An Indian court on Monday rejected a challenge to the country's patent laws by Swiss pharmaceutical giant Novartis, a decision lauded by medical aid groups as a victory for millions of poor patients in developing countries.

Novartis said the court ruling - over the definition of a new or improved drug - was a blow to the idea of intellectual property rights and would have long-term negative effects on research into new drugs. However, the company said it was unlikely to appeal the ruling.

Novartis had challenged India's patent laws, which disallowed a patent application for what it says is a new version of its leukemia drug Gleevec, known in Europe and India as Glivec.

India's patent laws, which came into effect Jan. 1, 2005, allow patents for products that represent new inventions after 1995 - the year India joined the World Trade Organization - or for an updated drug that shows greater efficacy.

Novartis insists that its improved Gleevec drug is more easily absorbed by the body. But Indian drug companies and aid groups say Gleevec is a new form of an old drug invented before 1995, which is now made generically in India for a fraction of the cost.

"This is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India," said Tido von Schoen-Angerer, director of the Médecins Sans Frontières, or Doctors Without Borders, Campaign for Access to Essential Medicines.

An Indian court on Monday rejected a challenge to the country's patent laws by Swiss pharmaceutical giant Novartis, a decision lauded by medical aid groups as a victory for millions of poor patients in developing countries.

Novartis said the court ruling - over the definition of a new or improved drug - was a blow to the idea of intellectual property rights and would have long-term negative effects on research into new drugs. However, the company said it was unlikely to appeal the ruling.

Novartis had challenged India's patent laws, which disallowed a patent application for what it says is a new version of its leukemia drug Gleevec, known in Europe and India as Glivec.

India's patent laws, which came into effect Jan. 1, 2005, allow patents for products that represent new inventions after 1995 - the year India joined the World Trade Organization - or for an updated drug that shows greater efficacy.

Novartis insists that its improved Gleevec drug is more easily absorbed by the body. But Indian drug companies and aid groups say Gleevec is a new form of an old drug invented before 1995, which is now made generically in India for a fraction of the cost.

"This is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India," said Tido von Schoen-Angerer, director of the Médecins Sans Frontières, or Doctors Without Borders, Campaign for Access to Essential Medicines.

Aid groups feared a Novartis victory would set a precedent for other pharmaceutical companies seeking patent protection for essential medicines - including AIDS drugs - currently made cheaply in several countries.

India major supplier of generic drugs

Indian companies also make a host of other generic drugs, available at a fraction of the price of branded medicine - and used throughout the developing world, where the need for affordable medicines is high.

Doctors Without Borders said 84 per cent of the drugs it uses to treat AIDS were from India. Over 420,000 people worldwide signed a petition requesting Novartis drop the case.

Novartis said it regretted the decision of the court in the southern Indian city of Chennai. The court rejected the challenge to the patent laws but has not yet ruled on the specific case of Gleevec.

"We disagree with this ruling, however we likely will not appeal to the Supreme Court," said Ranjit Shahani, the managing director of Novartis India Limited.

"It is clear there are inadequacies in Indian patent law that will have negative consequences for patients and public health in India," said Paul Herrling, Novartis's head of corporate research.

"Medical progress occurs through incremental innovation. If Indian patent law does not recognize these important advances, patients will be denied new and better medicines."

Several Indian pharmaceutical companies make generic copies of Gleevec, but sell it for a tenth of the $2,600 US charged by the Swiss company for one month's dosage. However, Novartis said it provides Gleevec free of charge to 99 per cent of patients prescribed the drug in India under its international assistance program.