I attended a webninar by Morgan Lewis on the case study Asahi (Japan) vs Actelion (Swiss), who accquired CoTherix in the US. Asahi had a licensing agreement with CoTherix for the development of Fasudil in the US for PAH. Actelion allegedly bought CoTherix to avoid competition for their $1.5B PAH drug, Tracleer and halted development of Fasudil. To cut a long story short, due to the weak termination clause in the agreement, CoTherix/ Actelion were unable to terminate the agreement and return Fasudil to Asahi. On top of that, strong diligence as well as 'too broad liability clauses' also protected Asahi. During the discovery process in the litigation, Actelion executives left discriminating handwritten notes.

Result? California Judge entered a $516.7 million judgment in favor of Asahi Kasei Pharma Corp. in the case Asahi Kasei Pharma Corp. v. Actelion Ltd. The total awarded to Asahi for its claims in this matter will exceed $607 million, consisting of this judgment and a $91 million International Chamber of Commerce (ICC) arbitration award that Actelion-subsidiary CoTherix, Inc. paid to Asahi in 2010. In addition, the $516 million state court judgment will now earn approximately $50 million a year in interest while Actelion appeals the decision.

It is worthwhile to be VERY diligent in drafting your License Agreements!