Economist Arvind Subramanian comments on the Indian Supreme Court's Novartis ruling:
Critics have suggested that India is a deviant for being the only country where Novartis’ claim has been rejected. Left out is the fact that even in the United States, the Novartis application—which was really for a successor version of Glivec—was in fact first rejected by the patent office, only for a higher authority to overturn the initial ruling. The Indian verdict, like that of the US patent office, may well be more within the range of reasonable interpretations of what constitutes patentability than has been asserted by critics.
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Other developing countries, such as Brazil, Thailand, and even China, could be emboldened by the Indian example and decide to dilute their own patent protection regimes. Even more consequential could be the impact on advanced economy patent regimes.
The US patent system has come in for intense scrutiny for its patent proliferation (including frivolous patents), its increasing tendency to hinder competition rather than promote innovation, and especially for its capture by patent owners with deep pockets. (These are explained at length in an excellent recent paper in the Journal of Economic Perspectives by Professors Boldrin and Levine of the University of Washington, St. Louis, MO). A body of opinion argues vehemently that in fact the US patent system is broken and needs radical overhaul.
At such a time, the Indian Supreme Court ruling—as a new and independent voice—could add to the momentum for a fundamental reassessment. The ruling is appealing because it asks a question that was both naïve and salient. The judges wanted to know whether the Novartis patent is a ruse to prolong an existing monopoly beyond reasonable limits, a question that has wider resonance.
Is India undervaluing patents or is the rest of the world overvaluing them? That might be one of the more intriguing questions raised by the Supreme Court ruling.
I'm not expecting a "radical overhaul" of the U.S. patent system any time soon. But I do see a rising tide of criticism of existing IP protections. At the least, perhaps this might prompt some debate on these issues.
