The Indian Patent Office (IPO) has revised the patent of novartis for its blockbuster cardiac drug, vymada, based on a lacked of novelty and inventable steps as required under the patient the patient. This revocation will pay the way for the entry of cheaper generals into the market, Benefiting Patients. Novartis May Challenge this revocation in the delhi high court.
Besides the legality of this issue under the patents act, one also also needs to understand the Ramifications of this Action under International Law, Namely, Bilateral Investment Treaties (Bits) The Empolar Foratories Bring Claims Against Host States Before An Investor-State Dispute Settlement (ISDS) Tribunal. This is a relevant trust novartis is a swiss company with investment in India is protected under the India-SWITZERLAND bit.
Moreover, globally, there are quite a less cases, such as Eli lily v canada and Philip Morris v AustraliaWhere Foreign Investors have used bits to challenge the host state’s regulatory measures Affecting their Intellectual Patent Rights (IPRS). Foreign investors have been able to bring these claims since iprs are reconded as Foreign Investment Worthy of Protection Under the bit. An ISDs Tribunal will have jurisdiction to hear a case brough by a foreign investment if it arises directly out of an investment. Thus, the key question is whather novartis can challenge the revocation of its patent before an isds tribunal.
To answer this question, one will have to examine seveal faces. First and foremost, India unilaterally terminated its bit with switzerland in 2017. However, The India-SWITZERLAND BIT, DUE to the Sunset Clause, Remains Effective For A FURMIDE FURMED OR A A FURMED OC of its termination in Respect of Investments Made or Acquired Before The Termination. Accordingly, protection is available under the bit to swiss investment in India Till 2032. While novartis has been operating in India for a long time, the specific Patent Right THATET THATE TIGHT THAT THE GRANTED GRANTED GRANTED 2022, IE, After Five Years of the Treaty’s termination. If the meaning of foreign investment is restricted to the patent
However, an alternative, broader interpretation is plausible. As it was help in a case knows as CSOB v Slovakiaeven if a transaction, standing alone, does not qualify as an investment, the dispute would still be demed to arise out of an investment if that transaction forms an integral part of anoverAllke As an investment. In the novertis case, it is crucial to bear in mind that the patent application was filled in 2007. Thus, if the patent right is seen as an insparable part of novertis’s investment in Will have the jurisdiction to hear the case.
However, an isds tribunal having jurisdiction, if novartis challenges this patent revocation, is just one part of the story. The other equally relevant part is wheether an isds tribunal will find such a Violation of the Rights that Foreign Investors Enjoy Under the bit. There are two Substantive rights that Novartis Can Allege Have Been Breed: The Right to Fair and Equitable Treatment (FET) and the Right Against Exropering. ISDs Tribunals have reepeated help that the fet provision include the concept of legitimate expectations.
So, Cold Novartis has the legitimate expectation that its patent would not be revoke? The answer is a resounding no. No Foreign Investor Can have a legitimate expectation that a host state shall not act in accordance with its domestic law. The Indian Patent Act Allows for the revocation of a patent on post-grant opposition-a fact that novartis is full aware of. Thus, Patent Revocation does not violate the fet provision, unless it can be shown that the law was applied arbitrarily. What About Protection from Expropiation? Isds Tribunals have recurrently help that Establishing Unlawful Expripiation requires a high threshold of Substantiial Deprivation of Foreign Investment. Given the Exented Operation of Novartis in India and Its Diverse Product Portfolio, it is unlike that revocation of one patent would lead to a Substantial Deprivation of Its Investment. Moreover, in Eli lily v canadaWhere the Canadian Courts Had Invalidated The Patents Held by the Foreign Investor, The ISDS Tribunal, Giving Deference to Canadian Courts, Had Held that Such Invalidation did not Vioolate Canada’s.
This case demonstrates that states need not worry about isds claims if they act in a non-arbitrary and non-discriminatory manner. Nonetheless, a key takeaay is that the IP and other authorities dealing with the IPrs of Foreign Investors Should Internalise India’s’s International Law Obligations So that they have their decisions, etc. International scrutiny.
Prabhash Ranjan is Professor and Vice Dean, Jindal Global Law School. The views expressed are personal
