Asahi Kasei Pharma Corp. v. Actelion Ltd.

Facts

Plaintiff, a Japanese pharmaceutical company, developed a drug to treat pulmonary arterial hypertension called Fasudil. Plaintiff sought to market the drug in North America and Europe, so it entered into a licensing agreement with CoTherix, Inc. CoTherix was a U.S.-based biopharmaceutical company with a history of bringing similar drugs to market quickly. Plaintiff sought this agreement with CoTherix based on this history, in order to quickly bring Fasudil to market and capitalize on the period of market exclusivity before generic competitors became available. At the time, Plaintiff’s market competitor was Defendant, a Swiss company that held the prevailing share of the U.S. pulmonary arterial hypertension drug market. After the licensing agreement was signed, Defendant purchased all of CoTherix’s stock and notified Plaintiff that CoTherix would no longer work to develop Fasudil. Plaintiff sued Defendant as well as three of its executives for intentional interference with the licensing agreement. Plaintiff provided evidence that Defendant bought out CoTherix in order to keep Plaintiff from cutting into its share of the market. The case went to trial, where the jury was instructed that a person is not liable for interfering if the person was a party to the contract at the time of the interference. The jury was also instructed that a defense of justification existed when a defendant could show that its conduct was justified, but that the defense was unavailable if the defendant used unlawful means to interfere with the contract, such as intentional misrepresentation, concealment, or extortion. The jury found for Plaintiff, awarding $550 million in compensatory damages and $30 million in punitive damages. Defendant appealed, arguing that Defendant was not a stranger to the contract once it had purchased CoTherix. Plaintiff responded by arguing that defenses of privilege or justification are not available when defendants used improper means.