Halo Creative & Design v. Comptoir Des Indes Inc., No. 2015-1375 (Fed. Cir. Mar. 14, 2016) [click for opinion]
Halo Creative & Design ("Halo"), a Hong Kong corporation, sued Comptoir Des Indes, Inc. ("Comptoir"), a Canadian corporation, in the U.S. District Court for the Northern District of Illinois, pleading claims for trademark, copyright, and patent infringement, as well as claims for violation of Illinois consumer fraud and deceptive business practices statutes. Halo alleged that all infringing acts occurred in the U.S., but Comptoir argued that the Federal Court of Canada was a more appropriate forum for the dispute and moved to dismiss on forum non conveniens grounds. The district court granted Comptoir's motion and dismissed the complaint. Halo appealed to the Federal Circuit Court of Appeals pursuant to 28 U.S.C. § 1295(a)(1), and the Federal Circuit reversed.
In considering whether the district court abused its discretion in dismissing Halo's complaint, the Federal Circuit summarized the common law forum non conveniens doctrine, which 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." Though the Federal Circuit noted that various private and public interest factors ordinarily are considered in determining whether dismissal would promote convenience and justice, it emphasized that every forum non conveniens inquiry must begin with a determination of whether an alternative forum exists to hear the dispute that is both available and adequate.
The court held that the availability of the Canadian forum was not at issue, since Comptoir could be sued in Canada as a Canadian corporation. However, for a foreign venue to be adequate, it must provide "some potential avenue for redress for the subject matter of the dispute." The Federal Circuit concluded that Comptoir failed to set forth sufficient proof that infringement that occurred exclusively within the U.S. could be redressed by a Canadian court.
In arguing for dismissal, Comptoir focused solely on copyright issues, providing evidence that the Canadian court could litigate claims for Canadian copyright violations and that under the Berne Convention, Halo would be entitled to full protections available to Canadian citizens under Canadian law. Notably, though, Comptoir did not show that Canadian citizens could successfully sue in Canadian courts for extraterritorial acts of infringement. Because Comptoir did not demonstrate that Canadian courts could provide any relief for violation of U.S. intellectual property rights causing injury that was felt in the U.S., the Federal Circuit concluded that Canada did not provide an adequate alternative forum.
In reaching this conclusion, the Court emphasized that intellectual property claims typically are territorial in nature, and consequently motions to dismiss on forum non conveniens grounds are routinely denied in intellectual property cases. The Federal Circuit reversed and remanded, holding that Comptoir failed to meet its burden of proof and that the lower court abused its discretion in granting the motion to dismiss.