Federal Circuit Update (May 2025)
Client Alert | June 23, 2025
This edition of Gibson Dunn’s Federal Circuit Update for May summarizes the current status of petitions pending before the Supreme Court, a recent en banc Federal Circuit decision concerning Federal Rule of Evidence 702, and recent Federal Circuit decisions concerning the safe harbor provision under 35 U.S.C. § 271(e), preliminary injunctions, and conception.
Federal Circuit News
Noteworthy Petitions for a Writ of Certiorari:
There were a few potentially impactful petitions filed before the Supreme Court in May 2025:
- In re Micron Technology, Inc. (US No. 24-1216): The question presented is “Does a district court clearly and indisputably err in ordering production of sensitive technical documentation without applying the standards set forth in the parties’ protective order and without considering the Executive Branch’s national-security interests in the documentation at issue?” Respondents waived the right to file a response, and the Court will consider the petition at its June 26, 2025 conference.
- McLeay v. Stewart (US No. 24-1181): The question presented is “Whether a court of appeals may sua sponte revive an argument the government has impliedly waived on appeal and rely on the waived argument in ruling in the government’s favor.” The respondent waived its right to file a response, and the Court will consider the petition at its June 26, 2025 conference.
We provide an update below of the petitions pending before the Supreme Court, which were summarized in our April 2025 update:
- Purdue Pharma L.P. v. Accord Healthcare, Inc. (US No. 24-1132): The respondent filed its response brief on June 2, 2025.
- The Court denied the petition in Converter Manufacturing, LLC v. Tekni-Plex, Inc. (US No. 24-866) and NexStep, Inc. v. Comcast Cable Communications, LLC (US No. 24-1137).
Federal Circuit En Banc Decisions:
EcoFactor, Inc. v. Google LLC, No. 23-1101 (Fed. Cir. May 21, 2025): EcoFactor owns a patent related to the operation of smart thermostats in computer-networked heating and cooling systems. Before trial, Google moved to exclude the testimony of EcoFactor’s damages expert, Mr. Kennedy, because his royalty rate for the patented technology was unsupported by a reliable methodology or sufficient facts. The district court denied the motion. At trial, Mr. Kennedy opined that Google should pay damages at a particular royalty rate. The jury found Google infringed and awarded EcoFactor over $20 million in lump-sum damages. Google moved for a new trial on damages, which was denied. Google appealed, and a Federal Circuit panel majority (Judges Lourie and Reyna) affirmed the denial of Google’s motion for a new trial on damages with Judge Prost dissenting. Google petitioned for rehearing en banc, which the en banc Court granted as to the issue of damages and Federal Rule of Evidence 702.
The en banc majority (Moore, C.J., joined by Lourie, Dyk, Prost, Taranto, Chen, Hughes, and Stoll, JJ.) reversed and remanded for a new trial on damages. The majority concluded that the denial of Google’s motion to exclude under Rule 702 was an abuse of discretion. Specifically, the majority determined that the payment provisions in the three licenses Mr. Kennedy relied upon for his royalty rate stated that the lump-sum payments in the licenses did not reflect or constitute a reasonable royalty. And while a couple of the licenses included a clause stating what EcoFactor thought the reasonable royalty rate was, it did not suggest that the licensees had agreed to that royalty rate. The majority therefore determined that the plain language of the licenses did not support Mr. Kennedy’s opinion that the licensees would have agreed to pay the royalty rate he set forth, and thus, the district court failed to fulfill its responsibility as gatekeeper under Rule 702 by allowing that testimony at trial. The majority further determined that it could not be sure the error did not influence the jury, and thus, reversed the denial of Google’s motion for a new trial and remanded for a new trial on damages.
Judge Reyna dissented. Judge Reyna did not think the district court abused its discretion in finding that the three license agreements constituted sufficient facts or data under Rule 702. In his opinion, the majority’s question of whether the three licenses bound the contracting parties to the royalty rate was not the correct inquiry. Instead, the right question should have been whether there were sufficient facts or data to support Mr. Kennedy’s testimony of what the reasonable royalty is.
Judge Stark also dissented. Judge Stark reasoned that the majority concluded that the district court abused its discretion by permitting Mr. Kennedy to testify to an opinion that rested on disputed facts and not insufficient facts. The three licenses could have been interpreted as supporting or refuting the royalty rate from Mr. Kennedy, and the jury could have reasonably credited EcoFactor’s interpretation of the disputed evidence. Judge Stark raised a concern that the majority’s opinion would encourage future panels of the Court to engage in improper appellate factfinding.
Upcoming Oral Argument Calendar
The list of upcoming arguments at the Federal Circuit is available on the court’s website.
