Halo Creative & Design Ltd. v. Comptoir Des Indes Inc., 2015–1375.

• Decision Date: 14 March 2016
• Docket Number: No. 2015–1375.,2015–1375.
• Citation: 816 F.3d 1366
• Parties: HALO CREATIVE & DESIGN LIMITED, Halo Trademarks Limited, Halo Americas Limited, Plaintiffs–Appellants v. COMPTOIR DES INDES INC., David Ouaknine, Defendants–Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

816 F.3d 1366

HALO CREATIVE & DESIGN LIMITED, Halo Trademarks Limited, Halo Americas Limited, Plaintiffs–Appellants

v.COMPTOIR DES INDES INC., David Ouaknine, Defendants–Appellees.

No. 2015–1375.

United States Court of Appeals, Federal Circuit.

March 14, 2016.

Barry Horwitz, Greenberg Traurig LLP, Chicago, IL, argued for plaintiffs-appellants. Also represented by Richard Daniel Harris.

Mark Ray Bagley, Tolpin & Partners, PC, Chicago, IL, argued for defendants-appellees.

Before DYK, MAYER, and HUGHES, Circuit Judges.

DYK

, Circuit Judge.

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.

BACKGROUND

Halo is a Hong Kong private company that designs and sells high-end modern furniture. It is the exclusive owner of U.S. Design Patent Nos. D655,526 S

and D655,100 S, thirteen U.S. copyrights,¹ and one U.S. common law trademark, all relating to twenty-five of its furniture designs. Halo's common law trademark, ODEON, is used in association with at least four of its designs. Halo sells its furniture in the United States, including through its own Timothy Oulton retail stores. Appellee Comptoir, a Canadian corporation, also designs and markets high-end furniture. Comptoir's furniture products are produced by manufacturers in China, Vietnam, and India. Comptoir's furniture products are imported into the United States, where Comptoir offers its products for sale to consumers directly at various furniture shows and also through several distributors across the country, including in the Northern District of Illinois.

On October 20, 2014, Halo brought suit against appellees in the Northern District of Illinois, alleging infringement of its U.S. design patents, copyrights, and trademark. Halo also alleged that appellees had violated Illinois consumer fraud and deceptive business practices statutes. Halo accused twenty-five of appellees' products of infringement. Twenty-three of those twenty-five were the subject of Halo's copyright infringement allegations. With respect to two products, Halo alleged infringement only of its design patents. Four of appellees' products were also alleged to infringe Halo's trademark.

Appellees moved to dismiss on forum non conveniens grounds, contending that Canada, where appellees reside, "is a far superior forum in which to resolve this dispute." A. 229.² Appellees' theory was that a copyright remedy would be available in the Federal Court of Canada. Appellees' only evidence concerning the remedies available in the Federal Court of Canada was a printout of a webpage from the site of the Federal Court of Canada. The webpage explained that the Federal Court of Canada has jurisdiction to adjudicate "intellectual property rights, including copyright, industrial design ... patents ... and trade-marks." A. 249. Appellees did not adduce any expert testimony regarding the adequacy of the Federal Court of Canada as an alternative forum. Nor did appellees submit any evidence that the Canadian courts could provide a remedy for United States infringement. Halo opposed the motion, arguing both that Canada would not be an adequate forum to resolve its United States intellectual property dispute and that private and public interests militated against dismissal.

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 allegations.

The district court then balanced the private and public interests. As for private interests, the district court found that access to proof and the cost of obtaining attendance of willing witnesses weighed in favor of appellees. As for public interests, the district court found that the existence of a local interest in having localized controversies decided at home was neutral, while familiarity with governing law pointed perhaps slightly in Halo's favor. Balancing all of the interests, the district court concluded that they weighed in appellees' favor. Accordingly, the district court dismissed the complaint.

Halo appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1)

. Under Seventh Circuit law, we review a district court's grant of a motion to dismiss on forum non conveniens grounds for abuse of discretion. Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847, 866 (7th Cir.2015) ; see also Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981).

DISCUSSION

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, 102 S.Ct. 252 ; 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, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), and Koster v. (American) Lumbermens Mutual Casualty Co., 330 U.S. 518, 526, 67 S.Ct. 828, 91 L.Ed. 1067 (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, 67 S.Ct. 828. Whether dismissal would promote convenience and justice should be determined by weighing various private and public interest factors. See Gilbert, 330 U.S. at 508, 67 S.Ct. 839. Such private interest factors include: "the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining the attendance of unwilling, witnesses; [and the] possibility of view of the premises." Id. Public interest factors include: "congest[ion]" of the courts; the burden of jury duty imposed upon a "community which has no relation to the litigation"; "a local interest in having localized controversies decided at home"; and the potential for a "conflict of laws." Id. at 508–09, 67 S.Ct. 839.

The Supreme Court returned to the doctrine of forum non conveniens in Piper Aircraft. There the Court confronted a wrongful death action arising out of a plane crash in Scotland. 454 U.S. at 238–39, 102 S.Ct. 252

. All of the decedents were Scottish residents, and their administrator brought suit against the American plane and propeller manufacturers in United States district court, asserting, inter alia, strict tort liability theories. Id. at 239–40, 102 S.Ct. 252. The district court dismissed on forum non conveniens grounds, but the Third Circuit reversed, reasoning that strict tort liability theories were unavailable in Scotland, and thus dismissal would "work a change in the applicable law" such that forum non conveniens dismissal was precluded. Id. at 246, 102 S.Ct. 252.

The Supreme Court disagreed. Every forum non conveniens inquiry, the Court explained, must begin with a determination of whether there exists an alternative forum that is both adequate and available to hear the case. Id. at 254 n. 22, 102 S.Ct. 252

. An alternative forum is available if "the defendant is ‘amenable to process' in the other jurisdiction." Id. An alternative forum is adequate unless "the remedy offered by the other forum is clearly unsatisfactory," as when "the alternative forum does not permit litigation of the subject matter of the dispute." Id. Contrary to the holding of the Third Circuit, "[t]he possibility of a change in substantive law" does not automatically render an alternative forum inadequate. Id. at 247, 102 S.Ct. 252. Rather, an alternative forum is inadequate only if the remedy it would provide is "so clearly inadequate or unsatisfactory that it is no remedy at all." Id. at 254, 102 S.Ct. 252. If no available and adequate alternative forum exists, forum non conveniens dismissal is not permitted. Id. at 254 n. 22, 102 S.Ct. 252. If such an alternative forum does exist, district courts must proceed to balance the private and public interest factors described in Gilbert to determine whether dismissal is warranted. See id. at 257, 102 S.Ct. 252.

It is clear after Piper Aircraft that an alternative forum is not adequate unless it "permit[s] litigation of the subject matter of the dispute." Id. at 254 n. 22, 102 S.Ct. 252

; see also Kamel v. Hill–Rom Co., Inc., 108 F.3d 799, 803 (7th Cir.1997) ("An alternative forum is adequate when the parties will not be deprived of all remedies or treated unfairly."). In other words, adequacy is determined by whether the foreign forum will provide "some potential avenue...