Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130

Plaintiff had an at-will contract with a non-party to develop a drug based on a certain active ingredient.  Defendant Biogen reached its own deal with that non-party to settle patent disputes and to license the same active ingredient—requiring that the at-will contract with Plaintiff be terminated.  Plaintiff sued Biogen in federal court for tortious interference with contract, arguing that Biogen’s agreement violated a California statute barring contract provisions that restrain any trade or profession.  The Ninth Circuit certified the matter to the California Supreme Court.

The California Supreme Court ruled in favor of Biogen, represented by GMSR partner Laurie Hepler who argued the case, and Ropes & Gray, D.C.  Clearing up uncertainty in California law, the Court held that (1) To state a claim for tortious interference with an at-will contract, a plaintiff must plead and prove an independently wrongful act, beyond interfering with the contract itself; and (2) California’s statutory prohibition on contract provisions restraining trade—when applied to one business restraining another—is subject to the same rule of reason analysis prescribed by antitrust common law.

Supreme Court Opinion – View Document

Bloomberg Law: Biogen Ruling Reinforces Competitive Protections for Drugmakers