Creative Technology, Ltd., a Singapore Corporation v. Aztech System Pte, Ltd, a Singapore Corporation Aztech Labs, Inc., a California Corporation

61 F.3d 696, 95 Cal. Daily Op. Serv. 5751, 35 U.S.P.Q. 2d (BNA) 1590, 95 Daily Journal DAR 9814, 1995 U.S. App. LEXIS 19179, 1995 WL 431737

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 24, 1995
• Docket: 93-16997
• Status: Published

Opinions

Opinion by Judge FLOYD R. GIBSON; Dissent by Judge FERGUSON.

FLOYD R. GIBSON, Senior Circuit Judge.

Creative Technology appeals the district court’s forum non conveniens dismissal of its copyright infringement action. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291 (1988), and we affirm.

I. BACKGROUND

Appellant Creative Technology, Ltd. (Creative) and Appellee Aztech Systems Pte. Ltd. (Aztech) are competing Singapore corporations in the business of developing, manufacturing, and distributing sound cards.¹ Both Aztech’s and Creative’s principal place of business is Singapore. All the sound cards are designed, developed, and manufactured in Singapore. Creative markets its sound cards in the United States under the brand name “Sound Blaster” through Creative Labs, Inc., a California corporation and wholly owned subsidiary. Aztech, in turn, markets its sound cards in the United States under the brand name “Sound Galaxy” through Appellee Aztech Labs, Inc. (Aztech Labs), another California corporation and wholly owned subsidiary.

The present action arises from a protracted copyright dispute between Creative and Aztech. The first round of copyright litigation erupted in November of 1992 when Creative, which holds twelve registered United States copyrights in its Sound Blaster series, publicly accused Aztech of infringing on its copyrighted material through the manufacture and distribution of Aztech’s Sound Galaxy series. Aztech filed the equivalent of a declaratory relief action in Singapore under the Singapore Copyright Act, ultimately resulting in a settlement agreement on December 7, 1992.

Following the repudiation of this agreement, Creative filed suit in the United States District Court for the Northern District of California, claiming that Aztech’s reproduction, adaptation, and United States distribution of “Sound Blaster clones” violated Creative’s exclusive rights under 17 U.S.C. §§ 106 and 501 (1988) of the United States Copyright Act. Aztech responded by filing an action against Creative in the High Court of Singapore, alleging breach of the settlement agreement and seeking declaratory relief once again under the Singapore Copyright Act. Creative, in turn, filed mandatory counterclaims in Singapore alleging copyright infringement based on the manufacture of “Sound Blaster clones” in Singapore and their distribution abroad. Aztech Labs has consented to Singapore jurisdiction and is now a party to the ongoing Singapore action.

Aztech filed a motion to dismiss the United States action under the forum non conve-niens doctrine. The district court granted Aztech’s motion, concluding that Singapore offered an adequate alternative forum and that the balance of public and private interest factors favored dismissing the action in favor of adjudication in Singapore. Creative appeals.

II. DISCUSSION

The party moving for forum non conveniens dismissal must demonstrate two things: (1) the existence of an adequate alternative forum; and (2) that the balance of relevant private and public interest factors favor dismissal. Contact Lumber Co. v. P.T. Moges Shipping Co. Ltd,., 918 F.2d 1446, 1449 (9th Cir.1990) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947)). Creative raises three primary issues on appeal: (1) whether the district court erred in concluding that the forum non conveniens doctrine applies to the United States Copyright Act; (2) whether the district court abused its discretion in concluding that the High Court of Singapore will provide an adequate alternative forum; and (3) whether the district court abused its discretion in determining that the balance of relevant public and private interest factors favors dismissal. The scope of our review is narrow:

The forum non conveniens determination is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion; where the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference.

Ceramic Corp. of America v. Inka Maritime Corp., 1 F.3d 947, 949 (9th Cir.1993) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 266, 70 L.Ed.2d 419 (1981)).

