ patent application for the beta-crystalline form of Imatinib Mesylate
(Glivec) under Section 3(d) of the Patents Act, 1970, the Supreme Court of India reinforced
the country’s stance against evergreening and emphasized the importance of therapeutic
efficacy in patentability. The judgment had far-reaching effects in multiple areas:

Strengthening India's stance against evergreening

One of the most important impacts of the judgment was its role in preventing evergreening—
a strategy used by pharmaceutical companies to extend their patent rights by making minor
modifications to existing drugs. The ruling:

 Clarified the scope of Section 3(d), ensuring that mere modifications like better
absorption, increased stability, or a different form of the same drug would not qualify
for a new patent unless they showed real therapeutic benefits.
 Set a strong precedent for rejecting weak patent applications aimed at unjustifiably
extending monopoly rights.
 Protected generic drug production, ensuring that life-saving medicines remained
affordable and accessible.

Ensuring Affordable Medicines for the Public

The Novartis judgment played a crucial role in ensuring the availability of affordable
medicines for the public, particularly in India and other developing nations. By rejecting
Novartis' patent for the beta-crystalline form of Imatinib Mesylate (Glivec), the ruling
allowed generic manufacturers to continue producing the drug at a significantly lower cost.
Novartis' Glivec (400 mg): Priced at ₹2,235.63 for a strip of 10 tablets, equating to
approximately ₹6,700 per month, assuming a standard dosage of one tablet per day. Whereas
Generic alternatives like Imatib 400 mg by Cipla Ltd: Available at ₹85.8 per tablet, totaling
around ₹2,574 per month and Veenat 400 mg by Natco Pharma Ltd: Priced at ₹163.5 per
tablet, amounting to approximately ₹4,905 per month. These figures highlight the significant
cost difference between the branded and generic versions, underscoring the impact of the
Novartis judgment in promoting the availability of affordable generic medications in India.
Impact on the Indian Pharmaceutical Industry

India is a global leader in generic medicine production, and the ruling:

 Encouraged domestic pharmaceutical companies to continue their focus on producing

affordable, high quality generics.
 Prevented foreign pharmaceutical companies from blocking competition through
weak patents.
 Motivated Indian pharma companies to invest in real drug innovation rather than
simply reproducing or modifying existing drugs.

Global Influence on Patent Laws & Public Health

The decision set a precedent for other developing nations, encouraging them to prioritize
public health over corporate patent monopolies. It also sparked discussions on balancing
intellectual property rights and public welfare in international trade agreements.
 Criticism of the Novartis Judgment

The Novartis judgment by the Supreme Court of India, while widely praised for prioritizing
public health over patent monopolies, has faced several criticisms, particularly from the
pharmaceutical industry and international trade experts. The major concerns are as follows:

 Discouragement of Pharmaceutical Innovation

One of the primary criticisms is that India's strict interpretation of Section 3(d) of the Indian
Patents Act discourages pharmaceutical innovation. The judgment rejected the patent for
Novartis' Glivec on the grounds that it was merely a modification of an existing drug without
significant therapeutic enhancement. However, pharmaceutical companies argue that
incremental innovations, such as improved formulations and delivery methods, are essential
for drug efficacy and patient compliance. By denying patents for such innovations, India may
discourage companies from investing in new drug developments.

 Reduced Incentive for Drug Development

The pharmaceutical industry operates on a high-risk, high-investment model, where

significant capital is required for research and development (R&D). Patent protection ensures
that companies can recover their investments by granting them exclusive rights for a limited
period. Critics argue that by making patent approvals more difficult, India’s approach could
reduce the incentive for drug development, especially for diseases that require sustained
research efforts. As a result, multinational companies may shift their focus to markets with
stronger patent protection, potentially delaying or limiting access to new treatments in India.

 Negative Impact on Foreign Investment

The ruling raised concerns about India's intellectual property (IP) regime, particularly among
foreign investors. Global pharmaceutical companies often consider strong patent protection
as a key factor in deciding where to invest. India’s decision to reject the Novartis patent
signalled a strict and unpredictable patent landscape, making companies wary of introducing
their latest drugs in the Indian market. This could lead to reduced foreign direct investment
(FDI) in India's pharmaceutical sector, ultimately affecting economic growth and
employment opportunities.
  Delayed Access to Advanced Drugs

A key concern is that multinational pharmaceutical companies, fearing patent rejections, may
delay the launch of new drugs in India. As a result, Indian patients might not have timely
access to the latest treatments available in other countries.

While the judgment promotes public health, critics argue that it creates hurdles for
innovation, investment, and drug availability, raising questions about the long-term
implications of India’s patent policies.
 Conclusion

The Novartis judgment (2013) marked a significant step in strengthening India’s patent law
by firmly rejecting evergreening—a practice where pharmaceutical companies try to extend
their monopoly by making minor changes to existing drugs. By upholding, the Supreme
Court ensured that only drugs with Section 3(d) of the Indian Patents Act, 1970genuine
therapeutic advancements receive patent protection.

This decision had a major impact on affordable healthcare, as it allowed generic drug
manufacturers to continue producing life-saving medicines at lower prices. India, known as
the "pharmacy of the developing world," reaffirmed its commitment to making essential
drugs accessible to millions of people, both in India and globally.

While some critics argued that the ruling might discourage innovation and reduce foreign
investment in India’s pharmaceutical sector, it ultimately set a fair balance between
intellectual property rights and public health. The decision made it clear that patents should
be granted only for real scientific progress, not just for minor modifications aimed at
maintaining market exclusivity.

By taking a strong stand against evergreening, the Novartis judgment reinforced India’s
position as a leader in pro-patient patent policies. It also encouraged other developing
countries to adopt similar measures, ensuring that patent laws serve their true purpose
promoting genuine innovation while keeping essential medicines affordable.