Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571

Ixchel Pharma entered a Collaboration Agreement with Forward Pharma to co-develop a DMF-based drug for Friedreich’s ataxia; Forward could terminate the agreement at will with 60 days’ notice.
Forward settled a separate patent dispute with Biogen and, in the Forward–Biogen Agreement, agreed (section 2.13) to terminate and not enter contracts related to DMF drug development, which caused Forward to end its collaboration with Ixchel.
Ixchel sued Biogen in federal court for antitrust violations, tortious interference with contract and prospective economic advantage, and UCL violations; the district court dismissed; Ninth Circuit certified two questions to the California Supreme Court.
Certified questions: (1) whether interference with an at‑will contract requires an independently wrongful act; (2) whether Business & Professions Code §16600 voids business‑to‑business restraints per se or is governed by a rule of reason.
The California Supreme Court held that interference with at‑will contracts requires pleading an independently wrongful act, and that §16600 restraint‑of‑trade claims between businesses are evaluated under a rule‑of‑reason standard; the Court did not decide the factual validity of the Forward–Biogen provision.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Must a plaintiff plead an independently wrongful act to state tortious interference with an at‑will contract?	No — interference with contract is actionable without independent wrongfulness (relying on older precedent).	Yes — Reeves and Restatement reasoning require independent wrongfulness for at‑will contracts to avoid chilling competition.	Yes. A plaintiff alleging interference with an at‑will contract must plead independent wrongfulness.
Does §16600 void business‑to‑business restraints per se, or is a rule of reason applied?	Per se void — Edwards interpreted §16600 strictly (Ixchel urges broad application).	Rule of reason — §16600 should be read consistent with Cartwright Act/common‑law reasonableness in the commercial context.	Rule of reason applies to business‑to‑business restraints under §16600; §16600 covers business contracts but reasonableness must be assessed.
Is the Forward–Biogen Agreement’s section 2.13 independently wrongful under §16600?	Section 2.13 unlawfully restrains Forward from doing DMF work with Ixchel or others.	The provision should be judged under the rule of reason and may be lawful; Biogen denies per se illegality.	The Court expressed no view on the merits; validity of §2.13 must be determined under the rule of reason.

Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal.4th 376 (Cal. 1995) (established independent‑wrongfulness requirement for interference with prospective economic advantage)
Reeves v. Hanlon, 33 Cal.4th 1140 (Cal. 2004) (held independent‑wrongfulness required for interference with at‑will employment contracts)
Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (defined when an act is "independently wrongful")
Quelimane Co. v. Stewart Title Guaranty Co., 19 Cal.4th 26 (Cal. 1998) (recognized intentional interference with an existing contract as a standalone wrong)
Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (Cal. 2008) (confirmed §16600 prohibits employee noncompetition agreements unless an exception applies)
Great Western Distillery Products v. John A. Wathen Distillery Co., 10 Cal.2d 442 (Cal. 1937) (applied a reasonableness inquiry to business restraints under former Civil Code §1673)
Pacific Gas & Electric Co. v. Bear Stearns & Co., 50 Cal.3d 1118 (Cal. 1990) (outlined interference tort elements and reserved whether at‑will contracts require independent wrongfulness)