In global industries such as electronics and consumer products, parallel intellectual property litigation in multiple forums has become a key tool in the sophisticated litigants' toolbox.
Perhaps the most famous example of this strategy is provided by the IP dispute between Apple and Samsung, which began in 2011 and, over the following five years, spread over numerous jurisdictions including the United States, South Korea, Japan, Australia, Germany, the United Kingdom, France, Italy and the Netherlands.[1]
In particular, parallel litigation in the U.S. and China has recently become important not only to Chinese and American companies, but also to other Asian and European players.[2]
A September decision from a leading U.S. patent jurisdiction confirms that trend and illustrates the challenges one may encounter in trying to counter such a strategy. In Chongqing Qiulong Technology Corp. Ltd. v. Tanli Power Technology (Chongqing) Co. Ltd.,[3] the U.S. District Court for the Western District of Texas rejected a defendant's attempt to dismiss a patent suit in the U.S. and limit the litigation to China.
The plaintiff in that litigation is Chongqing Qiulong Technology, the Chinese manufacturer of Surron electric motorcycles.[4] On April 19, 2023, Surron sued Tanli Power and Talaria Power, which also manufacture electric motorcycles. Surron alleged that Tanli and Talaria infringed U.S. Design Patent No. D854,456, which relates to the design for the "Light Bee" electric off-road motorcycle.[5]
After filing a patent infringement action in the U.S., Surron sued Tanli (but not Talaria) in China for infringement of the Chinese patent that provided priority for Surron's U.S. design patent.[6]
On April 29, 2024, Tanli and Talaria filed a motion to dismiss the U.S. case in view of the parallel Chinese litigation.
First, the defendants argued that under the doctrine of forum non conveniens, the district court should decline jurisdiction since China was an available and adequate alternative forum to litigate the parties' patent dispute.[7] Second, the defendants argued that under the doctrine of international abstention, the district court should dismiss the action in view of the pending litigation in the Chinese courts.[8]
The district court, however, rejected both arguments.
With respect to defendants' forum non conveniens argument, the court explained that a prerequisite for applying the doctrine is that China must be an "available and adequate alternative forum" for adjudicating the dispute, meaning that a Chinese court can exercise jurisdiction over the entire case in such a manner that the parties will not be deprived of remedies or treated unfairly.[9]
Under that standard, the court found that China was not an "available" and "adequate" forum to adjudicate the dispute, because defendants had not shown that a Chinese court could exercise jurisdiction over, and adjudicate, a U.S. patent case, or could enforce a U.S. patent.[10] The district court further found that several private and public interest factors counseled against dismissal.
With respect to private interest factors, such as access to evidence, the court stated that because the alleged infringement occurred in the U.S., litigating the case in China would likely not be more convenient than litigating in the U.S.[11] And with respect to the public interest factors, the district court believed it was "self-evident" that the U.S. has a greater interest than China in enforcing U.S. patents.[12]
The district court rejected defendants' international abstention argument on similar grounds. The court explained that factors relevant to that determination included similarity of issues, judicial efficiency, adequacy of relief in the Chinese courts, and considerations of fairness and prejudice to the parties.[13]
With respect to similarity of issues, the court noted that the issues in the U.S. and Chinese cases may differ to the extent Surron's Chinese and American patents may claim different subject matter.[14] With respect to judicial efficiency, the court doubted that litigating the case in China would be more efficient where the alleged infringement occurred only in the United States.[15] And with respect to adequacy of relief and fairness to the parties, the district court noted again that Chinese courts may be unable or unwilling to hear a case involving a U.S. patent.[16]