A. Applicability of the Forum Non Con-veniens Doctrine

The forum non conveniens doctrine is inapplicable to certain federal statutes such as the Jones Act¹ or the Federal Employers’ Liability Act² (FELA) which contain special provisions mandating venue in the United States district courts. Zipfel v. Halliburton Co., 832 F.2d 1477, 1487 (9th Cir.1987), cert. denied, 486 U.S. 1054, 108 S.Ct. 2819, 100 L.Ed.2d 921 (1988). Because of this, a choice of law determination must be made before the district court dismisses an action under the forum non conveniens doctrine. Pereira v. Utah Transp., Inc., 764 F.2d 686, 688 (9th Cir.1985), cert. dismissed, 475 U.S. 1040, 106 S.Ct. 1253, 89 L.Ed.2d 362 (1986). Creative argues that its claim is governed exclusively by the United States Copyright Act, 17 U.S.C. § 101 et seq. (1988). As a result, Creative contends that the forum non conveniens doctrine is inapplicable to its claim because 28 U.S.C. § 1338(a)³ invests the federal district courts with “exclusive” jurisdiction over claims arising under the United States Copyright Act.

Regardless of which nation’s law applies, Creative’s argument is without merit. The inapplicability of the forum non conveniens doctrine to the Jones Act and FELA is based on “[a] privilege of venue, granted by the legislative body which created this right of action....” Baltimore & Ohio R.R. Co. v. Kepner, 314 U.S. 44, 54, 62 S.Ct. 6, 10, 86 L.Ed. 28 (1941). As the Eleventh Circuit explained in La Seguridad v. Transytur Line, 707 F.2d 1304 (11th Cir.1983), “[t]he court must ascertain if there is anything about the specific federal statute which indicates that Congress implicitly spoke to, and rejected, the application of forum non conve-niens doctrine to a suit thereunder.” Id. at 1310 n. 10. 28 U.S.C. § 1338(a) is not the same type of mandatory venue provision found in either the Jones Act or FELA. That statute merely states that United States district courts shall have exclusive jurisdiction of United States copyright claims over state courts.

Our conclusion is reinforced by this Court’s previous decision in Lockman Found. v. Evangelical Alliance Mission, 930 F.2d 764 (9th Cir.1991). In that decision, the plaintiff brought an action for certain non-copyright claims and for copyright infringement under both United States and Japanese law. Id. at 766. Following the forum non conveniens dismissal of its complaint by the district court, the plaintiff appealed both the dismissal of its noncopyright claims and the district court’s refusal to allow it to amend its complaint to drop the copyright claims. Id. This Court affirmed both the district court’s forum non conveniens dismissal and its decision to deny the plaintiffs motion to amend its complaint, concluding that the copyright and non-copyright claims were too closely intertwined to be severed. Id. at 772. Based on an analysis of the complaint as a whole, including the copyright claims, we concluded that “[i]n this case, there is no arguably applicable law that would end the forum non conveniens inquiry, so no potentially dispositive choice of law determination need have been made.” Id. at 771. We believe this statement of the law to be equally applicable to the instant ease.

The dissent inaccurately faults our decision for failing to take the principle of national treatment into account. Both the Universal Copyright Convention (U.C.C.) and the Berne Convention for the Protection of Literary and Artistic Works (Berne) mandate a policy of national treatment in which copyright holders are afforded the same protection in foreign nations that those nations provide their own authors. See U.C.C. Art. II; Berne, Art. V. The dissent accurately points out that the principle of national treatment implicates a rule of territoriality in which “ ‘[t]he applicable law is the copyright law of the state in which the infringement occurred, not that of the state of which the author is a national or in which the work was first published.’ ” Subafilms, Ltd. v. MGM-Pathe Comm., 24 F.3d 1088, 1097 (9th Cir.1994) (en bane) (quoting 3 David Nimmer and Melville B. Nimmer, Nimmer on Copyright § 17.05 at 17-39 (1994)).

The law of this forum, however, includes the forum non conveniens doctrine. The dissent argues that “the principle of national treatment requires that United States copyright law be applied in order to remedy infringing conduct that occurred in the United States.” Post at 706. We do not agree with this sweeping conclusion. National treatment and territoriality are choice of law principles, See Subafilms, 24 F.3d at 1097; 3 Nimmer, supra § 17.05 at 17-39, and do not preclude the application of the forum non conveniens doctrine merely because a foreign author alleges copyright violations occurring within our borders. National treatment merely requires this Court to grant Creative the same copyright protection enjoyed by American authors. The dissent seems to imply that national treatment confers a special immunity from forum non conveniens analysis on foreign copyright plaintiffs. But United States nationals alleging violations of United States copyright law are subject to forum non conveniens analysis. We believe that the concepts of national treatment and territoriality require that foreign copyright holders be subject to the same standards, no more, no less.

