Is the Indian law hurting innovation?

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SummaryThe landmark judgment of the two-judge bench of the Supreme Court of India striking down the application of the Swiss firm Novartis for the grant of patent on an anti-cancer medicine, the beta crystalline form of Imatinib Mesylate is significant for it raises several questions about the functioning of the patent system.

The Indian law doesnít give patents unless there is a significant additional invention, but if this prevents pharma firms from spending on R&D, this affects the welfare of patientsóexcessive other controls, like on prices, add to the problem

Biswajit Dhar

The landmark judgment of the two-judge bench of the Supreme Court of India striking down the application of the Swiss firm Novartis for the grant of patent on an anti-cancer medicine, the beta crystalline form of Imatinib Mesylate (sold under the brand name Glivec) is significant for it raises several questions about the functioning of the patent system. The judges gave their ruling against Novartis since, in their view, the product in question was not an invention as elaborated in section 3(d) of the Indian Patents Act. This section identifies a number of actions that may not qualify as inventions. These include: (1) mere discovery of a new form of a known substance not resulting in the enhancement of the known efficacy of the substance; (2) mere discovery of any new property; (3) new use for a known substance; and (4) 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.

By ruling that the beta crystalline form of Imatinib Mesylate does not qualify as an invention as elaborated in section 3(d), the judges have strengthened the foundations of the patent system, which was introduced to provide statutory monopoly to the inventors in order to reward them for the intellectual contribution they were making to enhance public welfare.

The justification for the patent system lay in the fact that unless the inventors were protected from copycats, they would have no incentive to make further investments to produce useful products for the society. The monopoly was granted so that the inventors can use their exclusive marketing rights to recoup the investments made in producing the invention. Over time, the period of monopoly was increased as inventors (mostly large global conglomerates in the case of pharmaceuticals) claimed that their R&D expenditure had sky-rocketed. The claim of these pharmaceutical giants has been that new drug molecules require a billion dollars of investment and this claim became the basis for extending the patent term to 20 years, counting from the date of application for the grant of patent.

Importantly, the 20-year patent term was introduced in the agreement on Trade Related Aspects of Intellectual

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