The case is seen as setting a precedent for India's predominantly generic drug market and could potentially alter its role as the supplier of cheap medicines to the world.
"We are giving something new to the patients," Gopal Subramanium, a lawyer for Novartis, told the Supreme Court as he argued for patent protection for Glivec - used to treat chronic myeloid leukaemia and some gastrointestinal cancers.
India's $12 billion drug market is seen by Big Pharma as a huge opportunity, but major Western drugmakers are wary of the level of protection for intellectual property in a country where generic medicines account for more than 90 percent of sales.
Novartis took its case to the Supreme Court after Glivec was refused a patent on the grounds the drug was not a new molecule but an amended version of a known compound. Novartis has challenged this clause of the Indian Patents Act.
A patent would recognise Novartis' property rights, in a blow to generic drugmakers who supply medicines to 1.2 billion Indians and to poorer nations across the world, although generic forms of Glivec launched before 2005 would stay on the market.
A loss for Novartis in the case would not have a big financial impact, since India is never likely to account for more than a small fraction of Glivec's global sales, which totalled $4.7 billion last year. The real concern for the industry is that a rebuff would confirm India as a country where patents are exceptionally hard to secure.
Novartis says it needs certainty about the legal position if it is to invest in India over the long-term.
"The patent for Glivec is not really the issue here," Paul Herrling, head of the Novartis Institute for Tropical Diseases, told Reuters in August. "It is just an example of us wanting very clear legal clarity about what kind of innovation is patentable."
The case has added to the tensions between Big Pharma and India, following a decision by the patent office in March to strip Germany's Bayer AG of its exclusive right to sell another costly cancer drug, Nexavar. Bayer has challenged that decision.
Last week, the Delhi High Court ruled in favour of local drugmaker Cipla in a patent infringement case filed by Switzerland's Roche Holding AG over Cipla's cancer drug Erlocip.
Copyright Thomson Reuters 2012