Indian court rejects Novartis patent challenge

(Adds details, background)

CHENNAI, India, Aug 6 (Reuters) - An Indian court rejected on Monday a challenge by Swiss drug firm Novartis (NOVN.VX) to Indian law that denied patents for minor improvements to known drugs.

The court in the southern city of Chennai rejected the challenge saying it had no jurisdiction on whether Indian patent laws complied with intellectual property rules set by the WTO, as Novartis had questioned.

A Novartis spokeswoman said the firm would make a statement soon.

Novartis has said that the Indian patent system stifles innovation. Critics of Novartis say changes to the law would affect the supply of affordable anti-AIDS drugs from India, one of the biggest makers of generic drugs. Novartis had gone to the Madras High Court in Chennai against a law that blocks the patenting of minor improvements in known molecules.

The Swiss pharmaceutical firm argues that a tightening of intellectual property laws would increase investment for developing more drugs.

India is a key source of cheap generic medicines, and advocacy groups worry that millions of poor people could lose access to key drugs if Novartis succeeds in its challenge.

Indian Health Minister Anbumani Ramadoss said in April that the government was "very concerned" that the challenge by Novartis could restrict the global supply of cheap anti-AIDS drugs.

India is home to the world's third largest population living with HIV after South Africa and Nigeria, with an estimated 3.5 million infected people.

(Additional reporting by Jonathan Allen in New Delhi)

((Reporting by S. Murari, writing by Y.P. Rajesh; Reuters Messaging: jonathan.allen.reuters.com@reuters.net; +91-11-4178-1000)) Keywords: INDIA NOVARTIS/

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