Court Opinion

ID: 4197575
Source: CourtListenerOpinion
Date Created: 2017-08-21 17:00:43.116124+00
Date Added: 2024-06-11T14:13:41.978302
License: Public Domain

PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                _____________

 Nos. 14-4202, 14-4203, 14-4204, 14-4205, 14-4206, &
                      14-4602
                   _____________

     In re: LIPITOR ANTITRUST LITIGATION

           RITE AID CORPORATION;
  RITE AID HDQTRS CORPORATION; JCG (PJC)
USA, LLC; MAXI DRUG, INC. d/b/a Brooks Pharmacy;
           ECKERD CORPORATION,

                          Appellants in No. 14-4202

    WALGREEN COMPANY; THE KROGER
 COMPANY; SAFEWAY, INC.; SUPERVALU, INC.;
      HEB GROCERY COMPANY L.P.,

                          Appellants in No. 14-4203

               GIANT EAGLE, INC.,

                          Appellant in No. 14-4204
  MEIJER INC.; MEIJER DISTRIBUTION, INC.,

                     Appellants in No. 14-4205

  ROCHESTER DRUG CO-OPERATIVE, INC.;
STEPHEN L. LAFRANCE PHARMACY, INC. d/b/a
  SAJ DISTRIBUTORS; BURLINGTON DRUG
 COMPANY, INC.; VALUE DRUG COMPANY;
   PROFESSIONAL DRUG COMPANY, INC.;
     AMERICAN SALES COMPANY LLC,

                     Appellants in No. 14-4206

   A.F.L.-A.G.C. BUILDING TRADES WELFARE
       PLAN; MAYOR AND CITY COUNCIL
  OF BALTIMORE, MARYLAND; NEW MEXICO
 UNITED FOOD AND COMMERCIAL WORKERS
   UNION’S AND EMPLOYERS’ HEALTH AND
 WELFARE TRUST FUND; LOUISIANA HEALTH
  SERVICE INDEMNITY COMPANY, d/b/a BLUE
 CROSS/BLUE SHIELD OF LOUISIANA; BAKERS
    LOCAL 433 HEALTH FUND; TWIN CITIES
  BAKERY WORKERS HEALTH AND WELFARE
  FUND; FRATERNAL ORDER OF POLICE, FORT
     LAUDERDALE LODGE 31, INSURANCE
TRUST FUND; INTERNATIONAL BROTHERHOOD
                     2
     OF ELECTRICAL WORKERS LOCAL 98;
NEW YORK HOTEL TRADES COUNSEL & HOTEL
    ASSOCIATION OF NEW YORK CITY, INC.,
HEALTH BENEFITS FUND; EDWARD CZARNECKI;
   EMILIE HEINLE; FRANK PALTER; ANDREW
 LIVEZEY; EDWARD ELLENSON; JEAN ELLYNE
 DOUGAN; NANCY BILLINGTON, ON BEHALF OF
  THEMSELVES AND ALL OTHERS SIMILARLY
                 SITUATED,

                          Appellants in No. 14-4602

                      _______

Nos. 15-1184, 15-1185, 15-1186, 15-1187, 15-1274, 15-
                  1323 & 15-1342
                       ______

 IN RE: EFFEXOR XR ANTITRUST LITIGATION

     WALGREEN, CO.; THE KROGER, CO.;
   SAFEWAY, INC.; SUPERVALU, INC.; HEB
  GROCERY COMPANY LP; AMERICAN SALES
             COMPANY, INC.,

                          Appellants in No. 15-1184

                         3
 RITE AID CORPORATION; RITE AID HDQTRS.,
CORPORATION; JCG (PJC) USA, LLC; MAXI DRUG,
   INC. d/b/a BROOKS PHARMACY; ECKERD
CORPORATION; CVS CAREMARK CORPORATION,

                     Appellants in No. 15-1185

            GIANT EAGLE, INC.,

                      Appellant in No. 15-1186

  MEIJER, INC.; MEIJER DISTRIBUTION, INC.,

                     Appellants in No. 15-1187

     PROFESSIONAL DRUG COMPANY, INC.;
    ROCHESTER DRUG CO-OPERATIVE, INC.;
    STEPHEN L. LAFRANCE HOLDINGS, INC.;
 STEPHEN L. LAFRANCE PHARMACY, INC. d/b/a
SAJ DISTRIBUTORS; UNIONDALE CHEMIST, INC.,

                     Appellants in No. 15-1274

PAINTERS DISTRICT COUNCIL NO. 30 HEALTH &
 WELFARE FUND; MEDICAL MUTUAL OF OHIO,

                     Appellants in No. 15-1323

                     4
  A.F. of L.-A.G.C. BUILDING TRADES WELFARE
  PLAN; DARYL DEINO; IBEW-NECA LOCAL 505
HEALTH & WELFARE PLAN; LOUISIANA HEALTH
   SERVICE INDEMNITY COMPANY d/b/a BLUE
  CROSS/BLUE SHIELD OF LOUISIANA; MAN-U
   SERVICE CONTRACT TRUST FUND; MC-UA
  LOCAL 119 HEALTH & WELFARE PLAN; NEW
   MEXICO UNITED FOOD AND COMMERCIAL
WORKERS UNION’S AND EMPLOYERS’ HEALTH
 AND WELFARE TRUST FUND; PLUMBERS AND
PIPEFITTERS LOCAL 572 HEALTH AND WELFARE
FUND; SERGEANTS BENEVOLENT ASSOCIATION
    HEALTH AND WELFARE FUND; PATRICIA
    SUTTER (TOGETHER “END-PAYOR CLASS
PLAINTIFFS”) ON BEHALF OF THEMSELVES AND
       ALL OTHERS SIMILARLY SITUATED,

                           Appellants in No. 15-1342

                        ______

     On Appeal from the United States District Court
              for the District of New Jersey
       (MDL 2332) / (D.N.J. No. 3-12-cv-02389) /
(D.N.J. No. 3-12-cv-02478) / (D.N.J. No. 3-12-cv-04115)
   / (D.N.J. No. 3-12-cv-04537) / (D.N.J. No. 3-12-cv-
 05129) / (D.N.J. No. 3-12-cv-06774) / (D.N.J. No. 3-12-
 cv-07561) / (D.N.J. No. 3-11-cv-05479) / (D.N.J. No. 3-
       11-cv-05590) / (D.N.J. No. 3-11-cv-05661) /
                           5
(D.N.J. No. 3-11-cv-06985) / (D.N.J. No. 3-11-cv-07504)
  / (D.N.J. No. 3-12-cv-03116) / (D.N.J. No. 3-12-cv-
                         03523)
    District Judge: The Honorable Peter G. Sheridan
                        _______

                 Argued May 19, 2017

 Before: SMITH, Chief Judge, AMBRO, and FISHER,
                  Circuit Judges

               (Filed: August 21, 2017)

Monica L. Kiley
Hangley Aronchick Segal Pudlin & Schiller
4400 Deer Path Road
Suite 200
Harrisburg, PA 17110

Maureen S. Lawrence
Barry L. Refsin                [ARGUED]
Hangley Aronchick Segal Pudlin & Schiller
One Logan Square
18th & Cherry Streets, 27th Floor
Philadelphia, PA 19103
      Counsel for Appellants Rite Aid Corp., Rite Aid
      Hdqtrs. Corp., Maxi Drug Inc., Eckerd Corp. and
      JCG (PJC) USA LLC
                          6
Anna T. Neill
Scott E. Perwin [ARGUED]
Lauren C. Ravkind
Kenny Nachwalter, P.A.
1441 Brickell Avenue
Four Seasons Tower, Suite 1100
Miami, FL 33131
      Counsel for Appellants Walgreen Co., Kroger Co.,
      Safeway Inc., Supervalu, Inc., HEB Grocery Co.
      LP and American Sales Co. LLC

David P. Germaine
Joseph M. Vanek
Vanek, Vickers & Masini, P.C.
55 West Monroe Street, Suite 3500
Chicago, IL 60603

Moira Cain-Mannix
Bernard D. Marcus
Erin G. Allen
Marcus & Shapira LLP
One Oxford Centre
35th Floor
Pittsburgh, PA 15219
       Counsel for Appellant Giant Eagle, Inc.

Bradley J. Demuth
Linda P. Nussbaum
                            7
Nussbaum Law Group P.C.
570 Lexington Avenue, 19th Floor
New York, NY 10022

David P. Germaine
Joseph M. Vanek
Vanek Vickers & Masini
55 West Monroe Street
Suire 3500
Chicago, IL 60603
      Counsel for Appellants Meijer, Inc. and Meijer
      Distribution

Gregory T. Arnold
Kristen A. Johnson
Kristie A. LaSalle
Thomas M. Sobol              [ARGUED]
Hagens Berman Sobol & Shapiro LLP
55 Cambridge Parkway, Suite 301
Cambridge, MA 02142

Caitlin Coslett
Eric L. Cramer
Jennifer MacNaughton
Daniel Simons
David F. Sorensen           [ARGUED]
Richard D. Schwartz
Berger & Montague, P.C.
1622 Locust Street
                           8
Philadelphia, PA 19103

Elena K. Chan
Bruce E. Gerstein          [ARGUED]
Kimberly Hennings
Garwin Gerstein & Fisher LLP
88 Pine Street, 10th Floor
New York, NY 10005

Peter Kohn
Richard D. Schwartz
Faruqi & Faruqi LLP
101 Greenwood Avenue, Suite 600
Jenkintown, PA 19046

Miles Greaves
Barry S. Taus
Taus Cebulash & Landau, LLP
80 Maiden Lane, Suite 1204
New York, NY 10038

Erin C. Burns
Dianne M. Nast
NastLaw LLC
1101 Market Street, Suite 2801
Philadelphia, PA 19107

Don Barrett
Barrett Law Group
                           9
404 Court Square
P.O. Box 927
Lexington, MS 39095
      Counsel for Appellants Direct-Purchaser Class
      Plaintiffs Rochester Drug Co-Operative, Inc., et al.

James E. Cecchi              [ARGUED]
Lindsey H. Taylor
Carella, Byrne, Cecchi, Olstein, Brody, & Agnello, P.C.
5 Becker Farm Road
Roseland, NJ 07068

Peter S. Pearlman
Cohn Lifland Pearlman Herrmann & Knopf LLP
Park 80 West - Plaza One
250 Pehle Avenue, Suite 401
Saddle Brook, NJ 07663
      Liaison Counsel for Appellants Direct-Purchaser
      Class Plaintiffs Rochester Drug Co-Operative, Inc.,
      et al.

Justin N. Boley
Bethany R. Turke
Kenneth A. Wexler
Wexler Wallace LLP
55 West Monroe Street, Suite 3300
Chicago, IL 60603

James W. Anderson
                           10
Vincent J. Esades
Renae Steiner
David R. Woodward              [ARGUED]
Heins Mills & Olson, P.L.C.
310 Clifton Avenue
Minneapolis, MN 55403

J. Douglas Richards
Sharon K. Robertson
Cohen Milstein Sellers & Toll, PLLC
88 Pine Street, 14th floor
New York, NY 10005

Michael M. Buchman
Alex Straus, Esq.
Motley Rice LLC
600 Third Avenue, Suite 2101
New York, NY 10016

Jeffrey L. Kodroff
John A. Macoretta
Spector Roseman Kodroff & Willis
181 Market Street
Suite 2500
Philadelphia, PA 19103
       Counsel for Appellants End-Payor Class Plaintiffs
       AFL-AGC Building Trades Welfare Plan, et al.

Lisa J. Rodriguez
                          11
Schnader Harrison Segal & Lewis LLP
Woodland Falls Corporate Park
220 Lake Drive East, Suite 200
Cherry Hill, NJ 08002-1165
      Liaison Counsel for Appellants End-Payor Class
      Plaintiffs AFL-AGC Building Trades Welfare Plan,
      et al.

Joseph M. Alioto
Jamie L. Miller
Theresa Driscoll Moore
Alioto Law Firm
One Sansome Street, 35th Floor
San Francisco, CA 94104

Timothy A.C. May
Gil D. Messina
Messina Law Firm, P.C.
961 Holmdel Road
Holmdel, NJ 07733

Lori A. Fanning
Marvin A. Miller
Matthew E. Van Tine
Miller Law LLC
115 South LaSalle Street, Suite 2910
Chicago, IL 60603

Kevin P. Roddy
                           12
Wilentz, Goldman & Spitzer, P.A.
90 Woodbridge Center Drive, Suite 900
Woodbridge, NJ 07095

Mark S. Sandmann
Hill Carter Franco Cole & Black, P.C.
99102 Brinley Avenue, Suite 201
Louisville, KY 40243
      Counsel for Appellants Painters District Council
      No. 30 Health & Welfare Fund and Medical Mutual
      of Ohio

Steve D. Shadowen
Hilliard & Shadowen LLP
919 Congress Avenue, Suite 1325
Austin, TX 78701

Michael A. Carrier
Rutgers Law School
217 North Fifth Street
Camden, NJ 08102
      Counsel for 48 Law, Economics, and Business
      Professors and the American Antitrust Institute
      as Amici Curiae in support of Appellants

Jonathan E. Nuechterlein, Former General Counsel
David C. Shonka, Acting General Counsel
Joel Marcus, Director of Litigation
Michele Arington, Assistant General Counsel
                         13
Deborah L. Feinstein, Director
Markus H. Meier, Acting Deputy Director
Bradley S. Albert, Deputy Assistant Director

Elizabeth R. Hilder
Heather Johnson
Jamie R. Towey
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, DC 20580
      Counsel for Federal Trade Commission as Amicus
      Curiae in support of Appellants

Dimitrios T. Drivas
Raj S. Gandesha
Bryan D. Gant
Sheryn E. George
Robert A. Milne             [ARGUED]
Brendan G. Woodard
Amy E. Boddorff
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036

Liza M. Walsh
Eleonore Ofosu-Antwi
Walsh Pizzi O’Reilly & Falanga
One Riverfront Plaza
1037 Raymond Boulevard, 6th Floor
                           14
Newark, NJ 07102
     Counsel for Appellees Pfizer, Inc., Pfizer Ireland
     Pharmaceuticals, Warner-       Lambert Company,
     Warner-Lambert Company LLC, Wyeth, Inc.,
     Wyeth Pharmaceuticals, Inc., Wyeth-Whitehall
     Pharmaceuticals LLC and Wyeth Pharmaceuticals
     Company

Jonathan D. Janow
John C. O’Quinn
Gregory L. Skidmore
Edwin J. U
Karen N. Walker
Kirkland & Ellis LLP
655 15th Street, N.W., Suite 1200
Washington, DC 20005

Jay P. Lefkowitz,            [ARGUED]
Joseph Serino, Jr.
Steven J. Menashi
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
       Counsel for Appellees Ranbaxy, Inc., Ranbaxy
       Pharmaceuticals, Inc., Ranbaxy       Laboratories
       Ltd., Teva Pharmaceutical Industries Ltd. and Teva
       Pharmaceuticals USA, Inc.

