Corporate Apr 2, 2013
Yesterday's Supreme Court judgment in the case of Novartis' anti-cancer drug Glivec has given rise to calls for stronger patent protection in India. The multinational lobby is yelling blue murder, and Novartis India's chief Ranjit Shahani has muttered darkly about how "the intellectual property ecosystem in India is not very encouraging."
Shahani may be right in general about adequate protection for intellectual property, but he is wrong in this specific case. For what the Supreme Court has rejected is not the idea of patenting genuine inventions, but the spurious efforts of companies to extend their monopolies by selling old wine in new medicine bottles.
The key to any kind of protection for intellectual property ought to be two words: "new" and "inventive," says Tim Worstall in Forbes.com Small changes do not count as real innovations that need patent protection.
Before we get to Novartis, let's go to that Mecca of patent litigation - America - and see what is going on.
Last year, two months after Apple won a $1.05 billion patent suit against Samsung for alleged infringements, the US Patent and Trademark Office (USPTO) specifically invalidated 20 claims of Apple's patent for "rubberbanding" (US Patent No 7469381), which was one of those which Samsung was found to have infringed.
Rubberbanding refers to a feature of Apple's iOS user interface which lets a user know that he has reached the bottom of a page by making the page rebound.
Following the invalidation of the "rubberbanding" patent, Judge Lucy Koh, who awarded Apple damages last August, reduced the payment to $450.5 million and called for a new trial to recalculate the damages.
The question is: why did the USPTO revoke the patent it had itself awarded to Apple? Don Reisinger, writing in CNet, says the patent office, on a review, decided that "Apple's filings are 'anticipated.... Other claims are 'obvious.'" The meaning of the terms "anticipated" and "obvious" is that the company's technology was a "logical step in improvement, and not a true invention that supersedes previous technologies."
In other ways, rubberbanding is not particularly new or inventive.
Now, let's get to Novartis' Glivec patent. In this case, what the Supreme Court ruled against was not patents in general, but that it was not a new invention, but an extension of an older idea. The operative part of the judgment said: "We firmly reject Novartis' case that Imatinib Mesylate (the chemical name for Glivec) is a new product and the outcome of an invention... We hold and find that Imatinib Mesylate is a known substance. Imatinib Mesylate does not qualify the test of 'invention' as laid down in Section 2(1)(j) and Section 2(1)(ja) of the Patents Act."
Novartis claimed that Imatinib Mesvlate offered higher therapeutic efficiency by increasing the drug's "bioavailability" - the proportion of a drug that the body is actually able to absorb.
The bench had this to say: "Whether or not an increase in bioavailability leads to an enhancement of therapeutic efficacy in any given case must be specifically claimed and established by research data. In this case, there is absolutely nothing on this score apart from the adroit submissions of the counsel. No material has been offered to indicate that the beta crystalline form of Imatinib Mesylate will produce an enhanced or superior efficacy (therapeutic) on molecular basis than what could be achieved with Imatinib free base...".
Put another way, Novartis was unable to convince the judges that Glivec was any better than its predecessors. The benefits were not obvious.
The Apple and Novartis cases emphasise that patent protection is more often than not used to extend the lives of old products or by merely tweaking existing ones.
This was much the conclusion of two researchers at the Federal Reserve Bank of St Louis, Michele Boldrin and David K Levine, who said in a working paper last year that strong patent laws were not an unmixed blessing.
They wrote: "A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government-operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely..." (Italics ours).
The Supreme Court has done the right thing by rejecting the Novartis case. It will force companies to focus on genuine innovation and newness, and not mere line extensions of old inventions.
More From R Jagannathan.