Patent

NOVARTIS PATENT SAGA: FLAWED STRATEGY


There are valuable lessons that patent professionals can learn from the Novartis (Glivec) Patent Saga. The Hindu Business Line carried an interview with me in this regard. For those interested, please click here. I also attach the note that I passed on to them below:

“Recently, in a legal dispute involving the patentability of Novartis’s famed anticancer drug, Gleevec, the Madras High Court ruled that section 3(d) of the Indian Patents Act was constitutional. It also ruled that it did not have jurisdiction to adjudicate on the TRIPS challenge by Novartis. Having just signed a bilateral IP treaty with India, the Swiss government indicated that it is not interested in taking up cudgels on behalf of Novartis before the WTO.

To this extent, Novartis lost the battle. But will it win the war? One ought not to forget that the IPAB is still to decide on whether or not Gleevec is “patentable”.

Novartis is clearly upset with the Madras High judgment and now threatens to move its investments to China—a country that paradoxically figures in every press release as having one of the worst IP records. In fact, the US recently moved forward on its WTO action against China, alleging that the Chinese IPR machinery falls significantly short of TRIPS standards.

Novartis ought to know that the Indian government is more sophisticated than falling prey to this bullying tactic and caving in to the use of the “C” word. Gone are the days when the bureaucrat in charge of “fisheries” one day would be negotiating WTO agreements the next. We now have a fine cadre of government folks that specialize in IP issues and whose sophisticated voices have become a force to reckon with in the corridors of international IP law making, particularly WIPO.

Taking on a government that is slated to become a leading economic superpower in the years to come and challenging it’s pro public health legislation is poor strategy. Particularly so, when one is pitted against powerful public health activists, that have strategically positioned the debate as one that hinges more on “morality” and less on patent law “technicality”.

The short sightedness of Novartis’ strategy is compounded by a recent McKinsey report that predicts that the Indian pharmaceutical market will treble to 20 billion dollars in the next 10 years. Quite clearly, by moving away to China, Novartis will lose out on some of this valuable pie.

Compare and contrast Novartis’ aggressive and weakly thought out patent strategy with that of Roche, which has gone on to acquire four patents already. Its patent covering pegylated interferon (Pegasus) has now been challenged in a post grant opposition, but one hardly hears of this in the press. Roche has been strategic enough to play it quiet, increasing the chances of it’s patent applications being decided in a more objective manner. Novartis has only excacerbated the politicization of this dispute—and given that most adjudicators are not hermetically sealed off from society, it is likely that a steady stream of anti Novartis headlines pouring out of leading newspapers will have their desired impact.

In short, the Novartis patent saga teaches us that pharmaceutical companies may not get very far in India by deploying aggressive bullying tactics. Rather, a sophisticated long-term strategy and a robust PR policy that appreciates the “politics” of patents and helps generate goodwill is likely to prove more fruitful.

Novartis is right to be concerned about the vagueness in section 3(d). Indeed, section 3(d), though noble in intent, and “innovative” in several respects, is very poorly drafted and leaves much to be desired. Probably in the run up to the legislation, and given the pressure of the Left Parties, speed was of essence and the precise contours of section 3(d) weren’t thought through carefully.

Amending section 3(d) by an Act of Parliament to iron out drafting errors/ inconsistencies may not be politically feasible. But some of the vagueness in this section can be cured by working out appropriate guidelines. And this is what Novartis ought to have focused on—rather than alienating itself from the government and the pubic by challenging a legislation that seeks to prevent ever-greening.

In particular, these guidelines ought to address the following issues:

1. What amounts to “efficacy”? Is it limited to therapeutic efficacy (as the Madras High Court seems to suggest), or does it include clinical efficacy and other advantages such as heat stability?
2. What amounts to a “significant difference in property with regard to efficacy”? Will a 30% increase in bio-availability do or does it have to be much more significant?

Dating back to 2003, the Gleevec patent dispute has taken up considerable time, energy and resources. Indeed, in the Chennai High Court alone—it near monopolized the attention of 2 judges, 9 parties, 15 counsels and several law firms—not to mention the several hundred commentators that rushed to air their views. It will be a pity if all this attention comes to naught—at the very least, one hopes that it generates more clarity on what the term “efficacy” means.

On a broader note, this saga offers very valuable lessons for patent strategy in India. It teaches us that pharmaceutical companies and patent lawyers representing them cannot remain obsessed with the technical nuances of patent law. Rather, a successful patent strategy will be one that works within the framework of an increasingly politicized patent regime to yield results that help generate more goodwill for the pharmaceutical company in question. In short, patent attorneys ought to think about some serious training in PR!! “

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

5 comments.

  1. AvatarShamnad Basheer

    Professor Adelman writes:

    Dear Shamnad:

    I am not sure that Roche will go anywhere with its quiet strategy. If it does, it probably will be because Novartis is making a lot of noise. I agree that 3(d) could be interpretated so as to totally compatible with TRIPS by rendering it meaningless which is the proper interpretation. If Novartis keeps up its pressure, after it is rejected by the biased appellate board, it will have a go in the Chennai High Court unless the appellate board to show it is unbiased approves of its patent. You have to remember that from Novartis’s point of view there should be no patent issue in India because Novartis should be able to rely on its genus patent, a patent which is undoubtedly valid.