                           15
Katherine A. Helm
Noah M. Leibowitz
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017

Victor E. Schwartz
Philip S. Goldberg
Cary Silverman
Shook, Hardy & Bacon L.L.P.
1155 F Street NW, Suite 200
Washington, DC 20004
       Counsel for American Tort Reform Association and
       Pharmaceutical Research and Manufacturers of
       America as Amici Curiae in support of Appellees

Jonathan D. Hacker
Edward Hassi
O’Melveny & Myers LLP
1625 Eye Street NW
Washington, DC 20006
      Counsel for Antitrust Economists as Amici Curiae
      in support of Appellees

Ashley Bass
Stephen Bartenstein
Andrew D. Lazerow
Covington & Burling LLP
850 10th Street, N.W.
                          16
One City Center
Washington, D.C. 20001
     Counsel for Pharmaceutical Research and
     Manufacturers of America as Amicus Curiae in
     support of Appellees

Roy Chamcharas
Peter J. Curtin
William A. Rakoczy
Molino Mazzochi & Siwik LLP
6 West Hubbard Street, Suite 500
Chicago, IL 60654

Brian T. Burgess
Goodwin Procter LLP
901 New York Avenue, NW
Suite 900 East
Washington, DC 20001

Christopher T. Holding
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
      Counsel for Generic Pharmaceutical Association as
      Amicus Curiae in support of Appellees

                          17
                    ______________

                       OPINION
                   ________________

SMITH, Chief Judge.
       This opinion addresses two sets of consolidated
appeals concerning two pharmaceutical drugs: Lipitor and
Effexor XR. In both sets of consolidated appeals,
plaintiffs allege that the companies holding the patents
related to Lipitor and Effexor XR fraudulently procured
and enforced certain of those patents. Plaintiffs further
allege that those companies holding the patents entered
into unlawful, monopolistic settlement agreements with
potential manufacturers of generic versions of Lipitor and
Effexor XR. The same District Court Judge dismissed the
complaints in the Lipitor litigation and dismissed certain
allegations in the Effexor litigation. Those decisions
relied on plausibility determinations that are now
challenged on appeal.
      We begin with a brief summary of the relevant
regulatory scheme applicable to pharmaceutical drugs and
then detail the factual and procedural backgrounds of these
two sets of consolidated appeals. The remainder of the
opinion broadly covers two issues. First, in F.T.C. v.
Actavis, Inc., 133 S. Ct. 2223 (2013), the Supreme Court
concluded that payments from patentees to infringers
                            18
through “reverse payment settlement agreements” are
subject to antitrust scrutiny. Id. at 2227. In both sets of
consolidated appeals, plaintiffs allege that the companies
holding the pharmaceutical patents and the generic
manufacturers entered into such agreements. We are
asked to decide whether those allegations are plausible.
We conclude, as to both sets of appeals, that they are.
Second, regarding only the Lipitor consolidated appeals,
we address whether plaintiffs in those appeals pled
plausible allegations of fraudulent patent procurement and
enforcement, as well as other related misconduct. We
again determine that those allegations are indeed
plausible. Accordingly, we will reverse the District
Court’s dismissal of the complaints in the Lipitor
litigation, reverse its dismissal of the allegations in the
Effexor litigation, and remand for further proceedings.
                             I
       The 1984 Drug Price Competition and Patent Term
Restoration Act (the “Hatch-Waxman Act”), 98 Stat.
1585, as amended, provides a regulatory framework
designed in part to (1) ensure that only rigorously tested
pharmaceutical drugs are marketed to the consuming
public, (2) incentivize drug manufacturers to invest in new
research and development, and (3) encourage generic drug
entry into the marketplace. As we have noted previously,
the Hatch-Waxman Act contains four key relevant
features. See In re Lipitor Antitrust Litig., 855 F.3d 126,
135 (3d Cir. 2017) (Lipitor III), as amended (Apr. 19,
                            19
2017); King Drug Co. of Florence v. Smithkline Beecham
Corp., 791 F.3d 388, 394 (3d Cir. 2015), cert. denied, 137
S. Ct. 446 (2016).
       First, the Hatch-Waxman Act requires a drug
manufacturer wishing to market a new brand-name drug
to first submit a New Drug Application (“NDA”) to the
Food and Drug Administration (“FDA”), see 21 U.S.C.
§ 355, and then undergo a long, complex, and costly
testing process, see 21 U.S.C. § 355(b)(1) (requiring,
among other things, “full reports of investigations” into
safety and effectiveness; “a full list of the articles used as
components”; and a “full description” of how the drug is
manufactured, processed, and packed). If this process is
successful, the FDA may grant the drug manufacturer
approval to market the brand-name drug.
      Second, after that approval, a generic manufacturer
can obtain similar approval by submitting an Abbreviated
New Drug Application (“ANDA”) that “shows that the
generic drug has the same active ingredients as, and is
biologically equivalent to, the brand-name drug.” Caraco
Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405
(2012) (citing 21 U.S.C. §§ 355(j)(2)(A)(ii), (iv)). This
way, a generic manufacturer does not need to undergo the
same costly approval procedures to develop a drug that has
already received FDA approval. Actavis, 133 S. Ct. at
2228 (“The Hatch-Waxman process, by allowing the
generic to piggy-back on the pioneer’s approval efforts,
‘speed[s] the introduction of low-cost generic drugs to
                             20
market,’ Caraco, [566 U.S. at 405], thereby furthering
drug competition.” (first alteration in original)).
        Third, foreseeing the potential for conflict between
brand-name and generic drug manufacturers, the Hatch-
Waxman Act “sets forth special procedures for
identifying, and resolving, related patent disputes.” Id.
The Hatch-Waxman Act, as well as federal regulations,
requires brand-name drug manufacturers to file
information about their patents with their NDA. Id. The
brand-name manufacturer “is required to list any patents
issued relating to the drug’s composition or methods of
use.” Lipitor III, 855 F.3d at 135. That filing must include
the patent number and expiration date of the patent. See
Caraco, 566 U.S. at 405 (quoting 21 U.S.C. § 355(b)(1)).
Upon approval of the brand-name manufacturer’s NDA,
the FDA publishes the submitted patent information in its
“Orange Book,” more formally known as the Approved
Drug Products with Therapeutic Equivalence Evaluations.
Id. at 405–06.
       Once a patent has been listed in the Orange Book,
the generic manufacturer is free to file an ANDA if it can
certify that its proposed generic drug will not actually
violate the brand manufacturer’s patents. Id. at 405; see
also id. (The FDA “cannot authorize a generic drug that
would infringe a patent.”). A generic manufacturer’s
ANDA certification may state:

                            21
      (I) that such patent information has not been
      filed,

      (II) that such patent has expired,
      (III) . . . the date on which such patent will
      expire, or
      (IV) that such patent is invalid or will not be
      infringed by the manufacture, use, or sale of
      the new drug for which the application is
      submitted.
21 U.S.C. § 355(j)(2)(A)(vii). “The ‘paragraph IV’
route[], automatically counts as patent infringement . . . .”
Actavis, 133 S. Ct. at 2228 (citing 35 U.S.C.
§ 271(e)(2)(A)). As a result, a paragraph IV certification
often “means provoking litigation” instituted by the brand
manufacturer. Caraco, 566 U.S. at 407.
        If the brand-name manufacturer initiates a patent
infringement suit within 45 days of the ANDA filing, the
FDA must withhold approval of the generic for at least 30
months while the parties litigate the validity or
infringement of the patent. Actavis, 133 S. Ct. at 2228
(citing 21 U.S.C. § 355(j)(5)(B)(iii)). If a court decides
the infringement claim within this 30-month period, then
the FDA will follow that determination. Id. However, if
the litigation is still proceeding at the end of the 30-month
period, the FDA may give its approval to the generic drug

                             22
manufacturer to begin marketing a generic version of the
drug. Id. The generic manufacturer then has the option to
launch “at risk,” meaning that, if the ongoing court
proceeding ultimately determines that the patent was valid
and infringed, the generic manufacturer will be liable for
the brand-name manufacturer’s lost profits despite the
FDA’s approval. See King Drug Co., 791 F.3d at 396 n.8.
       Fourth, to incentivize generic drug manufacturers to
file an ANDA challenging weak patents, the Hatch-
Waxman Act provides that the first generic manufacturer
to file a paragraph IV certification will enjoy a 180-day
exclusivity period. 21 U.S.C. § 355(j)(5)(B)(iv). This
exclusivity period prevents any other generic from
competing with the brand-name drug, see Actavis, 133 S.
Ct. at 2229, which is an opportunity that can be “worth
several hundred million dollars,” to the first-ANDA filer,
id. (quoting C. Scott Hemphill, Paying for Delay:
Pharmaceutical Patent Settlement as a Regulatory Design
Problem, 81 N.Y.U. L. Rev. 1553, 1579 (2006)). This
180-day exclusivity period belongs only to the first
generic manufacturer to file an ANDA; if the first-ANDA
filer forfeits its exclusivity rights, no other generic
manufacturer is entitled to it. Id. (citing 21 U.S.C.
§ 355(j)(5)(D)).         Importantly, the brand-name
manufacturer is not barred from entering the generic
market with its own generic version of the drug—a so-
called “authorized generic”—during the 180-day
exclusivity period. See Lipitor III, 855 F.3d at 135–36
                            23
(citing cases).

                             II
       These consolidated appeals concerning Lipitor and
Effexor XR involve antitrust challenges related to that
pharmaceutical regulatory scheme. This panel previously
detailed much of the factual background and procedural
history of these appeals. See Lipitor III, 855 F.3d at 136–
42. In relevant part, we repeat and expand on much of that
earlier recitation.

                             A

       In In re Lipitor Antitrust Litigation, Nos. 14-1402 et
al., plaintiffs are a putative class of direct purchasers of
branded Lipitor, a putative class of end payors, and several
individual retailers asserting direct-purchaser claims.1 We
will refer to these plaintiffs collectively as the “Lipitor
plaintiffs.” Defendants are Pfizer Inc., Ranbaxy Inc., and
their respective corporate affiliates; they will be referred
to collectively as the “Lipitor defendants.” We proceed by

1
  Earlier this year, the action of a fourth group of
plaintiffs—California-based pharmacists raising claims
under California law—was remanded to the District Court
for a federal subject-matter jurisdiction determination.
See Lipitor III, 855 F.3d at 151–52. We retained
jurisdiction over their appeal. Id.

                             24
outlining the factual background behind those
consolidated appeals and then describing their procedural
history.

1

       Lipitor is a brand-name drug designed to reduce the
level of LDL cholesterol in the bloodstream. In 1987, the
U.S. Patent and Trademark Office (PTO) granted Pfizer
the original patent for Lipitor. 2 That patent—designated
U.S. Patent No. 4,681,893 (the ‘893 Patent)—claimed
protection for atorvastatin, Lipitor’s active ingredient.
Although initially set to expire on May 30, 2006, the ‘893
patent received an extension from the FDA, lengthening
the patent’s term through March 24, 2010.
       Pfizer obtained additional, follow-on patent
protection for Lipitor in December 1993 when the PTO
issued U.S. Patent No. 5,273,995 (the ‘995 Patent). That
patent claimed protection for atorvastatin calcium, the
specific salt form of the active atorvastatin molecule in
Lipitor. Lipitor plaintiffs assert that Pfizer committed
fraud in the procurement and enforcement of the ‘995
Patent. They allege that Pfizer submitted false and
misleading data to the PTO to support its claim that the
cholesterol-synthesis inhibiting activity of atorvastatin
calcium was surprising and unexpected. Specifically,

2
  Pfizer merged with Warner-Lambert Co. in 2002. We
refer to the two entities collectively as “Pfizer.”
                           25
Lipitor plaintiffs claim that Pfizer chemists informed
senior management that the ‘893 Patent already covered
atorvastatin calcium; Pfizer produced a misleading chart
and other data, purportedly cherry-picked, to support its
claim that atorvastatin calcium was several times more
effective than expected; and, in order to avoid
undermining its claim of surprising results, Pfizer
intentionally withheld another dataset that contradicted its
claim as to the surprising effectiveness of atorvastatin
calcium. The PTO originally denied the patent application
for atorvastatin calcium as “anticipated” by the ‘893
Patent. In response, Pfizer submitted a declaration from
one of its chemists claiming even greater, i.e., more
surprising, results from testing atorvastatin calcium. The
PTO again rejected the patent application for atorvastatin
calcium based on its contents being covered by the ‘893
Patent. Pfizer appealed that determination to the PTO’s
Patent Trial and Appeal Board (PTAB). The PTAB
reversed the rejection of Pfizer’s patent application,
concluding that the application was not anticipated by the
‘893 Patent. It, however, required further proceedings on
Pfizer’s application, noting that “[a]n obviousness
rejection . . . appear[ed] to be in order.” Lipitor JA353
(DPP Orig. Am. Compl. ¶¶ 157–58).3 Nevertheless, as

3
  We refer to the joint appendix in Lipitor as “Lipitor JA.”
Also, as Lipitor plaintiffs’ complaints contain
substantively identical factual allegations, we cite only to
the direct purchasers’ complaints, referring to their
                            26
noted above, the PTO concluded that the patent
application claimed nonobvious material and issued the
‘995 Patent. The ‘995 Patent expired on June 28, 2011.
       After obtaining the ‘893 and ‘995 Patents, Pfizer
launched Lipitor in 1997. Following Lipitor’s 1997
launch, Pfizer obtained five additional patents, none of
which, according to Lipitor plaintiffs, could delay further
generic versions of the drug from coming to market.
Pfizer listed all Lipitor patents in the FDA’s Orange Book,
with the exception of certain “process” patents, which
could not be listed. Lipitor plaintiffs allege fraud only as
to the procurement and enforcement of the ‘995 Patent.
        In August 2002, Ranbaxy obtained ANDA first-
filer status for a generic version of Lipitor. Sometime later
in 2002, Ranbaxy notified Pfizer of its paragraph IV
certifications, which asserted that Ranbaxy’s sale,
marketing, or use of generic Lipitor would not infringe any
valid Pfizer patent. Pfizer subsequently sued Ranbaxy for
patent infringement in the District of Delaware within the
45-day period prescribed by the Hatch-Waxman Act.
Pfizer alleged that Ranbaxy’s generic would infringe the
‘893 and ‘995 Patents. As a result of Pfizer’s lawsuit, the

original amended complaint as “DPP Orig. Am. Compl.”
and the second amended complaint as “DPP Sec. Am.
Compl.”
                             27
FDA withheld approval of Ranbaxy’s ANDA for 30
months pursuant to the Hatch-Waxman Act.
       After a bench trial, the Delaware District Court
ruled that Pfizer’s patents were valid and enforceable and
would be infringed by Ranbaxy’s generic. Pfizer Inc. v.
Ranbaxy Labs. Ltd., 405 F. Supp. 2d 495, 525–26 (D. Del.
2005). In doing so, it rejected Ranbaxy’s argument that
the ‘995 Patent was procured by inequitable conduct. Id.
at 520–25. On appeal, the Federal Circuit affirmed the
District Court’s ruling that the ‘893 Patent would be
infringed. Pfizer Inc. v. Ranbaxy Labs. Ltd., 457 F.3d
1284, 1286 (Fed. Cir. 2006). But, the Federal Circuit
reversed in part, holding that claim 6 of the ‘995 Patent
was invalid. Id. at 1291–92. On remand, the District
Court enjoined FDA approval of Ranbaxy’s ANDA until
March 24, 2010, the date of the ‘893 Patent’s expiration.
       In July 2005, as the 30-month statutory window
barring Ranbaxy’s generic market entry was closing,
Pfizer filed a citizen petition with the FDA stating that the
amorphous noncrystalline form of atorvastatin used in
generic Lipitor (including in Ranbaxy’s, as identified in its
ANDA) may be “inferior in quality” to branded Lipitor’s
crystalline form. Lipitor JA1851. Lipitor plaintiffs claim
that this citizen petition was a sham. In particular, they
allege that Pfizer’s citizen petition ignored both a decade-
old FDA policy and FDA statements expressing the
immateriality of drug form (i.e., crystalline versus
amorphous), ignored Pfizer’s own use of the amorphous
                             28
form of branded Lipitor in its clinical studies, and lacked
any evidence to support its claims. In May 2006, the FDA
informed Pfizer that it had not yet reached a decision on
the petition, citing the need for further review and analysis
given the “complex issues” it raised. Lipitor JA1877. The
FDA eventually denied the citizen petition in a 12-page
decision issued on November 30, 2011.
       In 2007, following the Federal Circuit’s ruling
invalidating claim 6 of the ‘995 Patent, Pfizer applied for
a reissuance of the ‘995 Patent to cure the relevant error.
Ranbaxy filed an objection to the reissuance with the PTO.
As explained below, however, Ranbaxy withdrew its
objection, and the PTO reissued the ‘995 Patent in April
2009, relying on Lipitor’s “commercial success,” without
addressing whether Pfizer first obtained the patent using
allegedly fraudulent submissions.
       During their Lipitor patent dispute, Pfizer and
Ranbaxy also litigated a patent-infringement suit
regarding a separate drug, Accupril. Pfizer owned the
patent on Accupril, enjoying annual sales of over $500
million. Teva Pharmaceuticals first filed an ANDA
seeking approval to market a generic version of Accupril.
Ranbaxy subsequently filed an ANDA for Accupril as
well. Pfizer sued Teva, resulting in Teva being enjoined
from selling its generic until expiration of Pfizer’s
Accupril patent. Meanwhile, Ranbaxy still sought to sell
its version of generic Accupril but could not do so because
of the 180-day exclusivity period (not yet triggered)
                             29
available to Teva under the Hatch-Waxman Act. With
Teva enjoined from selling its generic Accupril and
Ranbaxy prevented from selling its generic because of
Teva’s first-filer exclusivity right, Teva and Ranbaxy
entered into an agreement through which Teva became the
exclusive distributor of Ranbaxy’s generic. The parties
agreed to split the profits from the sales, and Ranbaxy
agreed to indemnify Teva for any liability related to the
launch of its generic. Ranbaxy received approval for its
generic version of Accupril in 2004.
       Shortly after receiving that approval, Ranbaxy
launched its generic Accupril, and Pfizer brought suit
almost immediately, seeking treble damages for willful
infringement. Pfizer also sought a preliminary injunction
against Ranbaxy and Teva, informing the court that
Ranbaxy’s generic sales “decimated” its Accupril sales.
The District Court in Pfizer’s Accupril action granted the
injunction halting Ranbaxy’s generic sales, and the
Federal Circuit affirmed the grant. Pfizer Inc. v. Teva
Pharm. USA, Inc., 429 F.3d 1364, 1383 (Fed. Cir. 2005).
Pfizer posted a $200 million bond in conjunction with the
District Court’s entry of the injunction. After entry of the
injunction, Pfizer expressed confidence that it would
succeed in obtaining a substantial monetary judgment
from Ranbaxy. On June 13, 2007, in light of the disputed
Accupril patent’s expiration, the District Court vacated the
preliminary injunction. The only issues that remained
contested were Pfizer’s claims for past damages and
                            30
Ranbaxy’s counterclaim as secured by the preliminary
injunction bond.
       In March 2008, Pfizer again sued Ranbaxy in the
District of Delaware over Lipitor; this time, Pfizer claimed
that Ranbaxy’s generic Lipitor would infringe Pfizer’s two
Lipitor-related process patents. Lipitor plaintiffs contend
that this litigation was a sham because no imminent threat
of harm to Pfizer existed and because Pfizer knew
Ranbaxy’s generic would not violate those patents. They
assert that the actual purpose of Pfizer’s suit was to create
“the illusion of litigation” so that the parties could enter a
settlement agreement. Lipitor JA254 (DPP Sec. Am.
Compl. ¶ 137).
       Not long after Pfizer brought suit against Ranbaxy,
on June 17, 2008, Pfizer and Ranbaxy executed a near-
global litigation settlement—which Lipitor plaintiffs
allege constituted an unlawful reverse payment—
regarding scores of patent litigations around the world,
including the Lipitor and Accupril disputes.               The
settlement ended the Accupril litigation with prejudice,
and brought to a close not only all domestic patent
infringement litigation between Pfizer and Ranbaxy
pertaining to Lipitor, but also all foreign litigation between
the two companies over Lipitor. By the settlement’s
terms, Ranbaxy agreed to delay its entry in the generic
Lipitor market until November 30, 2011. In addition,
Pfizer and Ranbaxy negotiated similar market entry dates
for generic Lipitor in several foreign jurisdictions.
                             31
Ranbaxy also paid $1 million to Pfizer in connection with
the Accupril litigation, and Pfizer’s $200 million
injunction bond from the Accupril litigation was released.
Ranbaxy further agreed to cease its protests on the ‘995
Patent’s reissuance.     (As noted above, the PTO
subsequently issued the ‘995 Patent in March 2009.)
Although not alleged in their complaints, the settlement
also created a Canadian supply arrangement for generic
Lipitor between the parties and resolved other litigation
regarding the pharmaceutical drug Caduet.
       Ranbaxy delayed generic entry until November
2011, thus extending Pfizer’s exclusivity in the Lipitor
market twenty months beyond the expiration of the ‘893
Patent and five months beyond the expiration of what
Ranbaxy alleged was the fraudulently procured ‘995
Patent. As a result, Ranbaxy’s delayed entry created a
bottleneck in the entry of generic Lipitor from later ANDA
filers. Due to its ANDA first-filer status, Ranbaxy was
entitled to the first-filer 180-day generic market
exclusivity. Under the settlement agreement, though,
Ranbaxy would not trigger that period by entering the
generic market until November 2011. That meant that any
other would-be generic manufacturer that wanted
Ranbaxy’s 180-day period to begin earlier than November
2011 needed a court to hold that all of Pfizer’s Lipitor
patents listed in the Orange Book were invalid or not
infringed. Pfizer helped to forestall this possibility,
Lipitor plaintiffs assert, through a combination of lawsuits
                            32
against subsequent ANDA filers. The FDA ultimately
approved Ranbaxy’s Lipitor ANDA on November 30,
2011, the day Ranbaxy’s license to the unexpired Lipitor
patents with Pfizer commenced.

