A bench of justices Aftab Alam and Ranjana Prakash Desai dismissed the claim of the Swiss firm for getting exclusive rights for manufacturing the cancer drug on the ground that a new substance has been used in the medicine.
The judgement, which was keenly watched by pharma companies across the world, will clear hurdles coming in the way for the manufacture of generic drugs in India for cancer patients.
While a one-month dose of Glivec costs around Rs 1.2 lakh generic drugs, manufactured by Indian companies, for the same period are priced at Rs 8,000.
Advocate Pratibha Singh, appearing for Indian drug firms Ranbaxy and Cipla which had opposed Novartis' plea, said that the judgement is a victory for Indian companies as they can now manufacture cheaper drugs so long as there is no patent over a medicine.
"Patents will now be granted only for genuine inventions and not on repetitive inventions. The Supreme Court said there was no new invention in the Novartis' drug," she said.
She also said there should be no fear that foreign firms would be affected with today's verdict since as long as they have genuine inventions, patents will be given to them.
In its judgement, the apex court also held that 'imatinib mesylate' used in Glivec is a known substance and Novartis can't claim patent over the drug for using this chemical.
Novartis had approached the apex court in 2009 against the order of Chennai-based Intellectual Property Appellate Board (IPAB), which had rejected its claim for patent.
The multinational company (MNC) had applied for patent in 2006.
Novartis' claim was opposed by Indian pharma companies, which are manufacturing generic drugs, as well as by health aid activists in the apex court.
They had claimed that the MNC is not entitled for patent and it is indulging in "ever-greening" of patent by simply changing the composition of the ingredients of the drug.
Ever-greening of patent right is a strategy allegedly adopted by the innovators having patent rights over products to renew them by bringing in some minor changes such as adding new mixtures or formulations.
It is done when their patent is about to expire. A patent on the new form would have given Novartis a 20-year monopoly on the drug.
Earlier, the Comptroller General of Patent and Design had denied patent to Glivec on several grounds including its alleged failure to meet stipulations under sections 3(d) and 3(b) of the Indian Patent Law.
Section 3(d) restricts patents for already known drugs unless the new claims are superior in terms of efficacy while Section 3(b) bars patents for products that are against public interest and do not demonstrate enhanced efficacy over existing products.
During the arguments earlier, Novartis had tried to dispel the impression that its drug would be beyond reach of poor cancer patients due to its high cost.
"The purpose is not to make money from the poor. This is not the purpose, but am I not entitled for patent for our drug? We are fighting the case on principle," senior advocate Gopal Subramanium, appearing for the company, had said.
He had submitted that there should be no cause of concern that the poor would not get treatment and had claimed that 85 per cent of such patients are treated free under its scheme.
Advocate Anand Grover, who appeared for the social organisation Indian Cancer Patients Aid Association, said the court while rejecting the petition of Novartis has held that the drug is not novel.
"The court has held that the drug is not novel, not inventive and does not satisfy the requirements of section 3(d) (of the Indian Patent Law).
"Section 3(d) is important as it was brought in specially under the new patent law and does not allow new form of known substances to be patented unless they are significantly more efficacious," he said.