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How Innovative is Innovative Enough? Reflections on the Interpretation of Article 27 TRIPS from Novartis v. Union of India

Alessandra Arcuri

Erasmus University Rotterdam (EUR) - Erasmus School of Law; European University Institute

Rosa Castro

European University Institute; University of Bologna

July 14, 2008

Society of International Economic Law (SIEL) Inaugural Conference 2008 Paper

In 2006 a major lawsuit was initiated by Novartis AG against the Union of India. Novartis petitioned the High Court of Madras to declare Section 3(d) of the Indian Patents Act, as amended in 2005, to be non-compliant with the TRIPS Agreement and/or to be unconstitutional. Section 3 of the Patents Act identifies the cases of inventions which are not patentable and its letter (d), as amended in 2005, lists as such 'the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the 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.' On August 6, 2007 the High Court of Madras reached a verdict rejecting all the petitioner's requests. In relation to the non-compliance with the TRIPS Agreement, the Court did not enter into the merits of the question as it held to have no jurisdiction on this issue.

The present analysis begins where the verdict of the High Court of Madras ends; while the judgment invites reflection on a number of interesting issues related to the role of WTO law at national level, this paper focuses only on the substantive question (left almost entirely unaddressed by the Indian Court) about the compatibility between Section 3(d) of the Indian Patent Act and the TRIPS Agreement. The core of the question relates to the interpretation of Article 27 TRIPS, and in particular to its paragraph 1 where the criteria for patentability are set (i.e. an invention should be non-obvious, novel and useful); clearly, a narrow or a broad interpretation of these criteria is likely to have a significant impact on patents regimes worldwide. This paper builds an interdisciplinary theoretical framework to answer the compatibility question raised by Novartis AG; it does so by combing a purely legal analysis, based on the general interpretative canons used by the WTO Appellate Body to solve disputes, with an economic analysis that aims at showing the socio-economic impact of different interpretations of the above mentioned criteria. Finally, the paper shows the extent to which this theoretical framework could be applied should such a case ever be brought before the WTO DSB.

Number of Pages in PDF File: 36

Keywords: WTO, TRIPS Agreement, Nonobviousness, Patentability standards, India, Novartis AG, Law and Economics, Intellectual Property Rights

JEL Classification: F13, F53, K11, K33, O34

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Date posted: July 14, 2008  

Suggested Citation

Arcuri, Alessandra and Castro, Rosa, How Innovative is Innovative Enough? Reflections on the Interpretation of Article 27 TRIPS from Novartis v. Union of India (July 14, 2008). Society of International Economic Law (SIEL) Inaugural Conference 2008 Paper. Available at SSRN: http://ssrn.com/abstract=1159821 or http://dx.doi.org/10.2139/ssrn.1159821

Contact Information

Alessandra Arcuri (Contact Author)
Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )
Burgemeester Oudlaan 50
3000 DR Rotterdam
+31 10 408 1537 (Phone)
European University Institute ( email )
Villa Schifanoia
133 via Bocaccio
Firenze (Florence), 50014
Rosa Julieta Castro Bernieri
European University Institute ( email )
Via dei Roccettini 9
via delle Fontanelle 10
50016 San Domenico di Fiesole, Florence 50014
University of Bologna ( email )
Piazza Scaravilli 2
Bologna, 40100
HOME PAGE: http://edle.economia.unibo.it/st3.html
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