                             2
       Beginning in late 2011, Lipitor direct purchasers
and end payors filed separate antitrust actions in various
federal district courts. The cases were subsequently
referred to the Judicial Panel on Multidistrict Litigation
(“JPML”) for coordination. The JPML transferred each
case to the District of New Jersey, assigning the matters to
District Judge Peter G. Sheridan. See In re Lipitor
Antitrust Litig., 856 F. Supp. 2d 1355 (J.P.M.L. 2012).
       Thereafter, the direct-purchaser and end-payor
plaintiffs filed amended class action complaints; Lipitor
individual-retailer plaintiffs likewise filed complaints
joining the consolidated proceedings. The complaints
raise two substantively identical claims: (1) a
monopolization claim under Section 2 of the Sherman Act
(15 U.S.C. § 2) or a state analogue against Pfizer, asserting
that the company engaged in an overarching
anticompetitive scheme that involved fraudulently
procuring the ‘995 Patent from the PTO (Walker Process 4
fraud), falsely listing that patent in the FDA’s Orange

4
 Walker Process Equip., Inc. v. Food Mach. & Chem.
Corp., 382 U.S. 172 (1965).
                             33
Book, enforcing the ‘995 Patent and certain process
patents through sham litigation, filing a sham citizen
petition with the FDA, and entering into a reverse payment
settlement agreement with Ranbaxy; and (2) a claim under
Section 1 of the Sherman Act (15 U.S.C. § 1) or a state
analogue against both Pfizer and Ranbaxy, challenging the
settlement agreement as an unlawful restraint of trade.
      Lipitor defendants filed motions to dismiss all the
complaints under Rule 12(b)(6) of the Federal Rules of
Civil Procedure. During the pendency of those motions,
on May 16, 2013, the District Court stayed proceedings,
awaiting the Supreme Court’s decision in Actavis.
Following that decision on June 17, 2013, the District
Court reopened the case and permitted the parties to file
supplemental briefs on the pending motions to dismiss.
        On September 5, 2013, the District Court dismissed
Lipitor plaintiffs’ complaints to the extent they were based
on anything other than the reverse payment settlement
agreement. In re Lipitor Antitrust Litig., 2013 WL
4780496, at *27 (D.N.J. Sept. 5, 2013) (Lipitor I). The
Court specifically rejected the Walker Process fraud, false
Orange Book listing, sham litigation, sham FDA citizen
petition, and overall monopolistic scheme allegations
related to Lipitor plaintiffs’ monopolization claims against
Pfizer. Id. at *15–23. However, the Court granted leave
to file amended complaints focused solely on the reverse
payment settlement agreement between Pfizer and
Ranbaxy. Id. at *25–27.
                            34
       Lipitor plaintiffs filed amended complaints in
October 2013. The direct purchasers and end payors
attached their prior complaints as exhibits to their new
complaints to preserve the allegations that had been
dismissed for appeal. Similarly, the independent retailers
stated in the first paragraph of their new complaints that
they were also preserving the previously dismissed
allegations. In November 2013, Lipitor defendants moved
to dismiss the amended complaints.
       On September 12, 2014, the District Court
dismissed the direct purchaser’s amended complaint with
prejudice, rejecting the remaining allegations relating to
the reverse payment settlement agreement between Pfizer
and Ranbaxy. In re Lipitor Antitrust Litig., 46 F. Supp. 3d
523 (D.N.J. 2014) (Lipitor II). The complaints of the end
payor and individual retailers were dismissed that same
day in light of the District Court’s dismissal of the direct
purchasers’ complaint.
      On October 10, 2014, the direct purchasers filed a
motion to amend the judgment and for leave to file an
amended complaint, contending that the District Court
applied “a new, heightened pleading standard.” Lipitor
JA151. That motion was denied on March 16, 2015.
These timely appeals followed.

                             B
      In In re Effexor XR Antitrust Litigation, Nos. 15-
                            35
1184 et al., plaintiffs are a putative class of direct
purchasers of branded Effexor XR, a putative class of end
payors, two individual third-party payors, and several
individual retailers asserting direct-purchaser claims. We
will refer to these parties collectively as the “Effexor
plaintiffs.”     Defendants are Wyeth, Inc., Teva
Pharmaceutical Industries Ltd., and their respective
corporate affiliates. We will likewise refer to these parties
collectively as the “Effexor defendants.” As with the
Lipitor appeals, we proceed by outlining the factual
background behind these consolidated appeals and then
describing their procedural history.
                             1
       Effexor is a brand-name drug used to treat
depression. In 1985, the PTO issued American Home
Products, Wyeth’s predecessor, a patent for Effexor’s
active     ingredient—the     compound     venlafaxine
hydrochloride. The patent for that compound expired on
June 13, 2008.
       In 1993, the FDA granted Wyeth approval to begin
marketing Effexor, which Wyeth did with respect to an
instant-release version of the drug (or “Effexor IR”). Four
years later, the FDA granted Wyeth approval for Effexor
XR, an extended-release, once-daily version of the drug.
Wyeth obtained three patents for Effexor XR, all of which
expired on March 20, 2017. Effexor plaintiffs contend that
Wyeth obtained the Effexor XR patents through fraud on
                             36
the PTO, improperly listed those patents in the FDA’s
Orange Book, and enforced those patents through serial
sham litigation.5
        On December 10, 2002, Teva obtained ANDA first-
filer status for a generic version of Effexor XR. Teva’s
ANDA included paragraph IV certifications, asserting that
Teva’s sale, marketing, or use of generic Effexor would
not infringe Wyeth’s patents or that those patents were
invalid or unenforceable. As the first company to file an
ANDA with a paragraph IV certification for generic
Effexor XR, Teva was entitled to the Hatch-Waxman
Act’s 180-day period of marketing exclusivity. Within the
45-day period prescribed by the Hatch-Waxman Act,
Wyeth brought suit against Teva for patent infringement
in the District of New Jersey.
      In October 2005, shortly after the District Court
held a Markman6 hearing on patent claim construction,
Wyeth and Teva reached a settlement. Effexor plaintiffs
allege that the District Court’s ruling at the Markman
hearing spurred the parties to reach a settlement

5
  As explained below, the District Court did not dismiss
Effexor plaintiffs’ allegations related to Wyeth’s
fraudulent procurement and enforcement of the Effexor
patents. Because those allegations are thus not at issue on
appeal, we do not detail them here.
6
  Named after Markman v. Westview Instruments, Inc.,
517 U.S. 370 (1996).
                            37
agreement, as Wyeth feared that it would lose the
litigation. A loss would have enabled other generic
manufacturers to then enter the Effexor XR market. Under
the terms of the settlement, Wyeth and Teva agreed to
vacate the Markman ruling. They further agreed to a
market entry date of July 1, 2010, for Teva’s generic
Effexor XR, nearly seven years before the expiration of
Wyeth’s patents. Wyeth further agreed that it would not
market an authorized-generic Effexor XR during Teva’s
180-day exclusivity period (the “no-AG agreement”).
Effexor plaintiffs allege that Wyeth’s promise to stay out
of the generic Effexor XR market was worth more than
$500 million, observing that Teva would gain all the sales
of generic Effexor XR during Teva’s generic exclusivity
period. Wyeth also agreed to allow Teva to sell a generic
version of Wyeth’s Effexor IR before the original patent
for Effexor expired in June 2008, and Wyeth promised not
to launch an authorized generic to compete with Teva’s
instant-release generic.
       In return, and in addition to the delayed entry date
for generic Effexor XR, Teva agreed to pay royalties to
Wyeth. With regard to its generic Effexor XR sales, Teva
would pay Wyeth royalties beginning at 15% during its
180-day exclusivity period. If Wyeth chose not to
introduce an authorized generic after 180 days and no
other generic entered the market, Teva was required to pay
Wyeth 50% royalties for the next 180 days and 65%
royalties thereafter for up to 80 months. As to Teva’s sales
                            38
of generic Effexor IR, Teva agreed to pay Wyeth 28%
royalties during the first year and 20% during the second
year.
       In November 2005, Wyeth and Teva filed the
settlement agreement with the District Court presiding
over the patent-infringement litigation. As required by a
2002 consent decree, Wyeth submitted the agreement to
the Federal Trade Commission (“FTC”), which possessed
the right to weigh in on and raise objections to Wyeth’s
settlements. The FTC offered no objection but reserved
its right to take later action. The settlement was also
submitted to the U.S. Department of Justice, and again to
the FTC, pursuant to Section 1112 of the Medicare
Prescription Drug, Improvement, and Modernization Act
of 2003 (“MMA”), Pub. L. No. 108-173, 117 Stat. 2066,
2461–63 (2003) (codified at 21 U.S.C. § 355 note). The
District Court thereafter entered orders vacating its prior
Markman rulings, dismissing the case, and adopting in
summary fashion the terms of the settlement as a consent
decree and permanent injunction. Effexor JA1298.7
       Following the Wyeth-Teva settlement, between
April 2006 and April 2011, Wyeth brought patent-
infringement suits against sixteen other companies that
sought to market a generic version of Effexor XR. Each

7
 We refer to the joint appendix in the Effexor consolidated
appeals as “Effexor JA.”
                            39
lawsuit ended in settlement and without a court order
regarding the validity or enforceability of Wyeth’s patents.

                             2
       Beginning in May 2011, several direct purchasers
of Effexor XR filed class action complaints raising various
antitrust claims in the U.S. District Court for the Southern
District of Mississippi. Those cases were consolidated
and, on September 21, 2011, that Court transferred the
action to District Judge Peter G. Sheridan in the U.S.
District Court for District of New Jersey.
       After the consolidation and transfer, the direct
purchasers filed an amended consolidated class action
complaint, a group of end payors joined the case with a
consolidated class action complaint, several individual
retailers filed complaints, and two individual third-party
payors together filed their own complaint. As with the
consolidated Lipitor appeals, their complaints each raise
two substantively identical claims: (1) a monopolization
claim under Section 2 of the Sherman Act (15 U.S.C. § 2)
or a state analogue against Wyeth, asserting that Wyeth
fraudulently induced the PTO to issue the three patents
covering Effexor XR (Walker Process fraud), improperly
listed those patents in the Orange Book, enforced those
patents through serial sham litigation, and entered into a
reverse payment settlement with Teva; and (2) a claim
under Section 1 of the Sherman Act (15 U.S.C. § 1) or a
state analogue against both Wyeth and Teva, alleging the
                            40
reverse payment settlement agreement between them was
an unlawful restraint of trade.8
      In April 2012, Effexor defendants filed motions to
dismiss under Rule 12(b)(6). During the pendency of
those motions, the District Court stayed proceedings in
October 2012 pending the Supreme Court’s decision in
Actavis. Following the Actavis ruling, the District Court
vacated the stay, reopened the case, and called for
supplemental briefing on the pending motions to dismiss.
On October 23, 2013, the direct purchasers (but no other
party) filed an amended complaint. That amended
complaint was met with a renewed motion to dismiss.
       On October 6, 2014, the District Court granted in
part and denied in part Effexor defendants’ motions to
dismiss. In re Effexor XR Antitrust Litig., No. CIV.A. 11-
5479 PGS, 2014 WL 4988410 (D.N.J. Oct. 6, 2014). It
granted the motions to dismiss, with prejudice, as to
Effexor plaintiffs’ challenges to the reverse payment
settlement agreement between Wyeth and Teva under
Section 1 of the Sherman Act (or its state analogue). Id.
at *19–24. The District Court denied the motions as they
related to the remaining allegations of Effexor plaintiffs
against Wyeth. Id. at *24–26. At Effexor plaintiffs’
request, the District Court directed entry of a final
judgment as to the Section 1 claims (or their state

8
 The individual third-party payors’ operative complaint
names only Wyeth and its affiliates as defendants.
                           41
analogues) against Wyeth and Teva under Rule 54(b) of
the Federal Rules of Civil Procedure. These timely
appeals followed.

                             III

      The District Court had subject-matter jurisdiction
with respect to the Lipitor and Effexor direct purchasers
and independent retailers under 28 U.S.C. §§ 1331 and
1337(a), the Lipitor and Effexor end payors under 28
U.S.C. § 1332(d), and the Effexor independent third-party
payors under 28 U.S.C. § 1332(a)(3).
        We have appellate jurisdiction pursuant to 28
U.S.C. § 1291. In April 2017, this Court concluded that
the Lipitor and Effexor consolidated actions did not “arise
under” patent law and consequently denied Lipitor and
Effexor plaintiffs’ request for a transfer to the U.S. Court
of Appeals for the Federal Circuit. In re Lipitor Antitrust
Litig., 855 F.3d at 145–46; see also 28 U.S.C. § 1338(a)
(providing district courts with original jurisdiction over
actions “arising under” federal patent law); 28 U.S.C.
§ 1295(a) (providing the U.S. Court of Appeals for the
Federal Circuit with “exclusive jurisdiction” over “an
appeal from a final decision . . . in any civil action arising
under” federal patent law). Appellate jurisdiction,
therefore, is proper in this Court, not the Federal Circuit.
      We review dismissals under Rule 12(b)(6) of the
Federal Rules of Civil Procedure de novo. See Phillips v.
                             42
County of Allegheny, 515 F.3d 224, 230 (3d Cir. 2008).
We accept all factual allegations in the complaint as true
and, examining for plausibility, “determine whether,
under any reasonable reading of the complaint, the
plaintiff may be entitled to relief.” Bronowicz v. Allegheny
County, 804 F.3d 338, 344 (3d Cir. 2015) (quoting Powell
v. Weiss, 757 F.3d 338, 341 (3d Cir. 2014)). As part of
that review, we may consider documents “integral to or
explicitly referred to in the complaint” without turning a
motion to dismiss into a motion for summary judgment.
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014)
(quoting In re Burlington Coat Factory Sec. Litig., 114
F.3d 1410, 1426 (3d Cir. 1997)).
       With allegations of fraud, “a party must state with
particularity the circumstances constituting fraud or
mistake,” although “intent, knowledge, and other
conditions of a person’s mind may be alleged generally.”
Fed. R. Civ. P. 9(b); see also U.S. ex rel. Moore & Co.,
P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294, 307
(3d Cir. 2016) (“A plaintiff alleging fraud must therefore
support its allegations ‘with all of the essential factual
background that would accompany the first paragraph of
any newspaper story—that is, the who, what, when, where
and how of the events at issue.’” (quoting In re Rockefeller
Ctr. Props., Inc. Securities Litig., 311 F.3d 198, 217 (3d
Cir. 2002))); In re DDAVP Direct Purchaser Antitrust
Litig., 585 F.3d 677, 695 (2d Cir. 2009) (requiring that
allegations of fraudulent procurement of a patent be pled
                            43
with particularity). In doing so, “a party must plead [its]
claim with enough particularity to place defendants on
notice of the ‘precise misconduct with which they are
charged.’” United States ex rel. Petras v. Simparel, Inc.,
857 F.3d 497, 502 (3d Cir. 2017) (quoting Lum v. Bank of
Am., 361 F.3d 217, 223–24 (3d Cir. 2004), abrogated on
other grounds by Bell Atl. Corp. v. Twombly, 550 U.S.
544, 557 (2007)).

