Thursday, April 28, 2016

The US Court of Appeals for the Federal Circuit reversed a district court decision dismissing a copyright infringement claim based on forum non conveniens grounds put forth by the Canada-based defendants. Halo Creative & Design Limited, et al. v. Comptoir Des Indes Inc., David Ouaknine, Case No. 15-1375 (Fed. Cir., Mar. 14, 2016) (Dyk, J).

Halo Creative & Design Limited, a Hong Kong company that designs and sells modern furniture in the United States, owns various patents, copyrights and common law trademarks covering its 25 furniture designs. Comptoir, a Canadian corporation, and Mr. Ouaknine, a Canadian resident, (together, the defendants) also design and sell furniture in the United States. Defendants’ furniture is manufactured in China, India and Vietnam and is imported and sold to US consumers directly at furniture shows and through distributors, including to consumers in Illinois.

In 2014, Halo filed a complaint in the US District Court for the Northern District of Illinois against the defendants, claiming that they infringed upon Halo’s intellectual property and violated Illinois’s consumer fraud and deceptive business practices statutes. Defendants moved to dismiss based on forum non conveniens, arguing that the Federal Court of Canada had jurisdiction to adjudicate design patents and trademarks.

The district court agreed and dismissed the suit based on forum non conveniens grounds, finding that the balance of interests favored Canada and that Canada, where the defendants reside, was an adequate forum. The district court reasoned that Canada is a signatory to the Berne Convention and that Halo is therefore entitled to all of the protections offered by Canadian copyright law to Canadian citizens. Halo appealed.

The Federal Circuit reversed and remanded the case, concluding that the district court abused its discretion in dismissing the lawsuit. “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. The policies underlying United States copyright, patent, and trademark laws would be defeated if a domestic forum to adjudicate the rights they convey was denied without a sufficient showing of the adequacy of the alternative foreign jurisdiction.” The fact that the United States, Canada and Hong Kong are all signatories to the Berne Convention does not mean that the Federal Court of Canada can provide a potential avenue for redress for the subject matter. Moreover, “[t]he Berne Convention does not require that member countries provide remedies for extraterritorial infringing activity. Nor does the Berne Convention require that Canada apply its laws extraterritorially.”