Key Case Summaries (May 2025)
Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC, Nos. 24-2274, 24-2277, 24-2278 (Fed. Cir. May 6, 2025): Jazz sells two sodium oxybate products (Xyrem and Xywav) for treatment of narcolepsy and idiopathic hypersomnia (IH), respectively. Xywav is the first, and currently, only FDA-approved treatment for IH. Avadel filed a paper New Drug Application (NDA) seeking FDA approval of its own product, Lumryz, for treatment of narcolepsy. Avadel’s paper NDA was eventually approved by the FDA, allowing Avadel to commercially launch Lumryz. In the interim, Jazz sued Avadel alleging its FDA submission constituted patent infringement under 35 U.S.C. § 271(e)(2)(A). Prior to trial, the parties stipulated to infringement, if the claim was not found to be invalid. A jury found that Avadel had not shown the claim to be invalid. The district court then entered a permanent injunction, which in part enjoined Avadel from initiating new clinical trials or studies for Lumryz.
The Federal Circuit (Lourie, J., joined by Reyna and Taranto, JJ.) reversed-in-part, vacated-in-part, and remanded. Under the safe-harbor provision of 35 U.S.C. § 271(e)(1), “experimentation with a patented drug product, when the purpose is to prepare for commercial activity . . . after a valid patent expires, is not patent infringement.” In addition, 35 U.S.C. § 271(e)(3) statutorily precludes such activity from being enjoined. The Court concluded that under this plain language of the statute, enjoining Avadel from initiating new clinical trials for Lumryz until after the expiration of Jazz’s patent is unlawful. The Court therefore reversed that portion of the district court’s injunction as unlawfully overbroad.
Incyte Corp. v. Sun Pharmaceutical Industries, Ltd., No. 25-1162 (Fed. Cir. May 7, 2025): Incyte sued Sun for allegedly infringing its patent, which claims deuterated versions of ruxolitinib used to treat diseases associated with autoimmune disorders. In July 2024, Sun secured FDA approval for Leqselvi, an oral deuterated ruxolitinib product for treating alopecia areata (AA) and was set to launch in October 2024. Incyte moved for a preliminary injunction to prevent the launch, which the district court granted.
The Federal Circuit (Moore, C.J., joined by Prost and Hughes, JJ.) reversed, holding that the district court clearly erred in finding irreparable harm. A patentee can be irreparably harmed by an alleged infringer’s improper “head start” because the alleged infringer can capture market share and secure a competitive lead. However, the Court determined that Sun’s head start was inevitable because it was prepared to launch imminently, while Incyte’s product would not launch until several years after the patent’s expiration in December 2026. And Incyte cannot enjoin Sun from launching after the expiration of its patent. Thus, Sun’s multi-year head start is inevitable regardless of any injunction. The Court therefore concluded that the district court’s finding that Incyte would be the first to market if the preliminary injunction were granted was clearly erroneous.
Gibson Dunn partner Paul Torchia argued this case on behalf of Sun, who was also represented by Charlotte Jacobsen, Josh Krevitt, Blaine Evanson, Alexander Harris, and Christine Ranney, also of Gibson Dunn.
Regents of the University of California v. Broad Institute, Inc., Nos. 22-1594, 22-1653 (Fed. Cir. May 12, 2025): Scientists at both Regents and Broad researched efforts relating to CRISPR (clustered regularly interspaced short palindromic repeats) technology, which is a revolutionary gene-editing technology that allows scientists to precisely modify DNA sequences. Both Regents and Broad claim to be the inventor of the CRISPR technology at issue here, and as a result the Patent Trial and Appeal Board (Board) declared an interference. The Board designated Broad as the senior party. The Board rejected Regents’ earliest asserted date of reduction to practice because Regents’ scientists did not know their CRISPR system would work before Broad’s earliest priority date.
The Federal Circuit (Reyna, J., joined by Hughes and Cunningham, JJ.) affirmed-in-part, vacated-in-part, remanded the main appeal, and dismissed the cross-appeal. The Court vacated the Board’s conception ruling, holding that the Board erred in requiring Regents’ scientists to have known their invention would work to prove conception. The Court determined that the Board focused almost exclusively on Regents’ scientists’ statements of uncertainty as to whether their invention would work, and instead, should have considered whether “routine skill” or methods were all that was necessary to reduce the Regents’ scientists’ idea to practice. The Court thus remanded for the Board to decide conception under the proper application of the legal framework.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups, or the following authors:
Blaine H. Evanson – Orange County (+1 949.451.3805, bevanson@gibsondunn.com)
Audrey Yang – Dallas (+1 214.698.3215, ayang@gibsondunn.com)
Appellate and Constitutional Law:
Thomas H. Dupree Jr. – Washington, D.C. (+1 202.955.8547, tdupree@gibsondunn.com)
Allyson N. Ho – Dallas (+1 214.698.3233, aho@gibsondunn.com)
Julian W. Poon – Los Angeles (+ 213.229.7758, jpoon@gibsondunn.com)
Intellectual Property:
Kate Dominguez – New York (+1 212.351.2338, kdominguez@gibsondunn.com)
Josh Krevitt – New York (+1 212.351.4000, jkrevitt@gibsondunn.com)
Jane M. Love, Ph.D. – New York (+1 212.351.3922, jlove@gibsondunn.com)
© 2025 Gibson, Dunn & Crutcher LLP. All rights reserved. For contact and other information, please visit us at www.gibsondunn.com.
Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.