A federal appeals court upheld a lower-court injunction blocking the National Institutes of Health from imposing a 15% cap on indirect-cost reimbursement, preserving negotiated overhead rates for research institutions. The 1st U.S. Circuit Court of Appeals found the NIH’s guidance violated statutory procedures and agency rules, handing a legal win to a coalition of universities and scholarly associations that sued to protect existing reimbursement arrangements. Indirect costs—funds that support facilities, IT, compliance and shared research infrastructure—are negotiated between NIH and institutions and typically cover a substantial portion of campus research operations. The court ruled the agency exceeded its authority by trying to impose a blanket cap rather than negotiating rates, a decision that safeguards billions in institutional research support in the near term. NIH declined immediate comment on whether it will seek further appeals. University research offices and medical schools welcomed the ruling, saying it averts deep cuts to labs, patient-care infrastructure and graduate training that many institutions had warned would follow a 15% cap.