The short precedential opinion in, Incyte Corp. v. Sun Pharm. Indus., Inc., published this morning, is by Chief Judge Moore, joined by Judges Prost and Hughes. The plaintiff owns a patent on a “deuterated versions of ruxolitinib,” a class of compounds used for treating diseases associated with autoimmune disorders. The defendant had received FDA approval for a deuterated ruxolitinib product used to treat alopecia areata (AA), and was set to launch it product under the brand name Leqselvi, when Incyte filed suit and successfully moved for a preliminary injunction. The plaintiff, however, does not yet sell a topical deuterated ruxolitinib product for the AA market. Its product is said to be “in the early stages of development” (p.4), and will not be ready for launch, “under its best-case scenario, until at least several years after [the patent in suit] expires” (p.5). Based on these facts, it was clear error for the district court to find irreparable harm necessary to sustain preliminary relief:
A patentee can be irreparably harmed by an alleged infringer’s improper “head start” and the loss of the “first mover advantage” because the alleged infringer can capture market share and secure a competitive lead. Bio-Rad Lab’ys, Inc. v. 10X Genomics Inc., 967 F.3d 1353, 1378 (Fed. Cir. 2020); John C. Jarosz, Jorge L. Contreras & Robert L. Vigil, Preliminary Injunctive Relief in Patent Cases: Repairing Irreparable Harm, 31 Tex. Intell. Prop. L.J. 63, 124–25 (2022) (“A first mover advantage can be thought of as a firm’s benefits from being the first to market a new product or service. . . . [L]oss of a first mover advantage [can include] possible harm related to the loss of ‘sticky’ customer relationships.”). This economic principle can apply in the medical context when patients are unlikely to switch treatments. See Natera, Inc. v. NeoGenomics Lab’ys, Inc., 106 F.4th 1369, 1379 (Fed. Cir. 2024) (noting that “continuity of care” for patients supports finding irreparable harm based on infringing competitor’s plan to enter the market). In this case, it is undisputed patients are unlikely to switch treatments for AA. . . .
. . . Incyte argued the head start would give Sun a longer lead time and diminish the value of Incyte’s topical deuterated ruxolitinib product currently in the early stages of development. . . . The district court agreed with Incyte’s head start theory for its finding of irreparable harm . . . . The district court explained that “but for Sun’s Leqselvi, Incyte’s ’335 patent would provide it with the ability to bring a [deuterated ruxolitinib] AA treatment first to market.” J.A. 41 (emphasis added). Accepting Incyte’s assertions regarding the development of its product, there is no question this is a clearly erroneous fact finding.
The facts are undisputed. Sun is prepared to launch. . . . The ’335 patent expires in December 2026. And Incyte will not launch its product, under its best-case scenario, until at least several years after its ’335 patent expires. . . . Because Incyte cannot enjoin Sun from launching after its ’335 patent expires, Sun’s multi-year head start is inevitable regardless of any injunction. . . .
It was clearly erroneous for the district court to find that Incyte would be first to market if its preliminary injunction were granted. At best, Incyte argues that, without the injunction, Sun will receive an additional two years on the market and cause Incyte irreparable harm due to its loss of market share from this extended head start. . . . Incyte fails to provide non-speculative evidence that it will be irreparably harmed by Sun’s launch under these circumstances where Sun’s multi-year head start is inevitable.
Incyte argues the district court independently found irreparable harm under its head start theory based on the diminished value to Incyte’s investment in developing its product. . . . The district court’s irreparable harm findings regarding investment-based harm hinged on the same mistake of fact that its head start finding was predicated on—that, absent an injunction, Incyte would be first to market (pp. 4-6).
This seems correct to me. Even if the patent turns out to be valid and infringed, once it expires next year Sun would be legally free to market its product, and therefore would inevitably have a head start over Incyte. True, with a preliminary injunction in place for some period of time, Sun’s head start would be somewhat shorter, but any claim that a longer head start resulting from Sun’s (assumed) interim infringement would cause Incyte irreparable harm seems quite speculative. (I wonder if it also might be relevant that the alleged harm wouldn’t occur until after the patent expires, unless we credit the alleged “diminished value to Incyte’s investment in developing its product.” Unlike some of their foreign counterparts, U.S. courts don’t award springboard injunctions in patent cases, see Spine Sols., Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1320 (Fed. Cir. 2010)—though perhaps that wouldn’t preclude them from entering a preliminary injunction enforceable only during the patent term, in order to prevent non-speculative losses that would occur after the patent term. Or would those harms be non-cognizable?) The opinion doesn’t say what Incyte’s other arguments are, and I haven’t independently researched the record; but the only one that immediately comes to my mind is the possibility that the trial court might award a reasonable royalty, for the time period prior to judgment or expiration (whichever comes first), that is undercompensatory, and that too seems unduly speculative. As Contreras, Jarosz and Vigil point out in the article the court cites, because such reasoning would always lead to a finding of irreparable harm, the plaintiff should be required to demonstrate something more specific.
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