Where should a lawsuit be heard? Canada? The US? In
other posts we discuss the idea of a
"choice of law" and "forum selection" clauses
in contracts. In those cases, the parties agree to a particular
forum in advance.
What if there is no contractual relationship? There's just
an intellectual property infringement claim. What is the proper
forum for that dispute to be heard?
Halo Creative, a Hong Kong based furniture maker, launched
an IP infringement lawsuit against Comptoir Des Indes, Inc., a
Canadian company, and its CEO, claiming infringement of Halo's
U.S. design patents, U.S. copyrights, and one U.S. common law
trademark. The lawsuit was filed in the Northern District of
Illinois. The Canadian company moved to dismiss the lawsuit
based on a "forum non conveniens" argument –
essentially an argument that the Federal Court of Canada would
be a better place to litigate the claims. The
Illinois district court agreed with the Canadians and
dismissed the case. Halo appealed. At the appeal level, the
court looked at the adequacy of the Canadian court to litigate this
The Federal Court of Canada was certainly an available
forum but there was no evidence that Halo could seek a
satisfactory remedy there, since the infringing activity took place
in the U.S., and the infringed rights were all based on U.S.
registrations or U.S. based trademark rights. IP rights are
fundamentally territorial. The U.S. court even quoted a
Canadian textbook: "a Canadian court would not have
jurisdiction to entertain in an action brought by an author of a
work in respect of acts
being committed outside Canada, even if the defendant was
within Canada." (Emphasis added) Here, there was no
evidence that any infringement occurred in Canada.
The motion was dismissed and the lawsuit will proceed in
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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