In Incyte Corp. v Sun Pharmaceutical Indus., Inc., the Federal Circuit found a PGR petitioner lacked standing to appeal because its "development plans amount to an expression of
intent to create a product that runs a substantial risk of infringement if it is able to clear all development hurdles, secure FDA-approval, and bring its product to market" which was "too speculative to show concrete plans to develop a" product that "will be administered at the claimed dosage." (emphasis in original).
The majority opinion is hardly surprising to those who have followed this issue. What is far more interesting to me is Judge Hughes' concurrence. While agreeing the majority decision "is the result compelled by [the Federal Circuit's] precedent," Judge Hughes wrote separately because that he believes that "precedent on whether parties have standing to appeal to this court from an adverse administrative post-grant review is too restrictive and creates a special standing rule for patent cases." Judge Hughes further noted that the "existence of this narrower special rule is even more pronounced in the pharmaceutical space." I agree with both points.
Judge Hughes then went through several cases, noting the focus on a lack of certainty of when or if a product would get approval and be marketed. But as Judge Hughes rightly points out, "[a]s a practical matter, pharmaceutical drugs generally have long development timelines, which inherently means there is more uncertainty about whether a drug will ever reach the market or infringe a given patent." As he further noted, precluding appeal is especially harmful because a "party seeking to develop a drug that may infringe an existing patent has a significant interest in trying to invalidate that patent before making the large financial and time investments such development efforts demand." In other words, challengers are stuck in a Catch 22 - challenge a patent before significant investment and run the risk of no appellate review, or wait until after investment when costs are already sunk (or design around the patent, which may be unnecessary).
I agree with Judge Hughes' policy concerns, and am interested to see if Incyte takes the invitation to seek en banc or Supreme Court review. What the concurrence is light on, however, is legal analysis of what is required for standing under Supreme Court jurisprudence. Judge Hughes cites a single case on standing, stating "Article III standing requirement is not meant to be a high barrier; the Supreme Court has characterized it as setting 'the irreducible constitutional minimum.'” citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (emphasis added by Judge Hughes).
Noticeably absent, for example, is any citation to MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), where the Supreme Court addressed standing in the analogous situation of declaratory judgments, albeit in the context of whether a licensee was required to terminate the license prior to bringing an action. As Justice Scalia noted, the Supreme Court cases on standing "do not draw the brightest of lines between those declaratory-judgment actions that satisfy the case-or-controversy requirement and those that do not." Justice Scalia quoted an earlier 1941 Supreme Court case, where the Court "summarized as follows: 'Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.'"
I'm not sure if Incyte is the best vehicle for a challenge. For example, the majority noted that the petitioner's "declarations show Incyte allocated a small amount of funds one month before filing this appeal for initial development of two topical drugs to treat alopecia areata: one with the active ingredient implicated by the claims at issue, deuterated ruxolitinib, and the other
with non-deuterated ruxolitinib, which undisputably would not be covered by the claims at issue" and did not explain why it would likely infringe the dosage limitations other than by providing conclusory testimony. Thus, reasonable minds can certainly differ about whether there was "sufficient immediacy and reality." However, the majority also made statements such as "The testimony shows that, when it filed this appeal, Incyte faced significant manufacturing, formulation, testing, and regulatory hurdles to bring either product to market" which Judge Hughes noted seems to require facts "that would only happen on the eve of FDA approval or commercial launch." Requiring a party reach that stage to find "sufficient immediacy" would be a high bar indeed.
As Judge Hughes noted in other cases standing was found lacking where a drug "had already been developed and completed Phase II clinical trials." citing Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, 85 F.4th 1377, 1380–81 (Fed. Cir. 2023). A case with such indisputably concrete investments might make a better vehicle.