B. Adequate Alternative Forum

The first step in forum non conveniens analysis is the determination of whether an adequate alterative forum exists. Piper, 454 U.S. at 254, 102 S.Ct. at 265. The key determination is whether “the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all.” Id. This requirement is generally satisfied if the defendant is amenable to service of process in the alternative forum. Id. at n. 22. In this case, all parties are either subject to or have submitted to the jurisdiction of the High Court of Singapore. More may be required, however, in “rare circumstances” where the remedy offered by the alternative forum is “clearly unsatisfactory.” The Supreme Court has described such an inadequate forum as one which “does not permit litigation of the subject matter of the dispute.” Id.

Creative argues that because the reach of the Singapore Copyright Act is limited to infringing acts occurring within Singapore,⁴ the High Court of Singapore is unable to grant Creative any relief for the alleged acts of copyright infringement arising from Creative’s distribution of “Sound Blaster clones” within the United States. Creative further argues that 28 U.S.C. § 1338(a)’s grant of “exclusive” jurisdiction to the United States district courts over claims brought under the United States Copyright Act prevents the High Court of Singapore from applying United States copyright law to supplement the remedies afforded under the Singapore Copyright Act.

We reject Creative’s argument on both fronts. We conclude that the Singapore Copyright Act offers Creative an adequate alternative remedy independent of United States copyright law. Even if it did not, we further conclude that the High Court of Singapore would be free to apply United States copyright law to Creative’s counterclaim should the need arise.

1. Adequacy of Remedies under the Singapore Copyright Act

The forum non conveniens doctrine does not guarantee the plaintiff its choice of law, or even that United States law will be applied in the alternative forum. See Lockman, 930 F.2d at 768-69; Zipfel, 832 F.2d at 1484-85. “A court may dismiss on forum non conveniens grounds even though the foreign forum does not provide the same range of remedies as are available in the home forum. However, the alternative forum must provide some potential avenue for redress.” Ceramic Corp., 1 F.3d at 949 (citation omitted).

Creative’s claim that the territorial limits of the Singapore Copyright Act renders the High Court of Singapore incapable of protecting Creative’s United States copyrights interests is belied by the scope of Creative’s own Singapore counterclaim. That counterclaim seeks both monetary and permanent injunctive relief for all alleged acts of infringement arising from both the development of the “Sound Blaster clones” in Singapore and their distribution abroad. We conclude that the High Court of Singapore is capable of granting Creative the relief it seeks despite the territorial limitations of the Singapore Copyright Act.

First, lack of extraterritorial reach should not prevent the High Court of Singapore from subsuming the amount of damages incurred by Aztech Labs’ alleged illegal distribution of pirated sound cards within the United States in the amount of damages awarded under the Singapore Copyright Act for Azteeh’s alleged infringing acts occurring in Singapore. The Second Circuit did exactly that in Update Art, Inc. v. Modiin Pub., Ltd., 843 F.2d 67 (2nd Cir.1988), despite the similar territorial limitations imposed by the United States Copyright Act. In that case, the defendants illegally reproduced a copyrighted poster in the United States and then published it abroad in Israeli newspapers. Id. at 72-73. The magistrate awarded the plaintiff damages for the extraterritorial acts of copyright infringement occurring in Israel, id. at 70, and the defendants appealed. The Second Circuit affirmed the magistrate’s award, concluding that the copyright holder may recover damages from extraterritorial acts of copyright infringement stemming from a “predicate act” of infringement occurring within the United States. Id. at 73. “If the illegal reproduction of the poster occurred in the United States and then was exported to Israel, the magistrate properly could include damages accruing from the Israeli newspapers.” Id.; see generally 3 Nimmer, supra § 14.05 at 14-80. We see no barrier preventing the High Court of Singapore from following a similar course of remedy if it so desires.