As this brief summary shows, the district court's decision turned largely on policy grounds. The court emphasized a Chinese court's inability or unwillingness to adjudicate a case under U.S. patent law, or to enforce a U.S. patent where the alleged infringement occurs in the U.S. The district court followed the reasoning of the U.S. Court of Appeals for the Federal Circuit's 2017 decision in Halo Creative & Design Ltd. v. Comptoir des Indes Inc.,[17] which involved a similar attempt to dismiss a U.S. case to pursue litigation in Canada.[18]
The defendants in the Surron case argued that Halo could be distinguished because in that case the possibility of litigation in the Canadian courts was speculative, whereas Surron had already filed patent litigation in China.[19] Yet, the district court rejected that factual distinction by pointing to the overarching policy consideration that the plaintiff had "the right to pursue its rights in its American patents here in an American court."[20]
Quoting the Federal Circuit in Halo, the district court observed that denying enforcement in U.S. courts in favor of a foreign jurisdiction could defeat the policies of U.S. patent law.[21]
As noted by the Federal Circuit in Halo, the decision in the Surron case is consistent with the approach taken in analogous situations by multiple district courts,[22] including the Western District of Texas.[23] Courts may be reluctant to apply the laws of another country, especially in a specialized field such as patent law, because those laws may embody different principles and policies from U.S. patent law.[24]
By the same token, courts may not want to allow a foreign tribunal to adjudicate domestic patent rights. A party trying to simplify multijurisdictional litigation may seek to have a U.S. patent case stayed, rather than dismissed, pending conclusion of foreign litigation.[25]
However, at least as between the U.S. and other countries, competitors in global markets should be prepared to litigate their separate patent rights in multiple jurisdictions.
Disclaimer: The article is for general information purposes and is not intended to be and should not be taken as legal advice. A version of this article was originally published in IP Law360 on December 13, 2024.
See, e.g., Kurt B. Gerstner, The New Normal: International Litigation and Its Implications for Trial Lawyers, 83 Def. Couns. J. 257, 260 (2016).
See, e.g., Ericsson Inc. v. Samsung Elecs. Co., No. 2:20-CV-00380-JRG, 2021 WL 89980 (E.D. Tex. Jan. 11, 2021) (granting anti-interference injunction to permit parallel litigations in the U.S. and China).
No. 1:23-CV-00442-RP, 2024 WL 4448843 (W.D. Tex. Sept. 19, 2024), report and recommendation adopted, 2024 WL 4447244 (W.D. Tex. Oct. 8, 2024).
2024 WL 4448843, at *1.
Id.
Id.
Id. at *3.
Id. at *6.
Id. at *2 (quoting Vasquez v. Bridgestone/Firestone, Inc., 325 F.3d 665, 671 (5th Cir. 2003) and In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1165 (5th Cir. 1987)).
Id. at *3 — 5.
Id. at *5.
Id. at *6.
Id. at *6 (citing Anderson-Tully Lumber Co. v. Int'l Forest Prods., S.r.L., No. CIVA505CV68, 2007 WL 2872413, at *6 (S.D. Miss. Sept. 26, 2007)).
Id. at *7.
Id.
Id.
816 F.3d 1366 (Fed. Cir. 2016).
Id. at 1367.
2024 WL 4448843, at *5.
Id. at *5.
Id. at *4 (quoting in part Halo, 816 F.3d at 1373 ("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.")).
816 F.3d at 1373 ("[D]istrict courts have routinely denied motions to dismiss on forum non conveniens grounds when United States intellectual property rights form the crux of the dispute.").
Int'l Bus. Machines Corp. v. LzLabs GmbH, No. 6:22-CV-00299-ADA, 2023 WL 11916821, at *2 (W.D. Tex. Jan. 5, 2023) (rejecting motion to dismiss U.S. litigation and move the case to England because of the defendants' failure to show that "the English courts would (or even could) exercise jurisdiction over Plaintiff's claims arising under U.S. laws").
See Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 455 (2007) ("[F]oreign law may embody different policy judgments about the relative rights of inventors, competitors, and the public in patented inventions."). (internal citations and alternations omitted).
See, e.g., Pexcor Mfg. Co. v. Uponor AB, 920 F. Supp. 2d 151, 153 — 54 (D.D.C. 2013) (granting stay of U.S. patent litigation pending resolution of parallel litigation in Canada over "nearly identical" patent).
