United States District Court, D. Delaware
BRITISH TELECOMMUNICATIONS PLC and BT AMERICAS, INC., Plaintiffs,
FORTINET INC, Defendant.
A. Rovner, Jonathan A. Choa (Potter, Anderson & Corroon
LLP), Wilmington, Delaware; James H. Shalek, Baldassare
Vinti, Nolan M. Goldberg, Fabio E. Tarud (Proskauer Rose
LLP), New York, New York. Counsel for Plaintiffs
B. Blumenfeld, Brian P. Egan (Morris, Nichols, Arsht &
Tunnell LLP), Wilmington, Delaware; John (Jay) Neukom, James
Y. Pak (Skadden, Arps, Slate, Meagher & Flom LLP), Palo
Alto, California. Counsel for Defendant. Counsel for
F. CONNOLLY, UNITED STATES DISTRICT JUDGE.
British Telecommunications pic (British Telecom) and BT
Americas, Inc. are part of a global conglomerate that offers
telecommunications products and services. D.I. 1 ¶¶
14-18. Defendant Fortinet, Inc. designs, fabricates, and
sells network security products and services. Plaintiffs have
asserted patent infringement claims against Fortinet based on
five patents issued by the United States Patent and Trademark
Office. Fortinet moved to dismiss all of Plaintiffs claims
pursuant to Federal Rule of Civil Procedure 12(b)(1) and the
doctrine of forum non conveniens. D.I. 9 at 1.
Fortinet argued that Plaintiffs and Fortinet "are
parties to a written contract that contains a mandatory,
exclusive forum-selection clause that forbids either side
from asserting claims anywhere but the courts of
Magistrate Judge issued a Report and Recommendation,
recommending that I deny Fortinet's motion. D.I. 32.
Fortinet has filed objections to the Report and
Recommendation. D.I. 26. Plaintiffs have filed a response to
the objections. D.I. 38. Because Fortinet's motion is a
dispositive motion, I exercise de novo review of the
Magistrate Judge's findings and recommendation.
See Fed. R. Civ. P. 72(b)(3). Although I do not
agree with all the Magistrate Judge's stated reasons for
her recommendation, I agree with and will adopt her
recommendation that I deny Fortinet's motion.
Complaint alleges infringement of five patents: U.S. Patent
Nos. 7, 370, 358; 7, 693, 971; 7, 774, 845; 7, 159, 237 (the
#237 patent); and 7, 895, 641 (the #641 patent). D.I. 1
¶ 1. The patents relate generally to computer or network
security. Each of the Complaint's five counts allege
infringement of a different patent. BT Americas, which owns
the #237 and #641 patents, is the plaintiff in Counts I and
II. British Telecom, which owns the three remaining patents,
is the plaintiff in Counts III, IV, and V. The Complaint
alleges infringement dating back to at least 2014 and
continuing infringement by Fortinet.
April 2016, British Telecom and Fortinet executed a
"Frame Agreement" that set forth, among other
things, the terms by which British Telecom could purchase and
resell Fortinet's computer hardware and software
products. D.I. 11-1 §§ 1.7, 1.8, 1.8.1, 1.13, 2.2,
2.3. Under § 2.5 of the Agreement, British Telecom
"agree[d] and acknowledge[d] that Fortinet... shall
retain all intellectual property rights ... [and] patent
rights" in Fortinet's products and that British
Telecom "shall have no intellectual property right"
in Fortinet's products. In § 17.13 of the Agreement,
British Telecom and Fortinet agreed that "[n]othing
contained in this [Frame Agreement] shall be construed as
conferring by implication or otherwise upon either party any
license or other right except the licenses, rights and uses
expressly granted hereunder to the party hereto[.]"
Frame Agreement's governing law and forum-selection
clauses are the asserted bases for Fortinet's pending
motion. Pursuant to § 17.4 of the Agreement, British
Telecom and Fortinet agreed that "any claims or disputes
arising out of contractual and/or non-contractual obligations
relating to or in connection with the [Frame Agreement]...
shall be governed by and construed in accordance with the
laws of England." D.I. 11, Ex. 1 at 11. Section 17.4
also requires the parties to "submit to the exclusive
jurisdiction of the English courts in relation to contractual
and/or non-contractual obligations." Id.
the federal doctrine of forum non conveniens,
'when an alternative forum has jurisdiction to hear [a]
case, and when trial in the chosen forum would 'establish
... oppressiveness and vexation to a defendant... out of all
proportion to plaintiffs convenience,' or when the
'chosen forum [is] inappropriate because of
considerations affecting the court's own administrative
and legal problems,' the court may, in the exercise of
its sound discretion, dismiss the case," even if
jurisdiction and proper venue are established." Am.
Dredging Co. v. Miller, 510 U.S. 443, 447-48 (1994)
(quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235,
241 (1981), in turn quoting Koster v. (Am.) Lumbermens
Mut. Cas. Co., 330 U.S. 518, 524 (1947)). The doctrine
traces its roots to the practice of courts at common law to
"occasionally decline, in the interest of justice, to
exercise jurisdiction, where the suit... c[ould] be more
appropriately conducted in a foreign tribunal."
Canada Malting Co. v. Patterson Steamships, Ltd.,
285 U.S. 413, 422 (1932). In federal courts today, the
doctrine applies only in cases where the alternative forum is
in a foreign country or "perhaps in rare instances where
a state or territorial court serves litigational convenience
best." Sinochem Int'l, Co. v. Malaysia Int'l
Shipping Corp., 549 U.S. 422, 430 (2007) (citations
doctrine presupposes the existence of an alternative forum
that has jurisdiction over the parties and the claims.
See Am. Dredging, 510 U.S. at 447 ("Under the
federal doctrine of forum non conveniens, when an
alternative forum has jurisdiction to hear [a] case, ...
the court may, in the exercise of its sound discretion,
dismiss the case.") (brackets in the original) (internal
quotation marks and citations omitted) (emphasis added));
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947)
("In all cases in which the doctrine of forum non
conveniens comes into play, it presupposes at least two
forums in which the defendant is amenable to process; the
doctrine furnishes criteria for choice between them.").
Thus, "[a]t the outset of any forum non
conveniens inquiry, the court must determine whether
there exists an alternative forum." Piper, 454
U.S. at 254 n.22.
cases, "this requirement will be satisfied when the
defendant is 'amenable to process' in the other
jurisdiction." Id. at 254 (citing Gulf
Oil, 330 U.S. at 506-07). But
in rare circumstances ... where the remedy offered by the
other forum is clearly unsatisfactory, the other forum may
not be an adequate alternative, and the initial requirement
may not be satisfied. Thus, for example, dismissal would not
be appropriate where the alternative ...