                             IV
       In F.T.C. v. Actavis, the Supreme Court held that
reverse payments made pursuant to settlement agreements
(“reverse payment settlement agreements”) may give rise
to antitrust liability. 133 S. Ct. at 2227. Often arising from
pharmaceutical drug litigation, reverse payment
settlement agreements operate counter to conventional
settlement norms.            As traditionally understood,
settlements involve an agreement by a defendant (i.e., a
patent infringer in the pharmaceutical drug context) to pay
a plaintiff (i.e., the patentee) to end a lawsuit. A reverse
payment settlement agreement instead “requires the
patentee to pay the alleged infringer,” in return for the
infringer’s agreement not to produce the patented item. Id.
To make that abstract explanation more concrete, the
Supreme Court gave the following unadorned example:
“Company A sues Company B for patent infringement.
The two companies settle under terms that require (1)
Company B, the claimed infringer, not to produce the
patented product until the patent’s term expires, and (2)
                             44
Company A, the patentee, to pay B many millions of
dollars.” Id.
       Prior to Actavis, several courts had held that such
settlement agreements “were immune from antitrust
scrutiny so long as the asserted anticompetitive effects fell
within the scope of the patent.” King Drug Co., 791 F.3d
at 399. That categorical rule, known as the “scope of the
patent” test, relied on the premise that, because a patentee
possesses a lawful right to keep others out of its market,
the patentee may also enter into settlement agreements
excluding potential patent challengers from entering that
market. Actavis, 133 S. Ct. at 2230.
       The Supreme Court rejected that approach. Its main
concern was the use of reverse payments “to avoid the risk
of patent invalidation or a finding of noninfringement.”
Id. at 2236. It reasoned that “to refer . . . simply to what
the holder of a valid patent could do does not by itself
answer the antitrust question. The patent . . . may or may
not be valid, and may or may not be infringed.” Id. at
2230–31. Therefore, “determin[ing] antitrust legality by
measuring the settlement’s anticompetitive effects solely
against patent law policy, rather than by measuring them
against procompetitive antitrust policies as well,” would
be “incongruous.” Id. at 2231. Instead, “patent and
antitrust policies are both relevant in determining the
‘scope of the patent monopoly’—and consequently
antitrust law immunity—that is conferred by a patent.” Id.
Hence, patent-related “reverse payment settlements . . .
                             45
can sometimes violate the antitrust laws[.]” King Drug
Co., 791 F.3d at 399 (first alteration in original) (quoting
Actavis, 133 S. Ct. at 2227).
        In determining that reverse payment settlement
agreements may violate antitrust laws, the Supreme Court
offered limited guidance as to when such settlements
should be subject to antitrust scrutiny. It exempted
“commonplace forms” of settlement from scrutiny.
Actavis, 133 S. Ct. at 2233. One such settlement is a
payment where “a party with a claim (or counterclaim) for
damages receives a sum equal to or less than the value of
its claim.” Id. at 2233 (“[W]hen Company A sues
Company B for patent infringement and demands, say,
$100 million in damages, it is not uncommon for B (the
defendant) to pay A (the plaintiff) some amount less than
the full demand as part of the settlement—$40 million, for
example.”). Another such settlement is a payment by a
plaintiff (i.e., the patent holder) settling a counterclaim
made by a defendant (i.e., the alleged patent infringer). Id.
(“[I]f B has a counterclaim for damages against A, the
original infringement plaintiff, A might end up paying B
to settle B’s counterclaim.”).
        In contrast to those commonplace forms of
settlement, a reverse payment in pharmaceutical drug
litigation occurs when “a party with no claim for damages
(something that is usually true of a paragraph IV litigation
defendant) walks away with money simply so it will stay
away from the patentee’s market.” Id. At base, reverse
                             46
payments violate antitrust law when they unjustifiably
seek “to prevent the risk of competition.” Id. at 2236. “If
the basic reason [for the payment] is a desire to maintain
and to share patent-generated monopoly profits, then, in
the absence of some other justification, the antitrust laws
are likely to forbid the arrangement.” Id. at 2237; see also
id. at 2236 (“[T]he payment (if otherwise unexplained)
likely seeks to prevent the risk of competition. And, as we
have said, that consequence constitutes the relevant
anticompetitive harm.”). Stated differently, a reverse
payment may demonstrate “that the patentee seeks to
induce the . . . challenger to abandon its claim with a share
of its monopoly profits that would otherwise be lost in the
competitive market.” Id. at 2235.
       Reverse payment settlement agreements give rise to
those antitrust concerns—that is, the concern that a
settlement seeks “to eliminate risk of patent invalidity or
noninfringement,” King Drug Co., 791 F.3d at 411—when
the payments are both “large and unjustified.” Actavis,
133 S. Ct. at 2237.
      Consideration of the size of the reverse payment
serves at least two functions in assessing that payment’s
lawfulness. First, the Supreme Court observed that a large
reverse payment may indicate that “the patentee likely
possesses the power to bring [an unjustified
anticompetitive] harm about in practice.” Id. at 2236; see
also King Drug Co., 791 F.3d at 403 (“[T]he size of a
reverse payment may serve as a proxy for [the power to
                             47
bring about anticompetitive harm] because a firm without
such power (and the supracompetitive profits that power
enables) is unlikely to buy off potential competitors.”).
That is, a large reverse payment may signal that the
patentee possessed “the power to charge prices higher than
the competitive level” and may be using that power to
keep others from entering its market. Actavis, 133 S. Ct.
at 2236. Second, a large reverse payment may signify that
the payment seeks to avoid invalidation of the disputed
underlying patent. Id. at 2236. A patent holder may be
concerned about the validity of its patent, and so the size
of the payment may very well correspond with the
magnitude of that concern. See id. at 2236–37 (“In a word,
the size of the unexplained reverse payment can provide a
workable surrogate for a patent’s weakness . . . .”).
        The justifications underlying the reverse payment
also play a role in determining whether that payment will
give rise to antitrust liability. The Supreme Court
observed, on the one hand, that “[w]here a reverse
payment reflects traditional settlement considerations, . . .
there is not the same concern [as with other reverse
payments] that a patentee is using its monopoly profits to
avoid the risk of patent invalidation or a finding of
noninfringement.”       Id. at 2236.     Those legitimate
justifications for a reverse payment include those where
the payment is “a rough approximation of the litigation
expenses saved through settlement” or a reflection of
“compensation for other services the generic has promised
                             48
to perform.” Id. The Supreme Court did not exclude other
possible legitimate explanations from also justifying
reverse payment settlement agreements. Id. On the other
hand, in the absence of a legitimate justification or
explanation, the reverse payment “likely seeks to prevent
the risk of competition” in that its “objective is to maintain
supracompetitive prices to be shared among the patentee
and the challenger rather than face what might have been
a competitive market.” Id.
        “In sum, a reverse payment, where large and
unjustified, can bring with it the risk of significant
anticompetitive effects . . . .” Id. at 2237. Therefore, to
survive a motion to dismiss when raising an antitrust
violation under Actavis, “plaintiffs must allege facts
sufficient to support the legal conclusion that the
settlement at issue involves a large and unjustified reverse
payment under Actavis.” In re Loestrin 24 Fe Antitrust
Litig., 814 F.3d 538, 552 (1st Cir. 2016). If plaintiffs do
so, they may proceed to prove their allegations under the
traditional antitrust rule-of-reason analysis. See Actavis,
133 S. Ct. at 2237.
       Since Actavis, this Court has had occasion to assess
the plausibility of allegations raising an unlawful reverse
payment settlement agreement. In King Drug Co. of
Florence, Inc. v. SmithKline Beecham Corp., we reached
two conclusions relevant here regarding the parameters of
antitrust claims brought under Actavis.

                             49
       First, we held that a reverse payment underlying an
Actavis antitrust claim need not be in cash form. 791 F.3d
at 403–09. The allegedly unlawful reverse payment took
the form of a “no-AG agreement,” a brand-name
manufacturer’s promise not to produce an authorized
generic to compete with the generic manufacturer. Id. at
397. There, the direct purchasers of a drug (Lamictal)
sued both GlaxoSmithKline (GSK), the brand-name
manufacturer, and Teva, the generic manufacturer, for
violating Sections 1 and 2 of the Sherman Act. Id. at 393.
The direct purchasers alleged that GSK and Teva entered
into an agreement settling GSK’s patent infringement suit,
which contained a no-AG agreement. Id. at 397. The no-
AG agreement provided that GSK would not produce an
authorized generic version of Lamictal for 180 days after
Teva started marketing its generic. Id. The King Drug Co.
plaintiffs argued that the no-AG agreement could
constitute an anticompetitive reverse payment under
Actavis because it worked to maintain supracompetitive
prices in the Lamictal market. Id. at 397, 410. We agreed,
holding “that a no-AG agreement, when it represents an
unexplained large transfer of value from the patent holder
to the alleged infringer, may be subject to antitrust scrutiny
under the rule of reason.” Id. at 403.
       We also determined that the plaintiffs in King Drug
Co. plausibly alleged that the no-AG agreement was a
large and unjustified reverse payment sufficient to support
antitrust scrutiny under Actavis. Id. at 409–10. The
                             50
allegations giving rise to antitrust review were that (1)
“GSK agreed not to launch a competing authorized
generic during Teva’s 180-day exclusivity period”; (2)
“GSK had an incentive to launch its own authorized
generic versions of tablets”; (3) GSK’s promise could be
“worth many millions of dollars of additional revenue”;
(4) “Teva had a history of launching ‘at risk’”; and (4) the
relevant “patent was likely to be invalidated.” Id. Given
those allegations, we reasoned that the complaint plausibly
alleged that the reverse payment was large and unjustified
and attempted to prevent the risk of competition through
the sharing of monopoly profits: “Because marketing an
authorized generic was allegedly in GSK’s economic
interest, its agreement not to launch an authorized generic
was an inducement—valuable to both it and Teva—to
ensure a longer period of supracompetitive monopoly
profits based on a patent at risk of being found invalid or
not infringed.” Id. at 410.
        In reaching that conclusion, we specifically rejected
GSK and Teva’s argument that the reverse payment was
justified because Teva was given permission in the
settlement agreement to enter a different pharmaceutical
drug market early. We observed that, according to the
complaint, the early-entry provision allowed access to a
market worth “only $50 million annually,” which “was
orders of magnitude smaller than the alleged $2 billion . . .
market the agreement is said to have protected.” Id. The
early-entry provision thus failed to justify the large reverse
                             51
payment from the patentee GSK to the alleged infringer
Teva. Id. Because the complaint in King Drug Co.
plausibly alleged a large and unjustified reverse payment,
the plaintiffs there could proceed to prove their claim
through “the traditional rule-of-reason approach.” Id. at
411; see also id. at 412 (providing a three-step rule-of-
reason approach by which antitrust plaintiffs could
demonstrate that the reverse payment settlement
agreement imposed an unreasonable restraint on
competition).
      Applying Actavis and King Drug Co., we next
address whether the complaints in the Lipitor and Effexor
consolidated appeals plausibly allege an actionable
reverse payment settlement agreement.

                            A
       We conclude that Lipitor plaintiffs have plausibly
pled an unlawful reverse payment settlement agreement. 9
Their allegations sufficiently allege that Pfizer agreed to
release the Accupril claims against Ranbaxy, which were
likely to succeed and worth hundreds of millions of

9
  This conclusion renders unnecessary the need to address
the Lipitor direct purchasers’ argument that they should be
granted leave to submit a new complaint with economic
calculations to bolster their allegations of an unlawful
reverse payment.
                            52
dollars, in exchange for Ranbaxy’s delay in the release of
its generic version of Lipitor.
       As part of their effort to allege an unlawful reverse
payment settlement agreement, Lipitor plaintiffs plead,
among other factual averments, the following: Ranbaxy
launched a generic version of Pfizer’s brand drug Accupril
“at risk,” Lipitor JA257 (DPP Sec. Am. Compl. ¶ 149);
Pfizer had annual Accupril sales over $500 million prior
to Ranbaxy’s launch, id.; Pfizer brought suit and sought to
enjoin Ranbaxy’s generic sales, Lipitor JA260 (DPP Sec.
Am. Compl. ¶ 160); the District Court granted the
injunction halting Ranbaxy’s sales of generic Accupril,
which the Federal Circuit affirmed, Pfizer Inc. v. Teva
Pharm. USA, Inc., 429 F.3d 1364, 1383 (Fed. Cir. 2005);
Pfizer posted “a $200 million bond in conjunction with”
the injunction and informed the Court that Ranbaxy’s
generic sales “decimated” its Accupril sales, Lipitor
JA260 (DPP Sec. Am. Compl. ¶ 160); more specifically,
Pfizer’s Accupril sales dropped from $525 million in 2004
to $71 million in 2005 following Ranbaxy’s launch of the
generic version of Accupril, Lipitor JA260 (DPP Sec. Am.
Compl. ¶ 160); Pfizer’s suit was likely to be successful,
Lipitor JA262–63 (DPP Sec. Am. Compl. ¶¶ 167–70); and
Pfizer itself made statements about Ranbaxy’s exposure,
estimating that Ranbaxy faced “very, very substantial
damages in the way of lost profits,” Lipitor JA263 (DPP
Sec. Am. Compl. ¶ 170).

                            53
       Despite the large expected damages arising from the
Accupril suit and the high likelihood of its success, Pfizer
subsequently released its Accupril claims as part of a
settlement agreement with Ranbaxy. Ranbaxy paid $1
million to Pfizer in connection with the Accupril litigation
and also agreed to the release of Pfizer’s $200 million
injunction bond. Lipitor plaintiffs allege that the release
of the Accupril claims was unjustified, as the release of
potential liability in Accupril “far exceeded” any of
Pfizer’s saved litigation costs or any services provided by
Ranbaxy. Lipitor JA265 (DPP Sec. Am. Compl. ¶¶ 180,
285). Pfizer’s alleged agreement to release the Accupril
claims, therefore, “was an inducement—valuable to both
it and [Ranbaxy]—to ensure a longer period of
supracompetitive monopoly profits based on [the Lipitor
patent, which was] at risk of being found invalid or not
infringed.” King Drug Co., 791 F.3d at 410. Those
allegations sufficiently plead that the value of the Accupril
claims was large and their release was unjustified. See
Actavis, 133 S. Ct. at 2236 (“[T]he payment (if otherwise
unexplained) likely seeks to prevent the risk of
competition. . . . [T]hat consequence constitutes the
relevant anticompetitive harm.”).
       Notwithstanding Lipitor plaintiffs’ allegations, the
District Court determined their complaints were wanting.
It required that they plead a “reliable” monetary estimate
of the dropped Accupril claims so that they “may be
analyzed against the Actavis factors” to determine whether
                             54
the value of those claims “is ‘large’ once the subtraction
of legal fees and other services provided by generics
occurs.” See Lipitor II, 46 F. Supp. 3d at 543. That
“reliable” monetary estimate, according to the Court,
necessitated a series of calculations: a valuation of Pfizer’s
damages in the Accupril litigation incorporating both
Pfizer’s probability of success in that action and an
estimation of Pfizer’s lost profits; a discounting of Pfizer’s
damages based on its saved litigation costs and Pfizer’s
various litigation risks; and an accounting of various other
provisions within the settlement agreement, including the
arrangement to allow Ranbaxy into several foreign
markets, the parties’ agreement resolving other
pharmaceutical litigation, and a supply arrangement
between Ranbaxy and Pfizer related to generic Lipitor
sales in Canada. Without these various calculations, the
District Court determined that Lipitor plaintiffs had failed
to allege a plausible large and unjustified reverse payment
under Actavis.
       Lipitor defendants largely echo the reasoning of the
District Court. Their contentions broadly fall into two
categories. First, and similar to the District Court, Lipitor
defendants maintain that, even if the settlement could be
characterized as an unlawful reverse payment, Lipitor
plaintiffs insufficiently alleged the payment was “large”
and “unjustified.” Second, they argue that the settlement
here was no more than the sort of commonplace settlement

