Law Office of Henry B. LaTorraca Civil Trial Attorney

Business contracts questioned, tech companies could be affected

What does an obscure biopharmaceutical company have in common with some of California's biggest tech ventures? Although it may seem that these businesses are worlds apart, business litigation related to that relatively unknown pharma company could have wide-reaching implications for other industries throughout the state. Legal issues such as the relationship between parent companies and subsidiaries are currently being addressed because of business torts that have been filed by the pharma company, Asahi Kasei Pharma.

That Japan-based business had entered a licensing deal with a local California startup known as CoTherix. The American company was working to obtain approval from the Food and Drug Administration for an angina drug created by Asahi. When CoTherix was purchased by another company in 2007, the new administrators ordered the subsidiary to stop testing the angina medication, citing potentially dangerous side effects. Needless to say, Asahi professionals were not pleased with this development.

The Japanese company engaged in a variety of legal maneuvers that ultimately led to CoTherix paying about $90 million in interest, damages and attorneys' fees. Still not satisfied with the loss of the business relationship, Asahi sued for tortious interference in California court, claiming that the umbrella company that purchased CoTherix had unfairly manipulated the licensing agreement. A jury awarded that company hundreds of millions, and that judgment was upheld by an appeals court. The case may still be considered by the California Supreme Court.

Tech giants are understandably worried, as they believe they could be subject to business tort accusations because of their serial acquisitions. Companies that purchase subsidiaries and change their business models may end up in the hot seat if tortious interference is alleged. A California business attorney may be able to provide additional information for large companies who are interested in the ripple effect produced by the aforementioned case.

Source: Bloomberg Businessweek, "An Obscure Pharma Lawsuit Puts California's Tech Titans on Edge" Paul M. Barrett, Mar. 12, 2014

No Comments

Leave a comment
Comment Information

Creative Solutions for Complex Legal Issues

Map email us for a response

Contact the Law Office of Henry B. LaTorraca

Prospective clients are invited to contact attorney LaTorraca at 562-216-2942 for an initial lawyer consultation to discuss their legal matter.

*AV Preeminent is a certification mark of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the Bar and the judiciary. Martindale-Hubbell ratings fall into two categories - legal ability and general ethical standards.

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Follow Henry B. LaTorraca Via Social Media

400 Oceangate Suite 700 Long Beach, CA 90802-4306 Phone: 562-216-2942 Fax: 562-216-2943 Map & Directions

facebook google plus LinkedIn directions