The Novartis Group has won an important ruling in its legal dispute with GlaxoSmithKline (GSK) concerning AmoxC (amoxicillin/clavulanic acid), the Group's generic version of GSK's top-selling antibiotic Augmentin. GSK had sought an order to prevent Novartis affiliates from importing and selling AmoxC in the US, claiming that the affiliates used a proprietary GSK strain of bacteria to manufacture the generic product. An Administrative Law Judge of the US International Trade Commission (ITC) dismissed GSK's claims and decided that the strain is not entitled to trade secret protection. He stated that the strain lost any trade secrecy protection that it may have had when GSK entered into a prior settlement agreement with Novartis' subsidiary Biochemie.

Christian Seiwald, worldwide Head of Novartis' Generics Business Unit commented: "We are very pleased with the judge's ruling, which supports our affiliate in continuing to provide high quality generic alternatives to patients in the US. It is our firm conviction that we have acted correctly and ethically throughout."

In May 2002, in a suit brought by Novartis' subsidiary Geneva Pharmaceuticals against GSK, the US District Court for the Eastern District of Virginia rendered a decision that invalidated GSK's remaining patents covering Augmentin. Following that ruling, Geneva was the first to launch a generic version of in the US, the world's biggest pharmaceutical market, in July 2002.

GSK has appealed both the decision of the District Court and that of the ITC Administrative Law Judge.