                             55
that the Supreme Court excluded from antitrust scrutiny.
Neither of these arguments withstands careful review.
       Both the District Court and Lipitor defendants offer
a heightened pleading standard contrary to Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009). Twombly and Iqbal require
only plausibility, a standard “not akin to a ‘probability
requirement.’” Iqbal, 556 U.S. at 678. While Twombly
and Iqbal require that “[f]actual allegations . . . be enough
to raise a right to relief above the speculative level,”
Twombly, 550 U.S. at 555, “those cases make it clear that
a claimant does not have to ‘set out in detail the facts upon
which he bases his claim.’” Covington v. Int’l Ass’n of
Approved Basketball Officials, 710 F.3d 114, 118 (3d Cir.
2013) (quoting Twombly, 550 U.S. at 555 n.3); see also
Connelly v. Lane Const. Corp., 809 F.3d 780, 786 (3d Cir.
2016) (“[D]etailed pleading is not generally required.”).
       Applying that pleading standard, neither the
Supreme Court in Actavis nor this Court in King Drug Co.
demanded the level of detail the District Court and Lipitor
defendants would require. For its part, the Supreme Court
in Actavis was deliberately opaque about the parameters
of reverse payment antitrust claims. We take note, though,
of the allegations in Actavis regarding the size of the
reverse payment. There, the FTC alleged simply that a
patentee “agreed to pay [a generic manufacturer] $10
million per year for six years,” “agreed to pay [another
generic manufacturer] $2 million per year for six years,”
                             56
and “projected that it would pay [a third generic
manufacturer] about $19 million during the first year of its
agreement, rising to over $30 million annually by the end
of the deal.” Second Amended Complaint for Injunctive
and Other Equitable Relief ¶¶ 66, 77, In re Androgel
Antitrust Litig., No. 1:09-CV-00955-TWT (N.D. Ga. May
28, 2009), ECF No. 134. The FTC’s complaint did not
preemptively negate justifications for the reverse
payments. It simply alleged that the payments were meant
to, and did, induce delay of likely successful patent
challenges through the sharing of monopoly profits. Id.
¶¶ 67, 86; see also Actavis, 133 S. Ct. at 2229. The
Supreme Court did not require the advanced valuations
asked for by Lipitor defendants and required by the
District Court.
       Perhaps equally striking in their simplicity are the
allegations we concluded were sufficient to state an
Actavis claim in King Drug Co. There, we elucidated no
special valuation requirement in examining the alleged
reverse payment. Rather, the allegations were simply that
a no-AG agreement provided the alleged infringer with
“many millions of dollars of additional revenue” and that
the patentee otherwise had “an incentive to launch its own
authorized generic.” King Drug Co., 791 F.3d at 409–10.
The no-AG agreement resultantly induced the alleged
infringer to agree to delay the launch of its generic drug
that would compete with the patentee’s drug, which

                            57
purportedly relied on an invalid patent. Id. Nothing more
was necessary to plausibly plead a claim under Actavis.
        The allegations here, as outlined above, easily
match, if not exceed, the level of specificity and detail of
those in Actavis and King Drug Co. The alleged reverse
payment here was “large” enough to permit a plausible
inference that Pfizer possessed the power to bring about
an unjustified anticompetitive harm through its patents and
had serious doubts about the ability of those patents to
lawfully prevent competition.10 Actavis, 133 S. Ct. at
2236. Pfizer purportedly suffered hundreds of millions of
dollars in lost sales following Ranbaxy’s entry into the
Accupril market. Lipitor JA260 (DPP Sec. Am. Compl.
¶ 160). Upon suing Ranbaxy, Pfizer sought treble
damages, Lipitor JA263–64 (DPP Sec. Am. Compl. ¶¶
159, 172–74), and posted a $200 million bond to secure an
injunction, “demonstrating that Pfizer placed great value
on preserving its Accupril franchise,” Lipitor JA260 (DPP
Sec. Am. Compl. ¶ 160). That claim had some likelihood
of success given the entry of the injunction, which was
affirmed on appeal. See Pfizer, 429 F.3d at 1383. Pfizer
itself told shareholders that it was likely to succeed on the
merits of the case. Lipitor JA263 (DPP Sec. Am. Compl.

10
  Notably, Lipitor plaintiffs do not allege the size or value
of Pfizer’s grant to Ranbaxy of early access into several
foreign markets for Lipitor.

                             58
¶ 170). Despite those losses and the likely success of that
litigation against Ranbaxy, Pfizer released its claim worth
“hundreds of millions of dollars.” JA264 (DPP Sec. Am.
Compl. ¶ 175). Those allegations sufficiently allege a
large reverse payment; more detailed, advanced
calculations related to those allegations may come later. 11

11
   As explained infra, not only does Lipitor defendants’
request for detailed economic analyses go beyond what is
required at this stage of the litigation, but that request also
attempts to require Lipitor plaintiffs to disprove what
Lipitor defendants must prove. Lipitor defendants suggest
that the size of the reverse payment must be determined by
the net reverse payment, which accounts for litigation
costs and other discounting measures and justifications for
the payment. In doing so, Lipitor defendants seem to
conflate the Actavis requirement that the reverse payment
be “large” with the requirement that the payment be
“unjustified.”      Their proposed economic valuation
demands that Lipitor plaintiffs disprove proffered
justifications for the reverse payment settlement
agreement. Lipitor plaintiffs, though, need not do so at the
pleading stage. Actavis, 133 S. Ct. at 2236 (“An antitrust
defendant may show in the antitrust proceeding that
legitimate justifications are present, thereby explaining the
presence of the challenged term and showing the
lawfulness of that term under the rule of reason.”
(emphasis added)).
                              59
       The alleged reverse payment here was also
“unjustified.” As noted earlier, avoiding litigation costs,
providing payment for services, or other consideration
may justify a large reverse payment. See Actavis, 133 S.
Ct. at 2236. To plausibly allege an unjustified reverse
payment, an antitrust plaintiff need only allege the absence
of a “convincing justification” for the payment. Id. at
2236–37 (observing that, if such considerations are
present, “there is not the same concern that a patentee is
using its monopoly profits to avoid the risk of patent
invalidation or a finding of noninfringement”); see also
King Drug Co., 791 F.3d at 412 (observing that, in the first
step of the rule-of-reason analysis, a plaintiff must “prove
a payment for delay, or, in other words, payment to
prevent the risk of competition,” and then citing Actavis
for the proposition that the “likelihood of a reverse
payment bringing about anticompetitive effects” depends
on its size, anticipated litigation costs, its independence
from other services rendered, and other justifications).
        Lipitor plaintiffs’ complaints state that the value of
the released Accupril claims “far exceed[s] any litigation
costs (in any or all cases) Pfizer avoided by settling.”
Lipitor JA265 (DPP Sec. Am. Compl. ¶ 180). While
Lipitor defendants speculate as to the actual saved
litigation costs, all that need be alleged, at this juncture, is
that those costs fail to explain the hundreds of millions of
dollars of liability released by Pfizer. Lipitor plaintiffs
have alleged just that, and the finely calibrated litigation
                              60
cost estimates requested by Lipitor defendants and the
District Court are unnecessary at this stage in the
litigation.
        Lipitor defendants also argue that the alleged
reverse payment was pled out of context, as the Accupril
litigation settlement was part of a larger, global settlement
agreement between Pfizer and Ranbaxy. Specifically,
they point out that the complaints do not address other
aspects of the settlement agreement, namely a supply
arrangement in Canada and resolution of litigation over
another pharmaceutical drug, Caduet.12 They are correct
that the complaints make little mention of those aspects of

12
    The Lipitor parties differ as to whether, under the
Sherman Act, foreign or out-of-market procompetitive
effects of the settlement agreement, like the Canadian
supply arrangement and settlement of the Caduet
litigation, can justify the domestic or in-market
anticompetitive effects of the settlement, namely
Ranbaxy’s delayed entry into the U.S. Lipitor market. We
need not decide that issue, as Lipitor plaintiffs have, at
least at this point in the litigation, plausibly alleged the
absence of justifications for the reverse payment. See
King Drug Co., 791 F.3d at 410 n.34 (“It may also be
(though we do not decide) that procompetitive effects in
one market cannot justify anticompetitive effects in a
separate market.” (citation and quotation marks omitted)).
                             61
the settlement. We disagree that the absence of those
allegations is fatal.
        Lipitor defendants have the burden of justifying the
rather large reverse payment here, and they offer no reason
why those other elements of the settlement agreement do
so. Actavis does not require antitrust plaintiffs to come up
with possible explanations for the reverse payment and
then rebut those explanations in response to a motion to
dismiss. The Supreme Court clearly placed the onus of
explaining or justifying a large reverse payment on
antitrust defendants. In examining allegations of a reverse
payment at the pleading stage, the Supreme Court
acknowledged that, even if there is an explanation for a
reverse payment, “that possibility d[id] not justify
dismissing the [antitrust plaintiff’s] complaint.         An
antitrust defendant may show in the antitrust proceeding
that legitimate justifications are present, thereby
explaining the presence of the challenged term and
showing the lawfulness of that term under the rule of
reason.” Id. at 2236 (emphasis added). The Supreme
Court emphasized this point later, in Actavis, stating that
the “one who makes [the reverse] payment” needs “to
explain and to justify it.” Id. at 2237. We noted as much
in King Drug Co., where we observed that the antitrust
defendant has the burden “to show ‘that legitimate
justifications are present, thereby explaining the presence
of the challenged term and showing the lawfulness of that
term under the rule of reason.’” 791 F.3d at 412 (quoting
                            62
Actavis, 133 S. Ct. at 2235–36); see also In re Niaspan
Antitrust Litig., 42 F. Supp. 3d 735, 753 (E.D. Pa. 2014)
(“While it is possible that defendants will be able to supply
evidence to rebut plaintiffs’ allegations regarding the true
value of the services . . . , Twombly does not require an
antitrust plaintiff to plead facts that, if true, definitively
rule out all possible innocent explanations.”). Here,
Lipitor plaintiffs sufficiently alleged the absence of a
convincing justification for the reverse payment and were
not required to plead more than that.
       Our conclusion here is consistent with the
persuasive decisions of other courts facing similar
challenges to pleadings raising an antitrust claim under
Actavis. For example, in In re Loestrin 24 Fe Antitrust
Litigation, a patentee entered into a no-AG agreement with
a generic manufacturer, providing the generic
manufacturer with favorable promotion deals in exchange
for the generic manufacturer’s delaying entry into the
patentee’s market. 814 F.3d at 541. Addressing the
specificity necessary for allegations raising an antitrust
claim under Actavis, the First Circuit held: “Consistent
with Twombly, which declined to ‘require heightened fact
pleading of specifics’ [in an antitrust suit], we do not
require that the plaintiffs provide precise figures and
calculations at the pleading stage.” Id. at 552 (citations
omitted). To conclude otherwise “would impose a nearly
insurmountable bar for plaintiffs at the pleading stage”
because “very precise and particularized estimates of fair
                             63
value and anticipated litigation costs may require evidence
in the exclusive possession of the defendants, as well as
expert analysis.” Id. (quoting In re Aggrenox Antitrust
Litig., 94 F. Supp. 3d 224, 243 (D. Conn. 2015)). The First
Circuit concluded that plaintiffs must simply “allege facts
sufficient to support the legal conclusion that the
settlement at issue involves a large and unjustified reverse
payment under Actavis.” Id. (citation omitted).
       Finally, Lipitor defendants contend that the reverse
payment here was no more than a commonplace
settlement. That argument is unpersuasive. As they would
have it, the exchange of Ranbaxy’s $1 million payment to
Pfizer for Pfizer’s release of the claim in the Accupril
action (allegedly worth hundreds of millions of dollars)
constituted a lawful compromise warranting no antitrust
scrutiny. Lipitor defendants rely on the Supreme Court’s
warning in Actavis that its opinion “should not be read to
subject to antitrust scrutiny ‘commonplace forms’ of
settlement, such as tender by an infringer of less than the
patentee’s full demand.” King Drug Co., 791 F.3d at 402
(quoting Actavis, 133 S. Ct. at 2233). We doubt that the
$1 million payment from Ranbaxy to Pfizer, in exchange
for an agreement not to enter a patentee’s market, insulates
review of the settlement agreement here. If parties could
shield their settlements from antitrust review by simply
including a token payment by the purportedly infringing
generic manufacturer, then otherwise unlawful reverse
payment settlement agreements attempting to eliminate
                            64
the risk of competition would escape review. That result
simply cannot be squared with Actavis.
       More importantly, Lipitor defendants’ argument
that the settlement agreement here is a commonplace one
does not withstand Lipitor plaintiffs’ plausible allegations
and the reasonable inferences arising therefrom. As
referenced above, the Lipitor complaints plausibly allege
that, while Ranbaxy gave Pfizer $1 million, Pfizer’s
release of the Accupril claims was given “[i]n exchange
for Ranbaxy’s agreement to delay its launch of (and not to
authorize another ANDA filer to launch) generic Lipitor
until November 30, 2011,” not in exchange for the $1
million. Lipitor JA257 (DPP Sec. Am. Compl. ¶ 48).
Bolstering that allegation is Lipitor plaintiffs’ contention
that the Accupril claims were worth hundreds of millions
of dollars to Pfizer and were likely to be successful. The
$1 million payment is paltry by comparison. Given those
allegations, Pfizer’s release of the Accupril claims
plausibly sought to induce Ranbaxy to delay its entry into
the Lipitor market and was not in exchange for Ranbaxy’s
$1 million. Cf. Actavis, 133 S. Ct. at 2229 (“The
companies described these payments as compensation for
other services the generics promised to perform, but the
FTC contends the other services had little value.
According to the FTC the true point of the payments was
to compensate the generics for agreeing not to compete . . .
until 2015.”). Pfizer and Ranbaxy’s settlement agreement
is therefore properly subject to antitrust scrutiny.
                            65
                              B
      Applying the same analysis to the Effexor
consolidated appeals as we applied above compels the
same result. We conclude that Effexor plaintiffs plausibly
allege a reverse payment settlement agreement under
Actavis.
       As with the Lipitor appeals, we begin with a brief
recitation of key allegations. Effexor plaintiffs allege that,
after Teva filed an ANDA seeking approval of its generic
version of Effexor XR, Wyeth brought suit. Following a
ruling adverse to Wyeth, the parties entered into a
settlement agreement. As part of that agreement, Wyeth
agreed it would not compete with Teva by producing an
authorized generic of either Effexor XR or Effexor IR.
That no-AG agreement allegedly “constituted a
substantial, net payment by Wyeth to Teva in exchange for
Teva agreeing to delay generic entry much later than it
otherwise would have.” Effexor JA210 (DPP Sec. Am.
Compl. ¶ 281).13 More specifically, Effexor plaintiffs
claim that the promise “amount[ed] to over $500 million
in value” given to Teva. Id. In return for that value, Teva
agreed it would delay entry into the Effexor XR market by
not selling its generic version of the drug until a specified

13
    Because Effexor plaintiffs’ complaints contain
substantively identical factual allegations, we cite only to
the direct purchasers’ complaint, referring to their second
amended complaint as “DPP Sec. Am. Compl.”
                             66
date. According to Effexor plaintiffs, Teva’s promise to
delay entry of its generic Effexor XR “meant that U.S.
drug purchasers paid billions of dollars more for extended-
release venlafaxine than they otherwise would have absent
the Wyeth-Teva agreement.” Effexor JA210 (DPP Sec.
Am. Compl. ¶ 279). Wyeth was thus able to profit
substantially from Teva’s promise to delay the entry of its
generic into the Effexor XR market.
       The District Court concluded that those allegations
insufficiently pled a large and unjustified reverse payment.
It determined that Effexor plaintiffs had not alleged that
the reverse payment here was “large” because their
“analysis . . . [did] not have a reliable foundation.”14 In re

14
    Reliability is often associated with the evidentiary
standard applicable to expert testimony, see Rule 702(c)
of the Federal Rules of Evidence, not the pleading
standard required to survive a motion to dismiss. As the
Amicus Brief submitted by the American Antitrust
Institute points out, the District Court even seems to have
suggested that Effexor plaintiffs at the pleading stage
should have produced evidence in order to make their
allegation plausible: “Since the Direct Purchaser Plaintiffs
fail to provide appropriate evidence for the Court to
determine the value of the payment, the allegations in the
Complaint do not reach the plausibility standard
established in Iqbal and Twombly.” In re Effexor XR
                             67
Effexor XR Antitrust Litig., 2014 WL 4988410, at *23.
Lacking that reliable foundation, their allegation of a large
reverse payment was, in the District Court’s view,
implausible. Effexor defendants make this same argument
on appeal. Effexor plaintiffs purportedly failed to allege
the specific benefit accruing to Teva from the settlement
agreement and instead relied on “various general
assumptions about generic penetration rates and pricing
impacts.” Wyeth Br. 46. Effexor defendants also argue
the reverse payment was not large because the complaints
here failed to sufficiently allege that Wyeth would have
released an authorized generic but for its settlement
agreement with Teva. Finally, they argue that the reverse
payment may be explained by another provision in the
settlement agreement that requires Teva to pay Wyeth
certain royalties for its Effexor sales. Those arguments,
though, ask too much of Effexor plaintiffs at this stage of
the litigation. Their allegations, as outlined above,
sufficiently allege a reverse payment settlement agreement
as laid out by the Supreme Court in Actavis.
      Similar to the Lipitor appeals, the District Court and
Effexor defendants request a level of pleading exceeding
what Twombly and Iqbal require. See Iqbal, 556 U.S. at
678; Twombly, 550 U.S. at 555. Moreover, neither the
Supreme Court in Actavis nor this Court in King Drug Co.

