The underlying fight is over Stelara, Janssen's blockbuster biologic used to treat plaque psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis, which generated over $70 billion in sales over its fifteen-year effective patent life. After Janssen's core ustekinumab patent expired in September 2023, Samsung obtained FDA approval for its biosimilar SB17, marketed as Pyzchiva, and the two companies settled related patent litigation. That settlement granted Samsung a limited patent license and allowed sublicenses only to "commercialization partners" selling SB17 "on behalf of" Samsung.
The dispute arose when Samsung, alongside Sandoz, entered a Private Label Distributor Agreement with Quallent Pharmaceuticals Health LLC, a subsidiary of Cigna Group. Under a companion sublicense, Samsung granted Quallent a non-exclusive right to sell SB17 under Quallent's own label. Janssen argued that arrangement fell outside the settlement's commercialization-partner exception because Quallent would not be selling the product on Samsung's behalf, and sought a preliminary injunction to halt Samsung's supply to Quallent during litigation.
The parties submitted competing expert declarations on irreparable harm. Janssen's expert, Dr. Robert Popovian, argued that because Cigna controls approximately 23% of the U.S. prescription market, its subsidiary's private-label biosimilar could commandeer nearly a quarter of potential consumers nationally, pointing to the Humira market where private-label biosimilars caused Humira to lose 31% of its market share. Samsung's expert, Dr. DeForest McDuff, assessed Humira's market share loss as relatively modest and measurable, and opined that any harm to Janssen would be quantifiable and might not even be imminent. U.S. District Judge Georgette Castner credited Dr. McDuff's opinion, concluded that Janssen had not shown its damages would be incapable of calculation, and denied the injunction despite finding Janssen likely to succeed on the merits of its breach-of-contract claims.
Writing for a unanimous panel, Circuit Judge Krause affirmed. The court held that because damages are the default remedy for breach of contract, the availability of monetary damages typically precludes a finding of irreparable harm. The panel rejected Janssen's argument that loss of market share in a complex biopharmaceutical market is categorically sufficient to establish irreparable injury. The court noted that its prior Novartis decision involved false advertising claims under the Lanham Act, where courts historically applied a presumption of irreparable harm that has been discredited by subsequent Supreme Court decisions in eBay and Winter.
The court also held that the correct standard requires showing that damage calculation is impracticable or practically impossible — not merely difficult. The panel noted that Janssen's own Humira evidence cut against it: that market study showed the brand manufacturer was able to reach a co-branding agreement whereby its healthcare-conglomerate competitor could reap a percentage of its profits in exchange for returning Humira to its formulary, suggesting that negotiating disadvantages could be remedied through monetary arrangements.
On Janssen's claim that it would lose negotiating leverage against Cigna, the court held that the bald assertion of irreparable harm from a loss of negotiating leverage and the domino effect that loss allegedly would have on a movant's business does not clear the threshold, requiring proof of actual and imminent rather than remote or speculative harm. The panel affirmed the denial of the preliminary injunction on all four of Janssen's arguments.