Court Rejects Novartis' Patent Challenge, Dilutes India's Sovereignty

Earlier today (Aug 6, 2007), the Chennai High Court rejected Novartis' legal challenge to section 3(d) of the Indian Patent Act. Given the charged nature of the issue, the decision received near blanket coverage globally, and was covered by Reuters, Forbes, IHT as well as by NGOs such as SocialFunds, SciDev and KaiserNetwork. In rejecting Novartis' case, the court stated simply that it did not have jurisdiction over the issue.

Novartis is, of course disappointed. Its company's news release states that:

"We disagree with this ruling, however we likely will not appeal to the Supreme Court. We await the full decision to better understand the Court's position," said Ranjit Shahani, Vice-Chairman and Managing Director, Novartis India Limited.

It is interesting that Novartis has chosen not to appeal. Civil society organizations are calling this a 'victory for generics'. But the truth is not so glorious. Indeed, it is tragic that the Chennai High Court said that it did not have jurisdiction. Novartis' case argued that the Patent Act violated terms of the WTO's TRIPS agreement. Yet, what section 3(d) simply did was to take advantage of flexibilities provided by the Doha Declaration on Public Health, which allowed for a looser intellectual property regime than was originally enforced by TRIPS. By challenging section 3(d), Novartis challenged much of what had been gained by the Doha Declaration (see here for a more detailed analysis, and here for a prior report on the outcome).

The Chennai High Court has created two problems, due to its stand that it does not have jurisdiction.

First, this means that the legality of the IPA is still in limbo, and others may question its use of TRIPS flexibilities. The rejection itself is a short-term boon to public health proponents such as MSF. Yet, in the long-term, it leaves the IPA vulnerable to change.

Even more critically, the decision suggests that the appropriate jurisdiction lies with the WTO. If that position were accepted by the Supreme Court or the WTO, it would hand jurisdiction of an issue of critical national interest to a multilateral forum. Essentially, India's national laws would be beholden to a forum designed not for the dispensation of justice but for international negotiations and bargaining.

This is in sharp contrast to the US' approach, which has categorically and repeatedly refused to accept the jurisdiction of multilateral institutions on issues of national interest, including human rights and criminal law. If allowed to proliferate, this view is a serious long-term threat to India's ability to make use of TRIPS flexibilities - indeed any flexibilities in international law, without being threatened at the WTO.