Antitrust Litig., 2014 WL 4988410, at *23 (emphasis
added); American Antitrust Institute Amicus Br. 10.
                             68
required such detailed allegations at the pleading stage.
The complaint in Actavis simply alleged that the patentee
paid various sums of money to generic manufacturers to
induce them to delay their entry into the patentee’s
pharmaceutical drug market. See Actavis, 133 S. Ct. at
2229. Likewise, in King Drug Co., this Court viewed as
sufficient allegations that the patentee agreed not to
market an authorized generic to compete with a generic
manufacturer, with that promise worth “many millions of
dollars of additional revenue,” thereby inducing the
generic manufacturer to delay its entry into the patentee’s
market. King Drug Co., 791 F.3d at 410. The facts alleged
by Effexor plaintiffs similarly, and thus plausibly, allege
that Wyeth leveraged its extremely valuable promise not
to enter the generic market with an authorized generic in
exchange for Teva’s promise to delay entry into the
Effexor XR market. See King Drug Co., 791 F.3d at 409
(allegations that patentee “sought to induce [the generic
manufacturer] to delay its entry into the [relevant
pharmaceutical drug] market by way of an unjustified no-
AG agreement” sufficiently stated a claim “under
Twombly and Iqbal for violation of the Sherman Act”); see
also Loestrin, 814 F.3d at 552 (“[P]laintiffs must allege
facts sufficient to support the legal conclusion that the
settlement at issue involves a large and unjustified reverse
payment under Actavis.”).
     First, the alleged reverse payment, here in the form
of Wyeth’s no-AG agreement, is plausibly large. The no-
                            69
AG agreement used by Wyeth to induce Teva to stay out
of the Effexor XR market was alleged to have been worth
more than $500 million. Effexor plaintiffs note that the
Effexor XR market is a multi-billion dollar market
annually, and, with the no-AG agreement, “Teva would (a)
garner all of the sales of generic Effexor XR during Teva’s
generic exclusivity period . . . and (b) charge higher prices
than it would have been able to charge if it was competing
with Wyeth’s authorized generic.” Effexor JA211 (DPP
Sec. Am. Compl. ¶ 282). Effexor plaintiffs further cite
several aggregate studies noting that, historically,
authorized-generic versions of a drug bring down the price
of the generic drug, with one study observing that the entry
“of an authorized generic causes generic prices to be 16%
lower than when there is no authorized generic.” Effexor
JA147 (DPP Sec. Am. Compl. ¶¶ 58–60).                  Those
allegations plausibly allege a large reverse payment, with
Wyeth’s no-AG agreement “allow[ing] Teva to maintain
a supra-competitive generic price as the only generic
manufacturer on the market, and to earn substantially
higher profits than it otherwise would have earned.”
Effexor JA214–15 (DPP Sec. Am. Compl. ¶ 292).
       Effexor defendants nevertheless respond that the
payment in this case cannot plausibly constitute a large
reverse payment because of Effexor plaintiffs’ “failure to
plead that Wyeth plausibly would have introduced an AG
absent the settlement.” Wyeth Br. 36. They argue that
Wyeth has rarely introduced authorized generics in
                             70
response to the entry of a generic into one of their branded
drugs’ markets and that, according to an FTC study,
Wyeth “lack[ed] an ‘AG Strategy.’” Id. at 34; see also
Effexor JA1756–77 (a FTC study indicating that Wyeth
released few authorized generics). Effexor defendants
thus contend that Wyeth’s no-AG agreement really gave
Teva little value in return for the latter’s delay because
Wyeth was not going to produce an authorized generic
anyway. Wyeth’s behavior in the absence of the
agreement is certainly disputed. Yet Effexor plaintiffs
state facts plausibly alleging that Wyeth would have
produced an authorized generic but for the no-AG
agreement. They claim that “[t]ypically, once a drug goes
generic, the branded manufacturer sells both the branded
version and an ‘authorized’ generic version, usually
selling the same exact pills in different bottles.” Effexor
JA206 (DPP Sec. Am. Compl. ¶ 265). More specifically,
they allege, “Wyeth could have launched (and, but for its
anticompetitive deal, would have launched) its own
authorized generic at or about the time that Teva launched
its generic.” Effexor JA208–09 (DPP Sec. Am. Compl.
¶ 276). Moreover, while the FTC study cited by Effexor
defendants notes that Wyeth introduced only one
authorized generic between 2001 and 2008, the study does
not specifically analyze Wyeth or suggest that Wyeth
would not have introduced an authorized generic with
respect to Effexor. And even Effexor defendants admit
that Wyeth had introduced at least one authorized generic
in the past. Wyeth Br. 36 & n.11. So, the FTC study is, at
                            71
best, evidence that Wyeth may not have introduced an
authorized generic here, but it does not make Effexor
plaintiffs’ allegations implausible at the pleading stage
where we again consider plausibility, not probability.
Effexor defendants have not—by merely arguing that
Wyeth does not typically introduce authorized generics
into the market—rendered the allegations about the value
of the no-AG agreement implausible.
        Second, the alleged reverse payment made through
Wyeth’s no-AG agreement is plausibly unjustified. As
alleged, the no-AG agreement “cannot be excused as a
litigation cost avoidance effort by Wyeth.” Effexor JA212
(DPP Sec. Am. Compl. ¶ 285). Effexor plaintiffs’
complaint states that Wyeth’s litigation costs with Teva
would have totaled only between $5 million to $10
million, and those costs “would have been the tiniest of a
fraction the size of the payment likely over $500 million
effectuated by Wyeth to Teva.” Id. They allege further
that the no-AG agreement is not “justified on any
procompetitive basis,” asserting that no exchange of goods
or services or any explanation justifies the delay of Teva’s
entry into the Effexor XR market other than the settlement
agreement. Effexor JA212 (DPP Sec. Am. Compl.
¶¶ 286–87).
      Effexor defendants respond that the settlement
agreement is not subject to antitrust scrutiny because the
agreement is “traditional” in that it is justified by Teva’s
payment of royalties to Wyeth. Effexor defendants further
                            72
argue that the complaints do not include allegations about
the settlement agreement’s royalty licensing agreements
when alleging Teva’s receipt of the $500 million no-AG
agreement. Wyeth Br. 49–51. These arguments do not
undermine the plausibility of the complaints’ allegations
that the no-AG agreement was entered into in exchange
for the delayed entry of Teva into the Effexor markets. As
the agreement indicates, Teva paid Wyeth only 15% of its
profits for the first 6 months. The rate then jumped to 50%
and then 65% after that. Thus, while the royalty licensing
provisions may show that the no-AG agreement is
ultimately worth less than it otherwise would have been,
Effexor plaintiffs’ allegations are still plausible. See King
Drug Co., 791 F.3d at 410 (concluding that a settlement
agreement provision allowing access to a market worth
“only $50 million annually” failed to make plaintiffs’
Actavis allegations implausible because the value of that
provision “was orders of magnitude smaller than the
alleged $2 billion . . . market the agreement [was] said to
have protected”).         Although the royalty licensing
provisions will perhaps be a valid defense, they require
factual assessments, economic calculations, and expert
analysis that are inappropriate at the pleading stage.
Effexor plaintiffs, again, need not allege any more at this
stage of the litigation.15

15
  The procedural history related to the royalty licensing
provisions further supports our conclusion. The Effexor
                             73
direct purchasers filed a motion for leave to file a second
amended consolidated complaint on August 28, 2013,
attaching their proposed complaint. A week after
receiving this proposed second amended complaint,
Effexor defendants sent Effexor plaintiffs a copy of the un-
redacted agreement containing details about the royalties,
coming mere days before oral argument on Effexor
plaintiffs’ request to amend. Despite the timing of its
disclosure, Effexor defendants would have this panel
affirm the dismissal of all the complaints, without giving
any Effexor plaintiffs, even those other than the direct
purchasers, a chance to amend. Given this procedural
background, dismissal based on the absence of detailed,
expert-derived allegations explaining the royalty
licenses—as requested by Effexor defendants—would be
inappropriate.     This procedural history serves to
underscore the concern that requiring the heightened level
of specificity requested here would make settlement
agreements like this one nearly impossible to challenge
because the details of the agreements are closely guarded
by the parties entering into them. American Antitrust
Institute Amicus Br. 6–7. Accordingly, it was appropriate
to look to general assumptions about authorized generics
to determine the value of the agreement based on the
information available to Effexor plaintiffs. They need not
have brought in experts to assess the settlement based on
the limited information they had.
                            74
       In sum, Effexor plaintiffs need not have valued the
no-AG agreement beyond their allegations summarized
above. See Loestrin, 814 F.3d at 552; King Drug Co., 791
F.3d at 409–10. Nor were they required to counter
potential defenses at the pleading stage. Actavis, 133 S.
Ct. at 2236. Their complaints contain sufficient factual
detail about the settlement agreement between Teva and
Wyeth to plausibly suggest that Wyeth paid Teva to stay
out of the market by way of its no-AG agreement; that is
the very anticompetitive harm that the Supreme Court
identified in Actavis. Id. (“[T]he payment (if otherwise
unexplained) likely seeks to prevent the risk of
competition. And, as we have said, that consequence
constitutes the relevant anticompetitive harm.”); see also
id. (identifying the anticompetitive harm as “the
payment’s objective . . . to maintain supracompetitive
prices to be shared among the patentee and the challenger
rather than face what might have been a competitive
market”). While Effexor defendants may ultimately be
able to show that the payments were not in fact large or
unjustified, that determination should not have been made
at the pleading stage given the plausible allegations here.
       Effexor defendants also attempt to support the
District Court’s decision to grant their motion to dismiss
on two other, independent grounds. First, they argue that
the FTC’s failure to object to their settlement agreement
prevents Effexor plaintiffs from now bringing an antirust
challenge to that agreement. Second, they contend that the
                            75
Noerr-Pennington doctrine immunizes their settlement
agreement from antitrust scrutiny. Neither argument
prevails.

                             1

       Effexor defendants argue that “Wyeth [could] not
possibly have sought to illicitly ‘pay’ Teva [because] it
submitted the settlement in full to the District Court for
antitrust review and the District Court specifically invited
the FTC to voice concerns, and then the FTC raised no
objections.”     Wyeth Br. 55.         Essentially, Effexor
defendants contend that (1) by submitting the agreement
to the FTC in 2005, Wyeth lacked any anticompetitive
intent; (2) while not dispositive, the lack of
anticompetitive intent is “useful in determining whether a
settlement should be viewed as” an unlawful reverse
payment settlement agreement or a traditional settlement
agreement, id.; and (3) the FTC’s failure to object
effectively sanctioned the settlement agreement. The
District Court agreed, explaining that “any alleged
antitrust intent held by the parties is negated by the fact
that the settlement and license agreements were forwarded
to the FTC.” In re Effexor XR Antitrust Litig., 2014 WL
4988410, at *24. And, although the FTC reserved its
rights in response to Wyeth’s submission, the District
Court found that reservation of rights “unconvincing,”
concluding that “when a governmental agency receives an
invitation from the Court to intercede in a matter by way
of an Order, that agency should respond appropriately, not
                            76
simply reserve that right for the future.” Id. We
disagree—the submission of the settlement agreement to
the FTC here does not protect the settlement agreement
from antitrust scrutiny under Actavis.
       First, the District Court failed to draw all reasonable
inferences in Effexor plaintiffs’ favor.              Wyeth’s
compliance with the 2002 consent decree fails to
demonstrate that Wyeth somehow lacked anticompetitive
intent. It was complying with a legal obligation, not acting
altruistically.     Similarly, in addition to Wyeth’s
submission to the FTC from the 2002 consent decree, Teva
and Wyeth had to submit the settlement to the FTC for
review under the MMA. § 1112, 117 Stat. at 2461–63.
Therefore, taking reasonable inferences in Effexor
plaintiffs’ favor, compliance with the 2002 consent decree
and the MMA through the submission of the settlement
agreement simply indicates mere compliance with the law,
not the lack of antitrust intent.
       Even if the submission of the settlement agreement
to the FTC could create an inference that Wyeth somehow
lacked antitrust intent, that intent is not an element of an
antitrust claim, and benign intent does not shield
anticompetitive conduct from liability. A party’s “good
intention” cannot “save an otherwise objectionable
[restraint of trade].” Chicago Bd. of Trade v. United
States, 246 U.S. 231, 238 (1918). The antitrust inquiry “is
confined to a consideration of impact on competitive
conditions,” Nat’l Soc’y of Prof’l Eng’rs v. United States,
                             77
435 U.S. 679, 690 (1978), and “good motives will not
validate an otherwise anticompetitive practice,” NCAA v.
Bd. of Regents of the Univ. of Okla., 468 U.S. 85, 101 n.23
(1984). Accordingly, the District Court erred in giving
significant weight to the parties’ compliance with the 2002
consent decree and MMA.
       Finally, it is erroneous to conclude that the FTC’s
inaction equates to a determination that the settlement
agreement does not run afoul of the Sherman Act,
especially given the circumstances here. Generally, an
agency decision on whether to act in a particular matter or
at a particular time “often involves a complicated
balancing” of factors: the agency must “assess whether a
violation has occurred,” “whether agency resources are
best spent” on that matter, whether that particular action
“best fits the agency’s overall policies, and indeed whether
the agency has enough resources to undertake the action at
all.” Heckler v. Chaney, 470 U.S. 821, 831 (1985).
Reading agency tea leaves is therefore a vexing prospect,
made all the more difficult given the limited scope of
review on a motion to dismiss.
       The circumstances here bear out that observation.
Following the submission of the settlement agreement in
2005, the FTC offered no objection but explicitly reserved
its rights to take later action on the agreement. That
express reservation alone raises the plausible inference
that the FTC had not accepted the legality of the
agreement. Moreover, the MMA includes a savings clause
                            78
which explains that the FTC’s failure to object does not
prevent later litigation over the agreement:
      Any action taken by . . . the [FTC], or any
      failure of . . . the [FTC] to take action, under
      this subtitle shall not at any time bar any
      proceeding or any action with respect to any
      agreement between a brand name drug
      company and a generic drug applicant, or any
      agreement between generic drug applicants,
      under any other provision of law, nor shall
      any filing under this subtitle constitute or
      create a presumption of any violation of any
      competition laws.
§ 1117, 117 Stat. at 2463. Thus, even though the FTC
expressly reserved its rights, it did not have to do so under
the law. Again, drawing all reasonable inferences in
Effexor plaintiffs’ favor, the FTC’s failure to object here
constitutes no waiver of objection to or affirmance of the
settlement agreement.
       Thus, the District Court erred in concluding that the
submission of the settlement agreement to the FTC and the
FTC’s lack of response immunized Effexor defendants’
settlement agreement from antitrust scrutiny under
Actavis.

