VISA USA v. First Data Corporation, et al.

Some of the most complex and contentious aspects of contemporary antitrust litigation involve threshold determinations about what kind of market participants are entitled to bring antitrust cases.  These controversies are typically played out in the context of two related, but distinct concepts.  The first is standing to sue, and the second is whether the type of injury allegedly suffered by the plaintiff is of the sort which the antitrust laws were intended to remedy, typically referred to as "antitrust injury."  In a recent unreported decision the Northern District of California wrote at length about both of these topics in the complex context of a challenge to basic aspects of the VISA interbank credit card system brought by First Data Incorporated, a small processor of credit card transactions seeking to both process VISA credit card transactions and offer credit card interchange services.  VISA USA v. First Data Corporation, et al., No. C02-01786 (May 12, 2006, N.D.Cal.).  Readers should note that the decision discussed below is only one of the latest in a series of private and government cases reflecting a variety of different challenges under state and federal antitrust law to the VISA bank credit card network.

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DOJ & FTC Split on Reverse Payment Patent Settlements; Supreme Court Punts

As summarized in the April, 2005 edition of the Antitrust Law Blog, in Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir. 2005), the Eleventh Circuit held that a reverse payment settlement of patent infringement suit was lawful under the antitrust laws.  Reverse payment settlements are those in which the plaintiff patentee pays the alleged infringer to stay off the market for some period of time and commonly occur in the context of the Hatch-Waxman Act.  In so ruling, the Eleventh Circuit reversed a unanimous decision by the FTC.  The basic rationale of the Eleventh Circuit decision was that Schering’s payments were bona fide consideration for drug licenses, not just payments to keep generics off the market.  Moreover, since the entry date was still prior to the expiration of the patent and otherwise within the scope of the patent, the court also held that the settlements were within the patent’s lawful exclusionary power and therefore not anticompetitive. 

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Canada Debates Expanding Private Access to Competition Tribunal

Antitrust litigation in Canada differs significantly from that in the United States.  Whereas private antitrust litigation has been widespread and robust for many years in the U.S., private antitrust litigation in Canada has been slow to grow.  However, increasing calls for expanding private parties' access to antitrust lawsuits in Canada signal that Canada may be in store for a growth spurt.  Companies doing business in Canada should thus take note that private enforcement of Canada's antitrust law is likely to escalate.

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Asserted Economic Retaliation Against Plaintiff Based on Plaintiff's Rejection of the Defendant's Sexual Advances Did Not Violate Section 1 or 2 of the Sherman Act

In an unpublished opinion, designated as "not precedential," the Third Circuit recently affirmed the District Court's dismissal pursuant to the Federal Rule of Civil Procedure 12(b)(6) of antitrust claims that were predicated on a doctor's asserted economic retaliation against a nurse after she rebuffed his sexual advances.  Stark v. Ear Nose & Throat Specialists of Northwestern Penn., No. 05-2345, 2006 WL 1371571 (3rd Cir. May 19, 2006).  The plaintiffs were Beata and Norman Stark ("Stark"), and Beata Clinical Research Services ("BCRS"), who provided administrative and contractual support services to drug manufacturers and drug research firms.  Id. at *1, *4.  Defendants, Dr. Anon, his company, Ear Nose & Throat Specialists of Northwestern Penn. ("ENT"), and Robert Budacki, who was one of ENT's employees, engaged in drug and medical research in the field of ear, nose and throat.  Id.  The relationship between the defendants and Plaintiffs was essentially one of contractor and subcontractor.  Id. at *2. 

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