Monday, March 14, 2016

CAFC in Halo Creative: It is particularly important that a forum non conveniens movant demonstrate the adequacy of an alternative forum when the dispute implicates the enforcement of intellectual property rights

Of the background of the case:

Halo Creative & Design Ltd., Halo Trademarks Ltd.,
and Halo Americas Ltd. (collectively, “Halo”), own two
U.S. design patents, thirteen U.S. copyrights, and one
U.S. common law trademark relating to twenty-five of
their furniture designs. Halo is located in Hong Kong.
Halo sued Comptoir Des Indes, Inc. (“Comptoir”), a Canadian
company, and its CEO, David Ouaknine (collectively,
“appellees”), a Canadian resident, in the Northern District
of Illinois. Halo asserted that appellees infringed
their intellectual property and violated Illinois consumer
fraud and deceptive business practices statutes.
Appellees moved to dismiss on forum non conveniens
grounds, contending that the Federal Court of Canada
would be a superior forum. The district court granted the
motion and dismissed the case. Halo Creative & Design
Ltd. v. Comptoir Des Indes, Inc., No. 14C8196, 2015 WL
426277, at *3 (N.D. Ill. Jan. 29, 2015) (“Halo”). Halo
appeals. We reverse and remand for further proceedings


The district court concluded that Canada would be an
adequate forum. It explained that Halo could seek relief
for its copyright claims under Canadian law, because
Canada, Hong Kong, and the United States are all signatories
of the Berne Convention. Further, even though
there was no evidence that the Canadian courts would
apply United States law, the court reasoned that “the
United States has recognized the potential of applying the
copyright laws of other nations and perhaps Canada could
do likewise.” Halo, 2015 WL 426277, at *2. The court did
not address Halo’s design patent, trademark, or state law

As to law:

The doctrine of forum non conveniens has a long
history. Although transfer between federal courts was
codified in 28 U.S.C. § 1404(a), forum non conveniens
concerning foreign and state venues has always been a
common-law doctrine. Piper Aircraft, 454 U.S. at 253;
14D Charles Alan Wright et al., Federal Practice and
Procedure § 3828 (4th ed.). In 1947, the Supreme Court
recognized that the doctrine applies to suits in federal
district court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
507 (1947), and Koster v. (American) Lumbermens Mutual
Casualty Co., 330 U.S. 518, 526 (1947). Forum non conveniens,
the Court explained, allows a federal district
court to dismiss a suit over which it would normally have
jurisdiction if trial in a foreign forum would “best serve
the convenience of the parties and the ends of justice.”
Koster, 330 U.S. at 527.

Of analysis

There is no evidence in the record that any act of alleged
infringement occurred in Canada.6 There is no
evidence that appellees’ furniture is designed in Canada,
or that the allegedly infringing furniture was shipped
through Canada to the United States after manufacture
in Asia. It is undisputed that the only evidence of any
connection to Canada in the record is that appellees have
their principal place of business there. But this fact alone
cannot suffice. The question is whether the Federal Court
of Canada could provide “some potential avenue for ...


Second, the district court explained that “the United
States has recognized the potential of applying the copyright
laws of other nations and perhaps Canada could do
likewise.” Halo, 2015 WL 426277, at *2. But this is mere
speculation as to what the Canadian courts would do.
The district court cited no support for the proposition that
a Canadian court could or would apply United States
copyright law, or, for that matter, patent or trademark
law. Nor have appellees adduced any such evidence. On
appeal, appellees do not even argue that the Federal
Court of Canada would apply United States law. To the
contrary, it appears that the only intellectual property
law the Federal Court of Canada would apply is its own.


Thus, based on the evidence in the record, the Federal
Court of Canada would fail to provide any “potential
avenue for redress for the subject matter” of Halo’s dispute,
Stroitelstvo, 589 F.3d at 421, even with regard to
Halo’s claims of copyright infringement. The district
court abused its discretion in concluding otherwise.



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