                             2

                             79
       Effexor defendants finally contend that “[d]ismissal
is appropriate for the independent reason that the
[settlement agreement] became operative only after the
district court overseeing the patent case incorporated the
terms into a court order requested by the parties.” Wyeth
Br. 61. They cite the District Court’s one-page consent
decree adopting the terms of the settlement. According to
them, “the operation of the settlement . . . result[s] from
government action—stemming from constitutionally
protected petitioning activity.” Id.
        Essentially, Effexor defendants argue that, because
they submitted the proposed settlement agreement to the
District Court for confirmation, Noerr-Pennington16
immunity inoculates the settlement agreement from
antitrust scrutiny. “Rooted in the First Amendment and
fears about the threat of chilling political speech,” Noerr-
Pennington immunity provides “immun[ity] from antitrust
liability” to parties “who petition[ ] the government for
redress.” A.D. Bedell Wholesale Co. v. Philip Morris Inc.,
263 F.3d 239, 250 (3d Cir. 2001). That immunity “applies
to actions which might otherwise violate the Sherman Act
because ‘[t]he federal antitrust laws do not regulate the
conduct of private individuals in seeking anticompetitive
action from the government.’” Id. at 250–51 (quoting City

16
 Named after Eastern Railroad Presidents Conference v.
Noerr Motor Freight, 365 U.S. 127 (1961); United Mine
Workers of Am. v. Pennington, 381 U.S. 657 (1965).
                            80
of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365,
379–80 (1991)).
       However, “[t]he scope of Noerr-Pennington
immunity . . . depends on the ‘source, context, and nature
of the competitive restraint at issue.’” Id. at 251 (quoting
Allied Tube & Conduit Corp. v. Indian Head, Inc., 486
U.S. 492, 499 (1988)). On the one hand, parties may be
immune from liability for “the antitrust injuries which
result from the [government] petitioning itself” or “the
antitrust injuries caused by government action which
results from the petitioning.” Id. (emphasis added). On
the other hand, “[i]f the restraint directly results from
private action there is no immunity.” Id. That is,
immunity will not categorically apply to private actions
somehow involving government action.                “Passive
government approval is insufficient. Private parties
cannot immunize an anticompetitive agreement merely by
subsequently requesting legislative approval.” Id. A
distinction therefore exists between merely urging the
government to restrain trade and asking the government to
adopt or enforce a private agreement. Government
advocacy is protected by Noerr-Pennington immunity;
seeking governmental approval of a private agreement is
not.
       Effexor defendants argue that the effect of the
settlement agreement at issue “was dependent entirely on
the action of the court” and is therefore protected. Wyeth
Br. 63. We are not persuaded. The Supreme Court
                            81
explained in Local No. 93, International Association of
Firefighters v. City of Cleveland, 478 U.S. 501 (1986),
that, while consent decrees are at some level judicial acts,
a court’s role in entering a consent judgment differs
fundamentally from its role in actually adjudicating a
dispute. Id. at 519–22. When parties pursue litigation,
courts reach determinations of facts and applicable law via
the adversary process. But when courts enter consent
decrees, “it is the agreement of the parties, rather than the
force of the law upon which the complaint was originally
based, that creates the obligations embodied in the consent
decree.” Id. at 522. “Indeed, it is the parties’ agreement
that serves as the source of the court’s authority to enter
any judgment at all.” Id. That is because consent decrees
“closely resemble contracts.” Id. at 519. Their “most
fundamental characteristic” is that they are voluntary
agreements negotiated by the parties for their own
purposes. Id. at 521–22; see id. at 522 (“[T]he decree itself
cannot be said to have a purpose; rather the parties have
purposes . . . .” (quoting United States v. Armour & Co.,
402 U.S. 673, 681 (1971))). Consequently, when parties
seek to enforce agreements adopted in consent orders,
courts construe terms of the settlement based on the intent
of the parties, not of the court. See, e.g., United States v.
ITT Cont’l Baking Co., 420 U.S. 223, 238 (1975) (“[A]
consent decree or order is to be construed for enforcement
purposes basically as a contract[.]”); United States v. New
Jersey, 194 F.3d 426, 430 (3d Cir. 1999) (“[A]s consent
decrees have many of the attributes of contracts, we
                             82
interpret them with reference to traditional principles of
contract interpretation.”); Fox v. U.S. Dep’t of Hous. &
Urban Dev., 680 F.2d 315, 319–21 (3d Cir. 1982)
(examining evidence regarding “the intention of the
parties”).
       Effexor defendants nevertheless attempt to
distinguish this case from a mere “rubberstamping of a
private settlement.” Wyeth Br. 64. They point to four
facts they believe distinguish this case from the typical
unprotected settlement approval: (1) the full terms of the
settlement agreement were presented to the District Court;
(2) the District Court solicited feedback from the FTC; (3)
the FTC was provided with time and notice of the
settlement prior to its effectiveness; and (4) the full terms
of the settlement agreement between Teva and Wyeth
were included in the consent order. Id. at 65.
      Those differences fail to convert the otherwise
passive government approval of a private settlement
agreement into a protected government action. As
discussed earlier, the FTC’s inaction did not represent
approval of the settlement agreement. In addition, court
approval of a settlement agreement, even with access to
the agreement’s full terms, is simply not akin to a
corporation’s petition of the government for a monopoly
or the government’s grant of an exclusive license to a
corporation. Cf. Cantor v. Detroit Edison Co., 428 U.S.
579, 602 (1976) (refusing to allow “state action which
amounts to little more than approval of a private proposal”
                             83
to immunize otherwise anticompetitive conduct). Instead,
court approval of a settlement agreement of the kind
alleged here is commercial activity not protected by the
First Amendment right to petition the government. See In
re Androgel Antitrust Litig., No. 1:09-cv-955, 2014 WL
1600331, at *6–9 (N.D. Ga. Apr. 21, 2014) (“Indeed,
providing the consent judgment with Noerr-Pennington
immunity would largely eviscerate the ruling in Actavis
and the Court can be sure that subsequent patent
settlements would always include a consent judgment.”);
In re Nexium (Esomeprazole) Antitrust Litig., 968 F. Supp.
2d 367, 394–98 (D. Mass. 2013) (“The ways in which
parties maneuver to transform a settlement agreement into
a judicially approved consent judgment, then, cannot be
fairly characterized as direct ‘petitioning’—at least not as
that word is commonly understood in the context of the
political process.”); In re Ciprofloxacin Hydrochloride
Antitrust Litig., 261 F. Supp. 2d 188, 212–13 (E.D.N.Y.
2003) (“Even if signing the Consent Judgment could be
construed as approving the Settlement Agreements,
government action that ‘amounts to little more than
approval of a private proposal’ is not protected.” (quoting
Cantor, 428 U.S. at 602)). Finally, we note that accepting
Effexor defendants’ argument would have the practical
effect of insulating many (if not most) potentially
collusive settlement agreements from legal challenge. If
Effexor defendants’ actions were sufficient to garner
Noerr-Pennington immunity, then almost every settlement
agreement would be submitted to a court for entry of a
                            84
consent decree, and court approval would be likely to
result given that no party before the court would be
challenging the entry of the order. Effectively, then, no
third party harmed by a collusive agreement could bring
an antitrust lawsuit.
      Accordingly, Effexor defendants’ actions in
submitting their private agreement to the District Court for
entry of a consent decree are not sufficient to grant that
agreement Noerr-Pennington immunity.

                              V
        In the consolidated Lipitor appeals, the District
Court not only dismissed Lipitor plaintiffs’ allegations
regarding an unlawful reverse payment but rather
dismissed the entirety of the complaints in those appeals.
In doing so, it also rejected allegations relating to Pfizer’s
fraudulent procurement and enforcement of the ‘995
Patent. More specifically, it dismissed as implausible
allegations that Pfizer fraudulently procured the ‘995
Patent (Walker Process fraud), wrongfully listed that
patent in the FDA’s Orange Book, conducted sham
litigation as the basis for entering into the reverse payment
settlement agreement, filed a sham “citizen petition,” and
entered into an overall monopolistic scheme. We now
address the dismissal of those additional allegations and
revive each set of allegations.

                              A
                             85
       The District Court dismissed Lipitor plaintiffs’
allegations of Pfizer’s fraudulent patent procurement and
enforcement. That was error.17
      Fraudulent procurement of a patent or the
enforcement of a patent obtained by fraud, i.e., Walker
Process fraud, can provide the basis for antitrust liability.
See Walker Process Equip., Inc. v. Food Mach. & Chem.
Corp., 382 U.S. 172, 177 (1965). To prove Walker
Process fraud, a plaintiff must, in part, demonstrate
      (1) a false representation or deliberate
      omission of a fact material to patentability,
      (2) made with the intent to deceive the patent
      examiner, (3) on which the examiner
      justifiably relied in granting the patent, and
      (4) but for which misrepresentation or
      deliberate omission the patent would not
      have been granted.
C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1364 (Fed.
Cir. 1998); see also TransWeb, LLC v. 3M Innovative
Props. Co., 812 F.3d 1295, 1306 (Fed. Cir. 2016)

17
  Because we reverse the dismissal of Lipitor plaintiffs’
Walker Process fraud allegations, we will also reverse the
District Court’s limitation on Lipitor plaintiffs’ potential
damages period, Lipitor I, 2013 WL 4780496, at *25, as
that limitation was predicated on the dismissal of the
Walker Process fraud allegations.
                             86
(observing that, in addition to proving that the patent was
obtained through fraud, an antitrust plaintiff must show
“all the other elements necessary to establish a Sherman
Act monopolization claim”).
       Lipitor plaintiffs claim that Pfizer obtained the ‘995
Patent by fraud and then used it to continue to sell Lipitor
exclusively. To summarize those allegations, Pfizer
obtained the ‘995 Patent, claiming protection for
atorvastatin calcium, as a follow-on patent to the ‘893
Patent. To obtain the ‘995 Patent, Pfizer purportedly
submitted false and misleading data to the PTO showing
the cholesterol-synthesis inhibiting activity of atorvastatin
calcium was surprising and unexpected.                  More
specifically, Pfizer submitted a chart with selectively
misleading data and intentionally failed to submit another
set of data that undermined its ‘995 Patent application.
Pfizer provided the PTO with that information despite its
own scientists informing it that its prior ‘893 Patent
already covered atorvastatin calcium. After once denying
Pfizer’s patent application for atorvastatin calcium as
“anticipated” by the ‘893 Patent and allegedly receiving
even more fraudulent data from Pfizer as a result, the PTO
eventually issued the ‘995 Patent.
       Neither Pfizer nor the District Court challenges the
sufficiency or specificity of those allegations based on the
face of the complaint. The District Court even stated that
its “decision d[id] not rest on any failure on [Lipitor]
Plaintiffs’ part under Fed. R. Civ. P. 8(a) or 9(b) to spell
                             87
out these allegations.” Lipitor I, 2013 WL 4780496, at
*18. Despite disavowing reliance on the pleading
standards set forth in the Federal Rules of Civil Procedure,
the District Court nonetheless ruled that the Walker
Process fraud allegations were implausible because they
“were presented at trial in the litigation before [another
district court judge], in Australia and Canada, and in
reissue proceedings before the PTO.” Id. More
specifically, the District Court reasoned that the Walker
Process fraud allegations were implausible because (1) a
prior District Court Judge had already determined that
similar allegations were implausible, (2) the outcomes of
foreign litigation addressing the fraud allegations failed to
substantiate those allegations, and (3) the PTO’s
reissuance of the ‘995 Patent in 2009, despite its
awareness of the fraud allegations, meant that the PTO
determined that Pfizer had committed no fraud in its
original procurement of the patent. Id. at *19–20.
Individually or in combination, none of those reasons
renders the Walker Process fraud allegations implausible.
We address them each in turn.

                             1
        In concluding that Lipitor plaintiffs’ allegations of
Walker Process fraud were implausible, the District Court
first relied on a District Court’s decision in another case.
That court had determined that Pfizer had committed no
wrongdoing in the procurement of the ‘995 Patent.
Reliance on that prior decision functionally amounted to
                             88
the application of collateral estoppel and was therefore
improper because Lipitor plaintiffs were not parties in that
prior case.
        As described above, Pfizer sued Ranbaxy in 2002
for infringement of the ‘893 and ‘995 Patents following
Ranbaxy’s ANDA filing. Pfizer, 405 F. Supp. 2d at 499.
In that litigation, Ranbaxy defended against Pfizer’s
infringement suit by arguing in part that, because Pfizer
engaged in inequitable conduct in the procurement of the
‘995 Patent before the PTO, the ‘995 Patent was
unenforceable. Id. at 520–21. Similar to the allegations
here, Ranbaxy contended that Pfizer withheld information
from the PTO and misrepresented the results of testing
related to atorvastatin calcium. Id. Following a bench
trial, however, the District Court in that litigation
determined that Pfizer committed no inequitable conduct
in its procurement of the ‘995 Patent. Id. at 520–25.
       Relying on that determination, the District Court
here concluded that Lipitor plaintiffs’ Walker Process
fraud allegations were implausible. In doing so, it
effectively bound Lipitor plaintiffs to the other Court’s
prior determination in the other case. That is the essence
of collateral estoppel. 18 See Doe v. Hesketh, 828 F.3d 159,

18
   The District Court also appeared to rely on the law of
the case doctrine, citing case law applying that doctrine.
The law of the case doctrine does not apply here because
it only applies within a single litigation. See Hamilton v.
                            89
171 (3d Cir. 2016) (“Collateral estoppel prevents the re-
litigation of a factual or legal issue that was litigated in an
earlier proceeding.”).
        Applying collateral estoppel against Lipitor
plaintiffs based on the prior litigation between Pfizer and
Ranbaxy constitutes reversible error. Invocation of the
collateral estoppel doctrine is appropriate only where “the
party against whom the bar is asserted was a party or in
privity with a party to the prior adjudication[] and . . . had
a full and fair opportunity to litigate the issue in question.”
Id. (quoting Del. River Port Auth. v. Fraternal Order of
Police, 290 F.3d 567, 573 n.10 (3d Cir. 2002)). Here, none
of the Lipitor plaintiffs was a party in that prior litigation.
Ruling that their allegations are implausible in light of that
litigation would thus improperly estop Lipitor plaintiffs
from raising Walker Process fraud. See S. Cross Overseas
Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d
410, 426 (3d Cir. 1999) (“[O]n a motion to dismiss, we
may take judicial notice of another court’s opinion—not
for the truth of the facts recited therein, but for the
existence of the opinion, which is not subject to reasonable
dispute over its authenticity.” (emphasis added) (citations

Leavy, 322 F.3d 776, 786–87 (3d Cir. 2003) (“The law of
the case doctrine ‘limits relitigation of an issue once it has
been decided’ in an earlier stage of the same litigation.”
(quoting In re Continental Airlines, Inc., 279 F.3d 226,
232 (3d Cir. 2002))).
                              90
omitted)); Gen. Elec. Capital Corp. v. Lease Resolution
Corp., 128 F.3d 1074, 1083 (7th Cir. 1997) (“[I]f a court
could take judicial notice of a fact simply because it was
found to be true in a previous action, the doctrine of
collateral estoppel would be superfluous. A plaintiff
cannot be collaterally estopped by an earlier determination
in a case in which the plaintiff was neither a party nor in
privity with a party.” (citations omitted)); United States v.
Jones, 29 F.3d 1549, 1553 (11th Cir. 1994) (“If it were
permissible for a court to take judicial notice of a fact
merely because it has been found to be true in some other
action, the doctrine of collateral estoppel would be
superfluous.” (citation omitted)); see also DDAVP, 585
F.3d at 692 (concluding that the District Court improperly
relied on the record in an earlier case to dismiss Walker
Process fraud allegations and noting “the record in this
case could be different following discovery”). 19

                             2
      The District Court also cited the presentment of
similar allegations to Australian and Canadian courts as a

19
   Pfizer cites several cases, but none supports the District
Court’s functional application of collateral estoppel here.
See, e.g., CBS Outdoor Inc. v. New Jersey Transit Corp.,
No. CIV.A.06-2428HAA, 2007 WL 2509633, at *2, *15
(D.N.J. Aug. 30, 2007) (concluding that plaintiff’s
allegations were implausible, as that same plaintiff’s
allegations had been rejected in state court).
                             91
basis for dismissal. It concluded that the results of that
foreign litigation did “nothing to alter” its conclusion that
Lipitor plaintiffs’ Walker Process fraud allegations were
implausible. Lipitor I, 2013 WL 4780496, at *19–20. We
agree only that the past foreign litigation has no bearing
on the plausibility of the Walker Process fraud allegations
here. Even if the District Court were permitted to consider
it, the rulings in that litigation fail to make Lipitor
plaintiffs’ allegations implausible.
       As stated above, the factual resolution of issues in
prior litigation (foreign or otherwise) should not dictate
the plausibility of Lipitor plaintiffs’ allegations when they
were not parties to that litigation. See S. Cross Overseas
Agencies, 181 F.3d at 426 (“[O]n a motion to dismiss, we
may take judicial notice of another court’s opinion—not
for the truth of the facts recited therein, but for the
existence of the opinion, which is not subject to reasonable
dispute over its authenticity.”); Werner v. Werner, 267
F.3d 288, 295 (3d Cir. 2001) (“Taking judicial notice of
the truth of the contents of a filing from a related action
could reach, and perhaps breach, the boundaries of proper
judicial notice.”).
       Even if consideration of that other foreign litigation
were appropriate, Lipitor plaintiffs’ allegations are still
plausible. In the Australian litigation, the Australian trial
court found that Pfizer was guilty of “false suggestion”
because the record there raised “[t]he clear inference . . .
that the claim of surprising and unexpected inhibition of
                             92
the synthesis of cholesterol . . . is an artificial and
unsupported claim.” Ranbaxy Australia Pty Ltd v Warner-
Lambert Co LLC (No. 2) [2006] FCA 1787 (20 December
2006) ¶ 357 (Austl.). On appeal, another Australian court
concluded that Pfizer’s assertion that its results were
surprising was “a false representation” and that the patent
“was obtained by false suggestion or misrepresentation.”
Ranbaxy Australia Pty Ltd (ACN 110 781 826) v. Warner-
Lambert Co LLC [2008] FCAFC 82 (28 May 2008) ¶ 140
(Austl.). While the District Court and Pfizer note that the
Australian courts did not go so far as to say Pfizer
intentionally committed fraud, those rulings would, if
anything, seem to support the plausibility of Lipitor
plaintiffs’ Walker Process allegations here.
       In the Canadian litigation, a Canadian court
determined that Pfizer’s data and statements in support of
its Canadian patent (the equivalent of the ‘995 patent)
were “incorrect” and based on “false suggestion.” Pfizer
Canada Inc. v. Canada (Minister of Health), 2007 F. Cas. 91,
paras. 122, 124 (Can. Ont. F.C.). On appeal, a Canadian
appeals court reversed, concluding Pfizer’s data and
statements were not misleading. Pfizer Canada Inc. v.
Canada (Minister of Health) (2008), [2009] 1 F.C.R. 253,
paras. 53–55 (Can. Ont. C.A.). That decision, though,
appears to have largely avoided the issue of Pfizer’s
alleged misrepresentations. Id. paras. 56–58 (applying
one section of a Canadian patent statute and noting that
“[t]he requirement that the specification of a patent be
                            93
truthful and not be misleading” was in another section of
the patent statute, which was not at issue). Were these
decisions a proper basis to evaluate the plausibility of
Lipitor plaintiffs’ allegations, they would do little to
suggest implausibility.
        In short, the factual resolution of similar Walker
Process fraud allegations in foreign litigation not
involving Lipitor plaintiffs has no bearing on the current
litigation. Even assuming consideration of that foreign
litigation was proper, it fails to suggest the implausibility
of Lipitor plaintiffs’ allegations.