Second, the territorial limits of the Singapore Copyright Act cannot prevent the High Court of Singapore from granting Creative’s request to permanently enjoin Aztech’s infringing conduct in Singapore. Indeed, we are unable to conceive of a more effective means of protecting Creative’s United States copyright interests than by shutting off the pipeline of infringing goods at the source. Thus, regardless of whether the High Court of Singapore has jurisdiction to adjudicate acts of copyright infringement occurring outside Singapore, we believe that Court is capable of offering Creative an adequate monetary or injunctive remedy under the Singapore Copyright Act. While the scope of relief available in the High Court of Singapore may not be what Creative envisioned when it filed its claim in the United States district court, the forum non conveniens doctrine does not require it to be so. As we observed in Zipfel, 832 F.2d at 1484, “[s]ueh [an] alternative for[um] may not provide all of the remedies and benefits which might be available in an American court, but the remedies provided are not ‘so clearly inadequate or unsatisfactory that [there] is no remedy at all.’ ” Id. (quoting Piper, 454 U.S. at 254, 102 S.Ct. at 265).

2. Availability of United States Copyright law

In addition, we are aware of nothing preventing the High Court of Singapore from applying United States Copyright law to Creative’s counterclaim in the event that it determines the scope of remedies offered under the Singapore Copyright Act to be inadequate. The mere inability to adjudicate acts of infringement occurring in the United States under the Singapore Copyright Act should not impede that court from applying United States copyright law to those claims should the need arise. This Court has recognized the potential of American courts to entertain actions under the copyright laws of other nations. See Subafilms, 24 F.3d at 1095 n. 10; see generally 2 Paul Goldstein, Copyright: Principles, Law and Practice § 16.3 at 683 (1989). If our courts can entertain actions under the copyright laws of foreign nations, we see no reason why the High Court of Singapore is incapable of doing the same if need be.

Finally, there is simply no support for Creative’s argument that 28 U.S.C. § 1338(a) bars the High Court of Singapore from applying United States copyright law. That statute clearly grants United States district courts jurisdiction over copyright claims “exclusive of the courts of the states,” not exclusive of the courts of foreign nations. Creative urges this Court to interpret this provision as a grant of jurisdiction exclusive of foreign courts as well as courts of the fifty states. There is no support for this interpretation, however. Even if this Court were to adopt Creative’s strained interpretation of 28 U.S.C. § 1338(a), that statute could not prevent the High Court of Singapore from applying United States copyright law if it wished to do so. As a foreign nation, Singapore is not bound by acts of Congress as the fifty states are under the Supremacy Clause of the United States Constitution. Creative can point to no barrier precluding the High Court of Singapore from applying United States copyright law to Creative’s counterclaim should the need arise. See Contact Lumber, 918 F.2d at 1451 n. 3 (“The Philippine courts could apply U.S. COGSA if the situation so warrants. Evidence indicates that the Philippine COGSA is substantially similar to U.S. COGSA, which suggests the Philippine courts would be competent to apply U.S. law.”).

C. The Balance of Private and Public Interest Factors

“Given the existence of an adequate alternative forum, a district court must consider the balance of private and public interest factors to determine whether to dismiss on grounds of forum non conveniens.” Lockman, 930 F.2d at 769 (citing Gulf Oil, 330 U.S. at 508-09, 67 S.Ct. at 843). While there is normally a strong presumption in favor of honoring the plaintiffs choice of forum, a foreign plaintiffs choice is afforded less deference. Piper 454 U.S. at 255-56, 102 S.Ct. at 265-66. The district court concluded that, on the whole, both the private and public interest factors pointed to Singapore as the appropriate forum. We agree.

1. Private Interest Factors

The private interest factors include: (1) relative ease of access to sources of proof; (2) the availability of compulsory process for attendance of unwilling witnesses, and cost of obtaining attendance of willing witnesses; (3) possibility of viewing subject premises; (4) all other factors that render trial of the case expeditious and inexpensive.

Zipfel, 832 F.2d at 1485 (citing Gulf Oil, 330 U.S. at 508, 67 S.Ct. at 843).

