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Madras High Court dismisses Novartis’ petitions

CHENNAI: The Madras High Court on Monday dismissed two writ petitions filed by Novartis AG and Novartis India Limited challenging the constitutional validity of Section 3(d) of the Patent (Amendments) Act 2005.

(Through a separate statutory appeal, the company questioned the rejection of its application to patent the beta crystallite form of imatinib mesylate, also called Glivec, in the Intellectual Property Appellate Board).

Among other reasons, the company stated that the Section was not compatible to the agreement on Trade Related aspects of Intellectual Property Rights (TRIPS) and that it was vague, illogical and arbitrary.

It said the provision conferred “uncanalised” discretionary power on the patent controller, who would apply his own norms that might not be uniform, while deciding the efficacy of the substance submitted for patent.

Rejecting the contention, a Division Bench, comprising Justices R. Balasubramanian and Prabha Sridevan said: “The argument that the amended Section must be held to be bad in law since, for want of guidelines, it gives scope to the statutory authority to exercise its power arbitrarily, has to be necessarily rejected. We find that there are in-built materials in the amended Section and the Explanation itself, which would control/guide the discretion to be exercised by the statutory authority. In other words, the statutory authority would be definitely guided by the materials placed before it for arriving at a conclusion.”

If the statutory authority, in exercising his power, misdirects himself, abuses his power in an arbitrary manner and passes an order, then it could be corrected by the hierarchy of forums provided in the Act itself, in addition to the further relief available before the courts of law.

“When that is the position, then we have to necessarily state that the amended Section cannot be invalidated solely on the ground that there is a possibility of misusing the power,” the Judges said.

The Right to Equality enshrined in Article 14 of the Constitution could be invoked only when it was shown that in the exercise of a discretionary power there was a possibility of a real and substantial discrimination, the Bench said.

“It is not shown by senior counsel appearing for the petitioners (Novartis) before us that in the exercise of discretionary power by the Patent Controller, any of the petitioner’s fundamental rights are violated, namely, to carry on the trade or the petitioner stood singularly discriminated. We find that the amended Section by itself does not discriminate nor does it prohibit the trade being carried on,” it said.

International treaties and agreements were essentially in the nature of a contract, the Bench said, adding that the TRIPS Agreement provided for a comprehensive dispute settlement mechanism, which was binding on its member-States.

“We see no reason at all as to why the petitioner, which itself is a part of that member-State, should not be directed to have the dispute resolved under the dispute settlement mechanism…We see no reason at all as to why we must disregard it…”

Reiterating that there was no ambiguity or vagueness in the provision, the Judges said: “Senior counsel, except arguing that the amended Section must be struck down on the ground of ambiguity, arbitrariness, leading to exercise of uncanalised powers — with which we have not agreed at all — had not shown any other legal ground to invalidate the amended Section.”

Parliament expressed its object and purpose in general terms while enacting a statute and does not foresee the minute details that were likely to arise in the future and provide a solution. “On the other hand, they would be acting wiser if they make only general expressions, leaving it to the experts/statutory authorities and then courts, to understand the general expressions used in the statute in the context in which they are used in a case to case basis.”

The Judges said: “Using general expressions in a statute, leaving the court to understand its meaning, would not be a ground to declare a Section or an Act ultra vires the Constitution, is the law laid down by the Supreme Cour t. Interpretation of a statute must be to advance the object which the Act wants to achieve.”

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