For the second day in a row, the US Court of Appeals for the Federal Circuit vacated what has become, in the so-called “eBay” era, an increasingly rare patent injunction. Today’s precedential ruling marks a win for Sun Pharmaceuticals, whose “extended” head start in the market for treating alopecia areata is “inevitable” given the “best-case scenario” of Incyte bringing to market its own autoimmune disorder drug and expected December 2026 patent expiration, the panel said.
In a precedential decision, and for the second time in as many days, the court tasked with resolving all patent appeals in the US vacated a patent injunction.According to the US Circuit Court of Appeals for the Federal Circuit (see here), it was an abuse of discretion to find that Incyte Corp. and Incyte Holdings Corp., owners of U.S. Patent No. 9,662,335, would be irreparably harmed by Sun Pharmaceuticals’ launch of “Leqselvi” for the treatment of alopecia areata, or AA.
Their ruling was brief but “the facts are undisputed,” according to the court.
“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,” they added.
The ‘355 patent recites deuterized versions of the Janus kinase modulator ruxolitinib for the treatment of diseases associated with autoimmune disorders. Leqselvi, meanwhile, also features deuterated ruxolitinib as its active ingredient. It gained FDA approval last year.
Incyte filed a patent infringement lawsuit and prevailed on its request for a preliminary injunction, when Judge Julien X. Neals of the District of New Jersey found merit in claims that absent relief, Sun will enjoy an extended head start in the market for treating AA, causing irreparable harm to Incyte. He barred Sun from "making, using, selling, advertising, or distributing" its AA drug.
Reversing, the Federal Circuit today said Neals made a clear error of law because Incyte’s delayed product launch and soon-to-expire patent means it is not positioned to take advantage of its market exclusivity.
The patent owner “fails to provide nonspeculative evidence that it will be irreparably harmed by Sun’s launch under these circumstances where Sun’s multi-year head start is inevitable,” the panel ruled.
Equally unavailing were arguments by Incyte that it would also suffer harm in the form of a diminished value on its investment. That position, while resonating with Neals, did not move the needle at the Federal Circuit.
“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. For the same reasons, the district court’s finding regarding irreparable harm is clearly erroneous,” they ruled.
The written decision today follows their order on April 9 vacating the relief ordered by Neals and comes just one day after Jazz Pharmaceuticals and Jazz Pharmaceuticals Ireland saw portions of their own permanent injunction thrown out, in a dispute with Avadel CNS Pharmaceuticals over the sleep disorder drug Lumryz (see here).
Patent injunctions have become increasingly difficult to secure in the wake of the US Supreme Court’s 2006 ruling in eBay v. MercExchange, a trend Congressional leaders are hoping to reverse in their re-introduced RESTORE Act (see here).
Today’s decision was authored by Chief Judge Kimberly Moore, joined by Judges Sharon Prost and Todd Hughes.
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