Forum non conveniens not appropriate because foreign courts cannot adjudicate US infringement

Halo Creative & Design, Ltd. V. Comptoir Des Indes, Inc., (Fed. Cir. Mar. 14, 2016) (Before Mayer, Dyk, and Hughes, J.) (Opinion for the court, Dyk, J.). Click Here for a copy of the opinion.

Halo sued Comptoir for infringing a large number of U.S. design patents, copyrights, and one common-law trademark relating to a number of Halo’s furniture designs.  Both companies manufacture and sell furniture. Comptoir is a Canadian company that manufactures furniture in China, Vietnam, and India, and then imports that furniture into the United States for sale.

Comptoir moved to dismiss the suit on forum non conveniens grounds, alleging that the Federal Court of Canada would be the appropriate forum for the dispute.  The district court granted the motion, reasoning that Halo could seek relief under Canadian law because Canada and the U.S. were both signatories of the Berne Convention.  The Berne Convention, in part, requires member states to grant foreign authors the same copyright protection as is available to their own citizens.  The district court further reasoned that “the United States has recognized the potential of applying the copyright laws of other nations and perhaps Canada could do likewise.”  Halo appealed.

The doctrine of forum non conveniens permits a federal court to dismiss a case if procceding in a foreign court would “best serve the convenience of the parties and the ends of justice.”  Whether a case should be dismissed begins by determining whether there exists “an alternative forum that is both adequate and available to hear the case.” A foreign jurisdiction is adequate only if the defendant is amenable to service there, the forum permits litigation of the subject matter of the dispute, and the available remedy is not clearly unsatisfactory.  If such a venue exists, the court should then weigh private and public interest factors, to see if such a dismissal is appropriate.  Both in the district court and on appeal, the parties argued forum non conveniens with respect to the copyright claim, and provided no analysis for patent or trademark claims.  Thus, the Court’s analysis was confined to the copyright claims.

[Troutman-Ad]

The Federal Circuit decided that Comptoir failed to show that Canada is an adequate alternative forum. While Comptoir would be amenable to process in Canada, a Canadian court may not be able to litigate the subject matter of the lawsuit, for two reasons.

First, the district court fundamentally misunderstood the Berne Convention.  That treaty requires that any rights a country grants to domestic authors and artists also be available to foreign authors and artists in that country.  There is no requirement that member countries provide a venue for litigating extraterritorial copyright disputes.  Territory is always a concern in copyright disputes. Thus, a US copyright does not apply to infringements abroad unless there is some predicate act within the US.  A leading Canadian copyright treatise confirmed that Canadian courts likewise do not have extraterritorial jurisdiction.  Federal courts routinely reject motions to dismiss for forum non conveniens when the proposed foreign jurisdiction would not have clear jurisdiction over the disputed subject matter.  The only evidence Comptoir provided to show that the Federal Court of Canada would have jurisdiction over a U.S. copyright dispute was a print-out of the court’s webpage, showing that it can adjudicate intellectual property rights generally.  The record on appeal contained no evidence that there was any infringing act in Canada that would provide the Federal Court of Canada jurisdiction over the case.  The only connection the case had to Canada was that the defendant was incorporated there.

Second, the district court’s suggestion that a Canadian Court might consider applying U.S. law is only speculation.  The district court cited no support for that proposition, nor has Comptoir shown any evidence that a Canadian court might apply US law.  Even in the few cases where U.S. courts have applied foreign intellectual property law, there was still a predicate infringing act within the forum’s jurisdiction. Again, there is no evidence that there was an infringing act in Canada.

Because Comptoir failed to show that the Federal Courts of Canada would be an adequate alternative forum to a U.S. district court for adjudicating infringement of U.S. copyrights, the district court abused its discretion by dismissing the case under the forum non conveniens doctrine.

[Troutman-About]