    I look forward to seeing you either on the 11th or 17th.

    All the best,

    Marty

    Martin J. Adelman
    Theodore and James Pedas Family Professor of
    Intellectual Property and Technology Law;
    Co-Director of the Intellectual Property Law Program;
    Co-Director of the Dean Dinwoodey Center for Intellectual Property Studies;
    George Washington University Law School

    Reply
  2. AvatarShamnad Basheer

    Dear Marty,

    Thanks for the comments. The noise created by Novartis hasn’t helped anyone—much less Roche. Roche has gone on to acquire 4 patents, whereas Novartis is still stuck with its first case. In fact, Novartis recently withdrew a mailbox application covering its AIDS drug, Atazanavir. It seems pretty clear to me as to whose strategy is better.

    It’s likely that the Madras High Court (which recently stayed the IPAB proceeding) will soon rule that the IPAB appellate panel can move forward only if Chandrasekharan were recused and a new technical member brought in. In which case the fight will begin to turn on “merits” –does Novartis have a patentable polymorphic form or not? From whatever I’ve seen of the court documents, Novartis has a weak case. The facts of this case are quite similar to Pfizer vs Apotex —a case in which the CAFC ruled that Pfizer’s patent was “obvious”, since the particular salt form was one amongst a limited range of salt forms that a skilled person would have tried. And Pfizer’s showing of increased stability and hygroscopicity for this salt form wasn’t sufficient to qualify as an “unexpected property”.

    I’d be surprised if Novartis wins. But as I’ve been stating in most of my posts, personal views notwithstanding, we must let the case run its course. This is important so that we get a good critical mass of case law, that will then help contextualise section 3(d) and effectuate the laying down of appropriate guidelines.

    As you’ll appreciate, the broad genus patent by Novartis is a 1993 patent—a time that was prior to the commencement of TRIPS– when India was not obliged to grant product patents or to even put away such applications in a mailbox.

    I’ll make it on the 11th—so look forward to seeing you then.

    Warm wishes,

    Shamnad
    ps: I’m including these comments in the comments section of the post—and do hope that we can continue the discussion there.

    Reply
  3. AvatarShamnad Basheer

    Dr Gopakumar Nair (past president of IDMA) writes:

    Dear Shamnaad,
    I am sorry to clarify that it is not fair to say that Indian Patent Office, Especially, Chennai Patent Office is biased.
    Please see the report which I am quoting from patent circle.
    (documentary support is available in Patent Office Journal ).
    I Quote !
    Novartis received Indian Patent for Benflumetol derivatives

    Novartis has received an Indian Patent Number 203536 (the ‘536 patent) titled Benflumetol derivatives against its patent application numbered IN/PCT/2000/884/CHE via PCT national phase. The ‘536 patent is directed to compound of formula I claiming priority from Swiss Patent Application No. 1351/98 dated June 25, 1998. The ‘536 patent is a mail-box application filed under section 5(2) of the Patents Act, 1970 which was later deleted by the Patents (Amendment) Act, 2005. The application for the ‘536 patent entered Indian national phase via International Application No. PCT/EP1999/004355 filed June 23, 1999 and published as WO1999/067197 dated December 29, 1999. The ‘536 patent is Indian equivalent of the U.S. Patent No. 6,329,552.
    Unquote !
    This Patent is granted by Chennai Patent Office .

    Gopakumar Nair Associates
    Tel.:+91-22-28872058
    Telefax:+91-22-28850805
    URL:www.gnaipr.com

    Reply
  4. AvatarShamnad Basheer

    Dear Dr Nair,

    Thanks for your comments and for pointing me to a patent grant in favour of Novartis. I wasn’t aware of this grant. Are there any other mailbox grants to Novartis that you are aware of?

    I’m not sure as to whether you are addressing your comments to me or to Marty. Marty argues that the IPAB (and not the patent office) is biased (owing to Chandrasekharan’s presence) –and I agree with him that there is a potential for bias here.

    As for the patent office and the potential for bias, I think its fair to say that, given the increasing politicization of the dispute, Novartis’ chances for a more objective determination of its patent application are reduced somewhat. You will recall that an ex controller was fired over the grant of an EMR to Glivec. You’ll also appreciate that the patent office decision rejecting Novartis’ patent application is very poorly reasoned (in fact, at some places, the Asst Controller doesn’t give any reasons for his conclusions at all). Thus for e.g., he states that the beta crytalline form does not demonstrate increased efficacy under section 3(d) (despite evidence furnished by Novartis towards this end), without really explaining as to why he thought so. In particular, he doesn’t bother to address the below issues which really go to the heart of this matter:

    1. does bioavailability amount to “efficacy”?
    2. does a 30% increase in bioavailability constitute a “significant” enhancement in efficacy?
    3. against what “substance” should the beta crystalline form be compared?

    Of course, it’s a toss up between concluding that he may have been somewhat influenced by news reports claiming that this patent will kill people (recall the various headlines when Glivec was granted an EMR and the price shot up by more than 10 times) or that he was just sloppy at his job.

    Warm wishes,

    Shamnad

    Reply

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