Landmark Supreme Court Judgment: Novartis AG v. Union of India

The Supreme Court’s decision in Novartis AG v. Union of India is one of the most significant judgments in India’s Intellectual Property Law regime. The ruling was a major victory for public health, ensuring access to affordable medicines while preventing pharmaceutical companies from engaging in “evergreening” of patents—a practice used to extend patent monopolies by making minor modifications to existing drugs.

This judgment reinforced the availability and affordability of life-saving drugs in India. Simultaneously, it provided clarity on the scope and interpretation of Section 3(d) of the Indian Patents (Amendments) Act, 2005, which sets stringent standards for pharmaceutical patents.

In this case, the Supreme Court denied Novartis AG a patent for its drug, ruling that the drug did not qualify as an invention under Indian patent law. Despite a narrow ruling, the decision sparked global discussions on balancing intellectual property rights with public health concerns and highlighted India’s approach to interpreting international law in alignment with domestic needs.

The case was particularly crucial because Glivec, the drug in question, does not cure cancer but only slows its progression, requiring patients to take it for life. The ruling ensured that the drug remained affordable for cancer patients who depend on continuous access to treatment.

Case Background & Facts

• In 1997, Novartis, a Swiss pharmaceutical company, filed a patent application for Glivec, an anti-cancer drug used to treat Chronic Myeloid Leukemia (CML) and gastrointestinal stromal tumors (GIST).
• Novartis sought a patent for the beta-crystalline form of the drug’s active ingredient, Imatinib Mesylate. The drug had already been patented in over 35 countries.
• At that time, India did not grant patents for pharmaceutical products. However, in 2005, India amended its patent laws in compliance with TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, allowing pharmaceutical product patents.
• In 2006, the Madras Patent Office rejected Novartis’s patent application, citing Section 3(d) of the Indian Patents (Amendments) Act, 2005, which requires a new form of a known substance to demonstrate “enhanced efficacy” to qualify for a patent.

Key Developments:

1. Opposition from Generic Manufacturers & NGOs – The patent application faced strong opposition from generic drug manufacturers and public health advocacy groups, arguing that the drug did not show significant improvement over its pre-existing form.
2. Legal Challenge in Madras High Court – In May 2006, Novartis challenged Section 3(d) before the Madras High Court, arguing that it violated Article 14 (Right to Equality) of the Constitution and was inconsistent with the TRIPS Agreement.
3. Madras High Court Verdict – The court upheld Section 3(d), ruling that its purpose was to ensure affordable access to essential medicines and that it was not unconstitutional. However, it held that it had no jurisdiction to determine whether the provision violated TRIPS.
4. Appeal Before the Intellectual Property Appellate Board (IPAB) – Novartis then appealed to IPAB, which found that the drug met the novelty and inventive step criteria but failed under Section 3(d) due to lack of “enhanced efficacy.”
5. Supreme Court Appeal – Novartis challenged IPAB’s decision before the Supreme Court of India through a Special Leave Petition (SLP).

Key Legal Issues Before the Supreme Court

1. Was Novartis’s drug eligible for a patent under Indian law?
2. Did the patent application constitute “evergreening”?

Arguments by the Parties

Novartis (Appellant)

• Argued that the beta-crystalline form of Imatinib Mesylate should be compared to Imatinib (the free base), not its previously known Imatinib Mesylate form.
• Claimed that the new form had increased bioavailability, resulting in “enhanced therapeutic efficacy.”
• Stated that the new form had better storage, processing, and thermodynamic stability, making it superior.

Generic Drug Manufacturers & Public Health Advocates (Respondents)

• Argued that the correct comparison was with Imatinib Mesylate, making it difficult for Novartis to prove improved efficacy.
• Contended that Novartis was attempting to extend its monopoly over the drug by making minor modifications, a strategy known as “evergreening.”
• Asserted that the drug’s physiological properties (better stability and flow) did not equate to enhanced therapeutic efficacy, as required by Section 3(d).

Supreme Court Judgment & Key Findings

The Supreme Court dismissed Novartis’s appeal and reaffirmed that for a new product to qualify as an “invention” under the Patents Act, it must:

✅ Be new (novelty)
✅ Involve an inventive step
✅ Show technical advancement or economic significance
✅ Be non-obvious to a skilled person
✅ Be capable of industrial application

Additionally, the court emphasized that a patent cannot be granted if the product falls under the exclusions listed in Sections 3 & 4 of the Act.

Key Observations of the Court:

• “Efficacy” under Section 3(d) means “therapeutic efficacy.” The ability to improve storage, stability, or flow properties is not sufficient.
• Novartis failed to demonstrate therapeutic efficacy through sufficient data and research.
• Evergreening is not permitted under Indian patent law. A mere modification of an existing product without significant enhancement in efficacy cannot qualify for a new patent.
• Incremental pharmaceutical innovations are not automatically barred but must prove enhanced efficacy on a case-by-case basis.

Thus, the Supreme Court rejected Novartis’s patent claim, affirming the public interest in affordable medicine while ensuring India’s patent system does not allow unjustified monopolies.

Impact & Significance of the Judgment

✅ Ensured Affordable Access to Life-Saving Drugs – The ruling allowed generic manufacturers to continue selling affordable versions of Glivec, benefitting thousands of cancer patients.
✅ Set a Global Precedent for Patent Law & Public Health – The case reinforced that patent protection must balance innovation with accessibility, influencing global debates on pharmaceutical patents.
✅ Clarified Section 3(d) of the Patents Act – The judgment provided clear guidance on how pharmaceutical efficacy should be interpreted.
✅ Limited Evergreening Tactics – Pharmaceutical companies cannot extend patents by making insignificant modifications to existing drugs.
✅ Boosted India’s Generic Drug Industry – The ruling strengthened India’s role as the “pharmacy of the developing world.”

The Supreme Court’s decision in Novartis AG v. Union of India was a landmark ruling in Intellectual Property Law and public health policy. While it protected patients’ access to affordable medicines, it also safeguarded genuine pharmaceutical innovation by upholding the patentability of truly novel and effective drugs.

Contrary to initial fears, the ruling did not discourage pharmaceutical R&D investment but rather ensured that patents serve their true purpose: fostering genuine innovation rather than prolonging monopolies.

By reaffirming India’s stance on public health and intellectual property rights, this case remains a defining precedent in global patent jurisprudence.