Applying the doctrine of forum non conveniens, the U.S. Court of Appeals for the Third Circuit upheld a district court’s case dismissal in favor of litigating in France. Eurofins Pharma US Holdings v. BioAlliance Pharma SA, Case No. 09-3790 (3d Cir., Oct. 12, 2010) (Greenaway, J.).

There are four key parties in this case. Two are Eurofins Pharma US Holdings (Eurofins) and its wholly owned subsidiary Viralliance Inc. (VI), collectively, Eurofins. The other two are BioAlliance Pharma SA and its wholly owned subsidiary Viralliance SAS (VSAS), collectively, BioAlliance. Eurofins and VI are Delaware companies with principal places of business in Iowa. BioAlliance and VSAS are French entities.

The dispute arose from an intellectual property transfer agreement executed in 2005. The negotiations leading to the agreement occurred in France, as did the agreement’s execution. The Transfer Agreement required BioAlliance Group to transfer its IP to VI. BioAlliance warranted that, to the best of its knowledge, the use of its intellectual property by its licensees neither infringed nor was unauthorized.

One of the BioAlliance Group’s licensees was Specialty Laboratories, which was owed an indemnification obligation by BioAlliance provision. Eurofins Group assumed that indemnification obligation under the Transfer Agreement. In 2007, a company named ABL sued Specialty Laboratories for patent infringement, and VI defended that action pursuant to the indemnification. While VI negotiated settlement of that lawsuit, it learned that ABL contacted BioAlliance Group regarding infringement of the same patents. Gilles Avenard, a VI director, confirmed BioAlliance Group’s knowledge of ABL’s allegation of infringement. After Eurofins filed suit against BioAlliance alleging fraud and breach of contract, the district court dismissed the suit, finding that BioAlliance had a principle place of business in France, which provided an adequate forum. The district court further ruled that it lacked personal jurisdiction over the defendant. Eurofins appealed.

After considering personal jurisdiction issues, the 3d Circuit turned to the issue of forum non conveniens and upheld case dismissal. The 3d Circuit agreed with the district court that France was an adequate alternate forum, despite Eurofin’s argument that French discovery devices are inadequate. The court explained that Eurofin’s choice of forum was outweighed by the public and private interest factors of the case. The facts showed that the agreement’s negotiations occurred in France and included a French entity; the agreement was executed in France, all the evidence, including witnesses, is in France; and ABL conducts business in France. For these reasons, the suit was dismissed in favor of litigating in France.

Practice Note: When selecting a forum in which to sue a non-U.S. entity, be mindful of where the crux of the events behind the allegations occurred.