Large And Unjustified: Second Circuit Clarifies Pleading Requirements In Reverse Payments Cases

On May 13—and more than ten years after Federal Trade Commission v. Actavis, the leading U.S. Supreme Court case on reverse payment settlements—the Second Circuit for the first time weighed in on whether (and how) antitrust plaintiffs' identification of a so-called "side deal" between a patent holder and an accused infringer plausibly alleges a "large and unjustified payment." In particular, the Second Circuit ruled that the plaintiffs in In re: Bystolic Antitrust Litigation had failed to "plausibly allege that [the defendant's] reverse payments were sham and pretextual rather than payments that constituted fair value for goods and services obtained as a result of arms-length dealings."