The district court concluded that the balance of the private interest factors favored dismissal. It weighed the first factor in favor of dismissal because all of the records and the majority of witnesses involved in the manufacture of the alleged “Sound Blaster clones” are located in Singapore. The district court also weighed the last factor in favor of dismissal because the parallel action in the High Court of Singapore was further advanced than the United States action. It weighed the second factor against dismissal because the majority of expert witnesses reside in California. The district court viewed the third factor as a neutral because there were no premises to view. We find no abuse of discretion in the district court’s consideration of the private interest factors. Both primary parties, the key infringing conduct, and the bulk of the witnesses are located in Singapore, and the case can best be litigated there.

2. Public Interest Factors

The public interest factors include: (1) administrative difficulties flowing from court congestion; (2) imposition of jury duty on the people of a community that has no relation to the litigation; (3) local interest in having localized controversies decided at home; (4) the interest in having a diversity ease tried in a forum familiar with the law that governs the action: (5) the avoidance of unnecessary problems in conflicts of law.

Id.

The district court determined that the public interest factors also favored dismissal. It weighed the second factor in favor of dismissal because both principal parties are residents of Singapore and the alleged wrongful acts of copyright design infringement occurred there. The district court viewed the first and fourth factors neutrally, reasoning that both the United States and Singapore judiciaries are overburdened and that, regardless of which court eventually adjudicated this case, an application of foreign law at some point was inevitable.

Creative argues that the district court should have weighed the second and third factors against dismissal due to the United States’ strong interest in protecting United States’ copyright interests, especially where the complaint alleges infringements occurring within the United States. Creative also argues that the fourth factor should have been weighed against dismissal because its claim was based solely on United States copyright law.

Once again, we find no abuse of discretion. This is essentially a dispute between two Singapore corporations as to which of them was the original developer of the disputed sound card technology. This is not a case involving the piracy of American made products or substantively involving American companies. As such, the United States’ interest in resolving this controversy and the relation of the jury community to this controversy are extremely attenuated and do not sway the balance against dismissal. The presence of Aztech Labs, a wholly-owned subsidiary of a Singapore corporation, influences our analysis very little.

The dissent charges that our decision unfairly discounts what it views as the United States’ strong public interest in resolving this copyright claim. It argues that “an American copyright is a valued benefit granted by the United States government for the primary purpose of benefitting the general public good; therefore, a copyright infringement claim must not be treated as a mere private cause of action like a tort or breach of contract.” Post at 708. We disagree. “Federal copyright laws do not serve this purpose of protecting consumers. They are designed to protect the property rights of copyright owners.” Anderson v. Nidorf, 26 F.3d 100, 102 (9th Cir.1994) (per curiam) (citing Wheaton v. Peters, 33 U.S. 591, 603, 8 L.Ed. 1055 (1834)). As such, the key interests in this dispute lie with the Singapore corporations, not the American public.

We also agree with the district court’s determination retaining this action would not have avoided the problem of having to apply foreign law. The scope of Creative’s complaint necessarily implicates the legality of infringing acts occurring in Singapore. As such, an application of foreign law is likely inevitable, regardless of which forum adjudicates this controversy. See 3 Nimmer, supra § 17.02 at 17-21. Consequently, we conclude that the district court did not abuse its discretion in determining that the public interest factors favor dismissal.

III. CONCLUSION

In sum, we hold that 28 U.S.C. § 1338(a) does not render the forum non conveniens doctrine inapplicable to the United States Copyright Act. We also conclude that the district court did not abuse its discretion either in determining that the High Court of Singapore is an adequate alternative forum in which to adjudicate Creative’s United States copyright infringement claim, or that the balance of private and public factors favors dismissal. Consequently, we AFFIRM the order of the district court.

1 . A peripheral hardware device designed to enhance a computer's ability to produce sounds.

1 . "Jurisdiction in [actions under the Jones Act] shall be under the court of the district in which the defendant employer resides or in which his principal office is located." 46 U.S.C.App. § 688(a) (1988).

2 . "Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action.” 45 U.S.C. § 56 (1988).

3 .“The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trade-marks. Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases.” 28 U.S.C. § 1338(a) (1988).

4 . Section 31(1) of the Singapore Copyright Act provides:

Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the license of the owner of the copyright, does in Singapore, or authorises the doing in Singapore of, any act comprised in the copyright.