In Novartis patent case, India has a BIT of cover

The Indian Patent Office (IPO) has revoked the patent of Novartis for its blockbuster cardiac drug, Vymada, based on a lack of novelty and inventive steps as required under the Patent Act.

- 

This revocation will pave the way for the entry of cheaper generics 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 needs to understand the ramifications of this action under international law, namely, bilateral investment treaties (BITs) that empower foreign investors to bring claims against host States before an investor-state dispute settlement (ISDS) tribunal. This is relevant because Novartis is a Swiss company whose investment in India is protected under the India-Switzerland BIT.

Moreover, globally, there are quite a few cases, such as Eli Lily v Canada and Philip Morris v Australia, where 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 recognised as foreign investment worthy of protection under the BIT. An ISDS tribunal will have jurisdiction to hear a case brought by a foreign investor if it arises directly out of an investment. Thus, the key question is whether Novartis can challenge the revocation of its patent before an ISDS tribunal.