‘AUDI ALTERAM PARTEM’, YES, BUT NOT FOR THE OPPONENT IN THE PATENT EXAMINATION.  NOVARTIS AG v. NATCO PHARMA & ANR

NOVARTIS AG v. NATCO PHARMA & ANR 

INTRODUCTION

The legal maxim “Audi Alteram Partem,” meaning “hear the other side,” is a fundamental principle of natural justice, ensuring fairness and equity in legal proceedings. This principle holds particular significance in patent law, where parties must be given the opportunity to present their case before decisions are made. Novartis AG v. Natco Pharma & Anr, a landmark case in India, exemplifies the application of this principle in patent examination and the implications it holds for intellectual property rights.

Patent rights are defined as “exclusive-limited period monopoly rights,” which give the owner of the patent the ability to profit from their creation while preventing others from using it for profit. The timer is set to begin on the day that an applicant files their patent application with the relevant patent office and runs for twenty (20) years after that date. Only once the patent application is approved by the patent office will the applicant for the invention be referred to as a “patentee”. To determine whether an invention is patentable, each patent application is scrutinized or examined in accordance with legal requirements. Third parties may oppose a patent application before or after it is granted, according to the law. Nonetheless, there has been discussion on the Opponent's level of involvement in the pre-grant opposition process. Pre-grant oppositions were viewed as a helpful tool for the Patent Office's examination; nevertheless, it was unclear how the two processes—the Office's examination and the pre-grant opposition proceedings—were to move forward—whether in parallel or in unison.

The Delhi High Court (DHC) Division Bench (Two-Judge Bench) rendered a decision on January 9, 2024, in the case of Novartis AG v. Natco Pharma & Anr. (2024: DHC: 04-DD). The Court determined that the examination process fulfills a major and comprehensive function by evaluating the patent application in detail, confirming that it conforms to the legal requirements for patent approval, and enabling a comprehensive and impartial assessment of the application by the Controller and the examiner. Thus, it is imperative that the opposition and examination processes be kept separate from one another. Combining these two separate processes would make the system cumbersome and ineffective overall, in addition to having an adverse effect on the expedited consideration of legislation.

BACKGROUND

The case revolves around Novartis AG, a multinational pharmaceutical company, and Natco Pharma, an Indian generic drug manufacturer. Novartis sought to patent the beta-crystalline form of imatinib mesylate, a salt form of the anti-cancer drug imatinib, marketed as Gleevec/Glivec. The patent application was initially rejected by the Indian Patent Office (IPO) on grounds of lack of novelty and inventive steps.

LEGAL PROCEEDING

Novartis appealed the decision, leading to protracted legal battles, culminating in the Supreme Court of India's judgment in 2013. The central issue revolved around Section 3(d) of the Indian Patents Act, which imposes additional patentability criteria for new forms of known substances. Natco Pharma challenged Novartis's patent application, arguing that the beta-crystalline form of imatinib mesylate failed to meet the criteria under Section 3(d) as it did not demonstrate enhanced efficacy.

AUDI ALTERAM PARTEM PRINCIPLE

Throughout the legal process, the principle of audi alteram partem remained pivotal. Both parties were given ample opportunity to present their arguments, ensuring a fair and transparent adjudication process. The courts meticulously examined the evidence and legal precedents, balancing the interests of the patent holder and the public.

IMPLICATIONS

The Novartis case set significant precedents in Indian patent law, particularly regarding the interpretation of Section 3(d) and the application of the audi alteram partem principle. It underscored the importance of considering public health concerns alongside the protection of intellectual property rights. The judgment reaffirmed India's commitment to promoting access to affordable medicines, especially in the context of life-saving drugs.

GLOBAL IMPACT

The implications of the Novartis case extended beyond India, sparking debates on patentability criteria and access to medicines worldwide. It highlighted the tension between incentivizing innovation through patent protection and ensuring access to essential medicines, particularly in developing countries. The case prompted discussions on the need for a balanced approach to intellectual property rights, taking into account public health imperatives.

CONCLUSION

In conclusion, the principle of “Audi Alteram Partem,” or “hear the other side,” is fundamental to fair and just decision-making processes, including patent examinations. However, the case of Novartis AG v. Natco Pharma & Anr highlights the complexity and nuances involved in applying this principle within the context of patent disputes. While it is essential to provide the patent applicant with a fair opportunity to present their case and address any objections raised by the examiner, it is equally important to ensure that the interests of all parties involved, including potential competitors and the public interest, are adequately considered.

In this case, the court's decision to uphold the patent examiner's rejection of Novartis AG's patent application despite the applicant's arguments and evidence underscores the significance of robust and impartial patent examination procedures. By carefully weighing the arguments and evidence presented by both parties, the patent examiner was able to make an informed decision that ultimately served the broader goals of promoting innovation, competition, and access to affordable medicines.

Furthermore, the outcome of this case emphasizes the importance of transparency and accountability in the patent examination process. While patent applicants have the right to be heard and to challenge adverse decisions, it is essential to ensure that such challenges do not unduly delay or obstruct the progress of legitimate patent applications or undermine the integrity of the patent system as a whole.

In summary, while the principle of “Audi Alteram Partem” remains a cornerstone of administrative law and procedural fairness, its application in the context of patent examination requires careful balancing of competing interests and objectives. By upholding the principle of fairness and impartiality while also considering the broader public interest, patent authorities can ensure that the patent system continues to fulfill its crucial role in fostering innovation and promoting the common good.