In 2006, the firm was denied a patent for the cancer treatment, Glivec, on the grounds that the drug was not sufficiently innovative. The matter was referred to the High Court in Chennai, which on Monday dismissed the writ petition challenging the constitutionality of the government's decision to reject the patent application, and deferred to the World Trade Organization to resolve the question of whether the Indian authorities are in compliance with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement.

Commenting on the decision on Monday, Ranjit Shahani, Vice-Chairman and Managing Director, Novartis India Limited announced that:

"We disagree with this ruling, however we likely will not appeal to the Supreme Court. We await the full decision to better understand the Court's position."

He continued:

"Our actions advanced this essential debate in India; now local and international leaders in both industry and academia recognize the inadequacies of Section 3(d) and are raising serious concerns about the deficiencies of the Indian patent system."

Pointing to the fact that the WTO recently urged India to improve its intellectual property system, Novartis observed in a statement that:

"Unlike other WTO member countries, India has a unique provision in its patent law, Section 3(d). This provision excludes important developments in the form of incremental innovation, and ignores the importance of side effects, ultimately denying patients in India new and better medicines. "

"During the India Trade Policy Review in late May 2007, the WTO urged India to strengthen its intellectual property rights system. It commended India for taking steps to align its national standards with international requirements but added that "effective implementation of IPR-related legislation would be in the interest of India itself."

The statement continued:

"Still at issue is why a patent for Glivec - granted in nearly 40 countries, including Russia, Taiwan and China - was denied in India in 2006. The Glivec patent appeal will be decided separately by the newly-operational Intellectual Property Appellate Board (IPAB)."

"At present, Novartis is petitioning the High Court for a new technical member because the current technical member is the former Controller General of the Indian Patent Office, responsible for the original rejection of the Glivec patent."

However, the decision has been welcomed by the international medical humanitarian association, Medecins Sans Frontieres (Doctors Without Borders), which argued this week that a ruling in favour of the company would have drastically restricted the production of affordable medicines in India that are crucial for the treatment of diseases throughout the developing world.

"This is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India," announced Dr. Tido von Schoen-Angerer, Director of the MSF Campaign for Access to Essential Medicines.

"The Court's decision now makes Indian patents on the medicines that we desperately need less likely. We call upon multinational drug companies and wealthy countries to leave the Indian Patents Act alone and stop pushing for ever stricter patent regimes in developing countries."