                             3
       The District Court finally relied on the reissuance of
the ‘995 Patent in 2009 to dismiss the Walker Process
fraud allegations. It concluded that, because the PTO
reissued the ‘995 Patent in 2009 despite being made aware
of the fraud allegations, the reissuance “suggest[ed] that
[Lipitor plaintiffs’ allegation] that the PTO would not have
issued the patent but for the alleged misrepresentations or
omissions [was] implausible.” Lipitor I, 2013 WL
4780496, at *20. We disagree.
       To the extent that the District Court’s decision
implies that a patent reissuance precludes a finding of
Walker Process fraud, such reasoning is incorrect. A
patent’s reissuance by the PTO does not bar a later finding
that the patent was originally procured by fraud. See
                             94
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d
1276, 1288 (Fed. Cir. 2011) (en banc) (“[I]nequitable
conduct cannot be cured by reissue . . . .”). Rather, a fact
finder may conclude that inequitable conduct or fraud
occurred in the patent’s prosecution despite the patent’s
reissuance by the PTO. See Bristol-Myers Squibb Co. v.
Rhone-Poulenc Rorer, Inc., 326 F.3d 1226, 1236–37, 1242
(Fed. Cir. 2003) (upholding district court’s finding of
inequitable conduct in patent prosecution despite the
PTO’s reissuance of patent); see also Hoffman-La Roche
Inc. v. Lemmon Co., 906 F.2d 684, 688–89 (Fed. Cir.
1990) (“[I]f the district court finds that there was
inequitable conduct in the prosecution of the original
patent[,] then the reissue patent is invalid . . . .”).
       Assuming the District Court did not conclude that
the patent reissuance precluded a finding of fraud but that
it only “suggested” that such a finding was implausible,
the District Court failed to draw inferences in Lipitor
plaintiffs’ favor. Lipitor plaintiffs allege that, were it not
for Pfizer’s fraud on the PTO in procuring the ‘995 Patent
in 1993, the PTO would not have originally issued the ‘995
Patent. See Lipitor JA375 (DPP Original Compl. ¶ 242
(“Were it not for Pfizer’s fraud on the PTO in the context
of procuring the ‘995 patent, there would never have been
a ‘995 patent in the first place.”)). Drawing reasonable
inferences in their favor, Lipitor plaintiffs’ allegation is
plausible. Initially, the PTO issued the ‘995 Patent based
on data alleged to be fraudulent. Rather than rely on that
                             95
data during the reissuance proceedings before the PTO,
Pfizer based its request for reissuance entirely on Lipitor’s
“commercial success,” a basis that was clearly not
available before Lipitor’s launch in 1997. By Pfizer’s own
request, the PTO did not base its 2009 decision on the
allegedly fraudulent data.         During the reissuance
proceedings, Pfizer told the PTO that the information it
previously submitted in 1993 was “inaccurate,” that it was
not “necessary to consider such evidence,” and that Pfizer
was no longer relying on that data. Lipitor JA371–72
(DPP Orig. Am. Compl. ¶¶ 225–28).               Finally, no
allegations suggest that the PTO’s reissuance made an
express determination regarding Pfizer’s lack of fraud
during the original patent proceeding. These allegations
plausibly allege that the PTO would not have issued the
‘995 Patent during the original patent proceedings in 1993
but for the allegedly fraudulent and misleading
submissions by Pfizer.
       Pfizer’s arguments to the contrary are unpersuasive.
First, Pfizer would have us conclude that the PTO
definitively determined that Pfizer committed no past
fraud based on the PTO’s Manual of Patent Examining
Procedure (“MPEP”), and therefore the reissuance should
prevent Lipitor plaintiffs from raising Walker Process
fraud allegations. As we have already observed, the
PTO’s reissuance of a patent does not bar a later finding
that the patent was first procured by fraud. See
Therasense, 649 F.3d at 1288; PIC Inc. v. Prescon Corp.,
                             96
485 F. Supp. 1302, 1303 (D. Del. 1980) (“[A] result
favorable to a patentee in a PTO reissue proceeding on
issues of invalidity by reason of prior art and fraud is not
entitled to preclusive effect in the courts.”).
       Moreover, Pfizer’s reliance on the MPEP is
misplaced. Pfizer cites language from the MPEP that
states, “Clearly, if a reissue patent would not be
enforceable after its issue because of ‘fraud’ . . . during the
prosecution of the patent sought to be reissued, the reissue
patent application should not issue.” MPEP § 2012 (9th
ed., Nov. 2015). Pfizer fails to include the next part of that
same section of the manual, though, which tells the patent
examiner “not to make any investigation as to lack of
deceptive intent requirement in reissue applications.
Applicant’s statement (in the oath or declaration) of lack
of deceptive intent will be accepted as dispositive except
in special circumstances such as an admission or judicial
determination of fraud.” Id. (emphasis added). Pfizer also
points out that Ranbaxy filed protests raising the fraud
allegations before the PTO during the reissuance
proceeding. It argues that the PTO was “required to
consider such arguments” under the MPEP. Pfizer Br. 50
(citing MPEP § 1901.6). Section 1901.6 of the MPEP,
however, states that the patent examiner receiving a
protest raising issues of fraud must enter the protest into
“the application file, generally without comments on those
issues.” MPEP § 1901.6(I)(B). Given Pfizer’s request
that the PTO not consider its allegedly fraudulent data, the
                              97
PTO’s reissuance of the ‘995 Patent on a basis other than
those fraudulent submissions, the lack of any explicit fraud
determination by the PTO in its reissuance of the ‘995
Patent, and the MPEP seemingly limiting patent
examiners’ investigations into past fraud, we conclude that
the complaint plausibly alleges that the PTO did not find a
lack of fraud in initial patent proceedings through its
reissuance of the ‘995 Patent.
       Second, Pfizer contends that its disclosures of
information to the PTO during the reissuance proceedings
undermine the allegations that Pfizer intended to deceive
the PTO in 1993. During the reissuance proceedings,
Pfizer provided information on the Australian and
Canadian litigations and, as noted earlier, informed the
PTO that the data previously submitted in support of the
‘995 Patent was “inaccurate.” Pfizer’s actions in 2007
before the PTO during reissuance proceedings, though,
shed little light on Pfizer’s intent to deceive the PTO back
in 1993 when Pfizer first sought issuance of the ‘995
patent.20 See Bristol-Myers Squibb Co., 326 F.3d at 1241
(“[T]he issue is [the patentee’s] intent during the
prosecution of the original application. Thus, [the
patentee’s] disclosure during reissue is irrelevant to the
inquiry of whether [the patentee] acquired the . . . patent

20
   For a similar reason, Pfizer’s later disclosures of
information in the foreign litigation fail to make Lipitor
plaintiffs’ allegations of fraudulent intent implausible.
                            98
by engaging in inequitable conduct.”). At the very least,
Pfizer’s disclosures do not make Lipitor plaintiffs’
allegations implausible.
       In sum, the PTO’s reissuance fails to render Lipitor
plaintiffs’ allegations implausible. See Therasense, 649
F.3d at 1288; Bristol-Myers Squibb Co., 326 F.3d at 1236–
37, 1242.

                             B
       After dismissing Lipitor plaintiffs’ Walker Process
fraud allegations, the District Court also dismissed
allegations that Pfizer falsely listed the ‘995 Patent in the
FDA’s Orange Book. It rejected those allegations of the
false Orange Book listing based on its dismissal of the
Walker Process fraud allegations. Because we conclude
that Lipitor plaintiffs plausibly allege Walker Process
fraud, we also reinstate their allegations regarding Pfizer’s
false Orange Book listing.

                             C
       The District Court next dismissed Lipitor plaintiffs’
allegations that Pfizer conducted sham litigation. The
Court concluded that those allegations were implausible
largely because the Walker Process fraud allegations were
implausible. Again, because we conclude the Walker
Process fraud allegations are plausible, that is not a ground
for dismissal. The District Court also offered several other

                             99
reasons for dismissing the sham litigation allegations
related to Pfizer’s suit against Ranbaxy in 2008, but those
additional grounds fail to persuade.
       Filing a lawsuit essentially petitions the government
for redress and is therefore generally protected from
antitrust liability by Noerr-Pennington immunity. See
Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 122
(3d Cir. 1999). But Noerr-Pennington immunity will not
shield lawsuits that are a “mere sham to cover what is
actually nothing more than an attempt to interfere directly
with the business relationships of a competitor.” Id.
(quoting E. R.R. Presidents Conference v. Noerr Motor
Freight, Inc., 365 U.S. 127, 144 (1961)). To demonstrate
the applicability of that exception to Noerr-Pennington
immunity, a plaintiff must show that the defendant’s
lawsuit was both “objectively baseless in the sense that no
reasonable litigant could realistically expect success on the
merits” and “an attempt to interfere directly with the
business relationships of a competitor.” Id. at 122–24
(quoting Prof’l Real Estate Inv’rs, Inc. v. Columbia
Pictures Indus., Inc., 508 U.S. 49, 60 (1993)).
       In March 2008, Pfizer sued Ranbaxy, claiming that
Ranbaxy’s generic Lipitor would infringe Pfizer’s two
Lipitor-related process patents. Lipitor plaintiffs allege
that Pfizer’s 2008 lawsuit was a sham. They assert that
Pfizer knew Ranbaxy’s generic would not violate those
patents and that Pfizer simply used the 2008 suit as a way
to enter into the reverse payment settlement agreement.
                            100
       The District Court first concluded that those
allegations were implausible because the court in the
alleged sham litigation “permitted jurisdictional
discovery” on subject-matter jurisdiction and because
Lipitor plaintiffs failed to explain why subject-matter
jurisdiction in that litigation was lacking. Lipitor I, 2013
WL 4780496, at *21. Lipitor plaintiffs, though, alleged
that Pfizer’s 2008 suit was not justiciable because
Ranbaxy was already enjoined from selling its generic
Lipitor for several more years given the earlier litigation
between the parties. The grant of jurisdictional discovery
is also not a determination of the action’s underlying
merits and certainly has limited, if any, bearing on the
plausibility of Lipitor plaintiffs’ allegations. Indeed,
Lipitor plaintiffs explicitly provide allegations as to why
Pfizer’s 2008 suit lacked merit and was thus a sham. See
Lipitor JA255–56 (DPP Sec. Am. Compl. ¶¶ 140–44).

      Second, the District Court observed that the timing
of Pfizer’s litigation “was consistent with the typical
duration for litigation infringement claims.” Lipitor
JA51–52. Given the pleading standard, it should not have
been drawing inferences in Pfizer’s favor regarding the
timing of Pfizer’s 2008 litigation. See In re Asbestos Prod.
Liab. Litig. (No. VI), 822 F.3d 125, 131 (3d Cir. 2016)
(“[W]e must accept as true all plausible facts alleged in her
amended complaint and draw all reasonable inferences in
her favor.”). Lipitor plaintiffs thus plausibly allege that
Pfizer conducted sham litigation in its 2008 lawsuit
                            101
against Ranbaxy.

                             D
       The District Court next dismissed Lipitor plaintiffs’
allegations that Pfizer submitted a sham citizen petition to
the FDA to prevent Ranbaxy’s entrance into the Lipitor
market. It reasoned that Pfizer’s petition was not
objectively baseless because it was supported by science
and the FDA believed it had merit. Dismissal on those
grounds was improper.
       Beyond immunizing certain petitioning in the
judicial system, Noerr-Pennington immunity also protects
petitioning of “all types of government entities.”
Cheminor Drugs, 168 F.3d at 122.               Petitions to
administrative agencies are consequently also immune
from antitrust liability. See id. But as with the immunity
extended for filing a lawsuit, Noerr-Pennington protection
will not apply to petitions that are a “mere sham to cover
what is actually nothing more than an attempt to interfere
directly with the business relationships of a competitor.”
Id. (quoting Noerr, 365 U.S. at 144). Petitioning that is
“objectively baseless in the sense that no reasonable
litigant could realistically expect success on the merits”
and “an attempt to interfere directly with the business
relationships of a competitor” will not be immune from
antitrust liability. Id. at 122–24 (quoting Prof’l Real
Estate Inv’rs, 508 U.S. at 60).

                            102
       Analyzing this exception to Noerr-Pennington
immunity, the District Court first concluded that the
citizen petition to the FDA could not have been
“objectively baseless” because it was supported by
science. That conclusion is incorrect given the pleading
standard here. Lipitor plaintiffs contend that Pfizer filed a
sham citizen petition raising baseless concerns about
Ranbaxy’s use of amorphous atorvastatin calcium in its
generic version of Lipitor. Lipitor plaintiffs allege Pfizer’s
petition was a sham because (1) it “ignored more than a
decade of FDA policy, the FDA’s 2002 rejection of a
similar argument in relation to the drug Ceftin, subsequent
FDA pronouncements reinforcing that the polymorphic
form of the drug (i.e., crystalline versus amorphous)
[were] immaterial to ANDA approval,” Lipitor JA242
(DPP Sec. Am. Compl. ¶ 95), (2) it ignored Pfizer’s own
use of the amorphous form of atorvastatin in its clinical
studies “to support the safety and efficacy of Lipitor,” id.,
(3) it lacked any evidence that amorphous atorvastatin
calcium “would not be pharmaceutically equivalent or
bioequivalent to branded Lipitor,” Lipitor JA241 (DPP
Sec. Am. Compl. ¶ 96), and (4) the FDA ultimately denied
Pfizer’s citizen petition. Those allegations plausibly
allege Pfizer submitted a sham petition not supported by
science. To conclude otherwise requires an evaluation of

                             103
the scientific merit of Pfizer’s petition. Such an inquiry is
unsuitable for resolution on a motion to dismiss. 21
       The District Court also determined the citizen
petition was not “objectively baseless” because the FDA
considered the petition on its merits. To reach that factual
conclusion, it observed that the FDA took several years to
reach a decision on the petition and that the FDA described
the petition as “complex.” Neither of those observations,
however, leads to the conclusion that Lipitor plaintiffs’
sham citizen petition allegations are implausible. All
citizen petitions are granted or denied by the FDA. See 21
C.F.R. § 10.30(e)(1) (“The Commissioner shall . . . rule
upon each petition . . . .”). Mere consideration of a
petition by an agency, even lengthy consideration, does
not immunize that petition. See Hanover 3201 Realty,

21
  Pfizer also argues that its mere submission of data to the
FDA in support of its petition renders implausible
allegations that the petition was a sham. Reading the
complaints in the light most favorable to Lipitor plaintiffs,
a reasonable inference is that the data submitted with the
petition only perpetuated Pfizer’s baseless attempt to
prevent Ranbaxy’s entry into Lipitor’s market. At the very
least, the mere submission of data in support of a petition
raises no inference that the petition itself possessed merit.
Put simply, Pfizer’s submission of data with its petition
does not make Lipitor plaintiffs’ sham petition allegations
implausible.
                            104
LLC v. Vill. Supermarkets, Inc., 806 F.3d 162, 180–83 (3d
Cir. 2015) (applying the sham exception to Noerr-
Pennington to defendants’ permit objections and
observing “[t]hat the [government agency] was required to
consider Defendants’ challenge does not mean that their
arguments had any bite”). Equating delay in consideration
of a petition or its complexity with the petition’s
underlying merits also fails to draw inferences in Lipitor
plaintiffs’ favor. Reasonable inferences from those facts
are that the FDA’s delay in deciding the petition had no
connection to the petition’s merits and that the petition’s
“complexity” also reflected little about its actual merits.
Moreover, according to Lipitor plaintiffs, the FDA
delayed in reaching a decision on the citizen petition, in
part, because it knew of the settlement agreement between
Ranbaxy and Pfizer. Lipitor JA269 (DPP Sec. Am.
Compl. ¶ 193 (“[O]nce [the] FDA learned of the fact that
the first generic for Lipitor, i.e., Ranbaxy’s, would not be
marketed until November 30, 2011, [the] FDA shifted
assets away from Ranbaxy’s ANDA and the Pfizer
petition . . . .”)).
      The District Court’s dismissal of Lipitor plaintiffs’
sham citizen petition allegations was error.

                              E
       The District Court finally dismissed Lipitor
plaintiffs’ allegations that Pfizer participated in an overall
monopolistic scheme. It dismissed those allegations based
                             105
on its dismissal of all the above allegations (i.e., the
allegations concerning Walker Process fraud, the false
Orange Book listing, sham litigation, and the sham citizen
petition). Because we conclude that those allegations are
plausible, we conclude that the District Court’s dismissal
of Lipitor plaintiffs’ allegations that Pfizer participated in
an overall scheme of monopolistic conduct was also error.
                             VI
       For the reasons stated, we will reverse the District
Court’s dismissals in both the Lipitor and Effexor
consolidated appeals. We will remand those consolidated
cases for further proceedings consistent with this opinion.

                             106