Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-02000/USCOURTS-cand-4_04-cv-02000-44/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MONOLITHIC POWER SYSTEMS, INC., a

Delaware corporation,

Plaintiff,

v.

O2 MICRO INTERNATIONAL LIMITED, a

Cayman Island corporation,

Defendant.

 /

AND RELATED COUNTERCLAIMS, CROSSCLAIMS AND THIRD-PARTY CLAIMS.

 /

No. C 04-2000 CW

(consolidated with

No. C 06-2929 CW)

ORDER DENYING

DELTA'S MOTION TO

DISMISS COMPAL

ELECTRONICS, INC.'S

THIRD-PARTY

COMPLAINT

Third-party Defendant Delta Electronics, Inc. (DEI) moves to

dismiss third-party Plaintiff Compal Electronics, Inc.'s thirdparty complaint against it on grounds of forum non conveniens. 

Compal opposes this motion. Having considered the parties' papers,

the Court denies DEI's motion to dismiss Compal's third-party

complaint.

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 1 of 10
United States District Court

For the Northern District of California

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1

Compal contends that DPC is DEI's U.S. subsidiary. DEI and

DPC dispute this contention. DPC has filed a motion for summary

judgment on the grounds that it has no connection to the

transactions at issue and is not, as Compal claims, DEI's alter

ego. 

2

BACKGROUND

O2 Micro International Limited sued Monolothic Power Systems,

Inc. (MPS), Compal and other parties for patent infringement. MPS

is a Delaware corporation having its principal place of business in

California. Compal is a Taiwanese corporation that manufacturers

and sells computer notebooks. O2 Micro alleges that Compal

infringes the patents-in-suit by the manufacture, sale and offer

for sale of notebook computers incorporating MPS' inverter

controller chips. Compal buys from DEI, another Taiwanese

corporation, inverter modules used to light cold cathode

fluorescent lamps in notebook computers. DEI manufactures its

inverter modules using MPS' inverter control chips. 

O2 Micro did not sue DEI, but Compal did. Compal filed a

third-party complaint against DEI, and Delta Products Corporation

(DPC)1, a California corporation, alleging breach of warranties of

title and non-infringement, merchantability and fitness for a

particular purpose and breach of their obligation to defend,

indemnify and hold Compal harmless against claims of patent

infringement. Compal also filed cross-claims against MPS for

indemnity and breach of warranty. DEI then filed cross-claims

against MPS for indemnity. 

DEI now moves to dismiss the third-party complaint filed

against it, arguing that this Court is not a convenient forum for a

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 2 of 10
United States District Court

For the Northern District of California

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dispute between two Taiwanese corporations.

DISCUSSION

Under the doctrine of forum non conveniens, the district court

has discretion to decline to exercise jurisdiction in a case where

litigation in an alternative forum would be more convenient for the

parties. The Supreme Court instructs that "dismissal will

ordinarily be appropriate where trial in the plaintiff's chosen

forum imposes a heavy burden on the defendant or the court, and

where the plaintiff is unable to offer any specific reasons of

convenience supporting his choice." Piper Aircraft Co. v. Reyno,

454 U.S. 235, 249 (1981).

In deciding whether to dismiss an action due to forum non

conveniens, the district court must "consider the availability of

an adequate alternative forum, and then . . . whether several

‘private' and ‘public' interest factors favor dismissal." Leetsch

v. Freedman, 260 F.3d 1100, 1103 (9th Cir. 2001). Ordinarily, in

the case of a citizen plaintiff, there is a strong presumption in

favor of the plaintiff's choice of forum, which can be overcome

only when the private and public interest factors clearly point

towards trial in the alternative forum. Piper Aircraft, 454 U.S.

at 265-66. In the case of a foreign plaintiff, like Compal, the

choice of forum "deserves less deference." Id. But even under the

lesser deference standard, dismissals for forum non conveniens are

"to be employed sparingly." See Ravelo Monegro v. Rosa, 211 F.3d

509, 514 (9th Cir. 2000). 

I. Adequate Alternative Forum

DEI contends that Taiwan is an adequate alternative forum.

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 3 of 10
United States District Court

For the Northern District of California

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Compal argues that it is not. Its arguments, however, are not

persuasive. 

Ordinarily, an alternative forum exists when defendants are

amenable to service of process in the foreign forum; a foreign

forum is adequate when it provides the plaintiff with a sufficient

remedy for its wrong. Dole Food Co. v. Watts, 303 F.3d 1104, 1118

(9th Cir. 2002); see also Lockman Foundation v. Evangelical

Alliance Mission, 930 F.2d 764, 767 (9th Cir. 1991) (noting that

only in "rare circumstances," when the remedy provided by the

alternative forum is so clearly inadequate "that it is no remedy at

all," is the foreign forum not adequate). DEI notes that, as

Taiwanese corporations, Compal and DEI are amenable to service of

process in Taiwan. DEI also points out that Compal's "terms and

conditions," that apply to its purchases, provide for jurisdiction

in the Taiwan District Court in Taipei. DEI further notes that

Taiwan law provides Compal with a remedy of compensatory damages

for breach of warranty and also provides a remedy for breach of an

indemnity contract. 

 Compal responds that DEI fails to show that Taiwan is an

alternative forum because it does not show that the entire case and

all parties can come within the jurisdiction of Taiwan. It cites

Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 221 (5th Cir.

2000), which states, "A foreign forum is available only when the

entire case and all parties can come within the jurisdiction of

that forum." See also Dole Food, 303 F.3d at 1118 (quoting Alpine

View Co., 205 F.3d at 221). Compal defines "entire case" to

include the underlying patent case, not just its indemnity and

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 4 of 10
United States District Court

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warranty claims against DEI and DPC, and defines "all parties" to

include O2 Micro, MPS and others. Compal, however, provides no

authority to support its broad definition. DEI notes that it seeks

only dismissal of Compal's third-party complaint, or case, against

it; it does not seek dismissal of the entire action, including the

underlying patent action. It further notes that, if DPC's motion

for summary judgment is not granted, DPC agrees to consent to the

jurisdiction of Taiwan. Thus, Compal's entire third-party case and

the parties in that case can come within the jurisdiction of

Taiwan.

The Court finds that Taiwan is an alternative adequate forum.

II. Private and Public Interest Factors

Given the existence of an adequate alternative forum, the

Court must next consider the balance of private and public

interests to determine whether to dismiss on grounds of forum non

conveniens. Lockman Foundation, 930 F.2d at 769. DEI contends

that the private and public interest factors weigh strongly in

favor of dismissal. Compal disagrees, arguing that the private and

public interest factors weigh in favor of the case remaining in the

Northern District of California.

A. Private interest factors

Private interest factors include "the relative ease of access

to sources of proof, the availability of compulsory process for

unwilling witnesses, the comparative cost of obtaining willing

witnesses, the possibility of a view of any affected premises, the

ability to enforce any judgment eventually obtained, and ‘all other

practical problems that make trial of a case easy, expeditious and

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United States District Court

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inexpensive.'" Ravelo Monegro, 211 F.3d at 512 (citing Gulf Oil

Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). 

DEI notes that all of the witness with knowledge concerning

Compal's third-party complaint reside in Taiwan or the People's

Republic of China and that no transaction between Compal and DEI

occurred within the United States. It cites cases holding that, in

similar situations, the private interest factor weighed strongly in

favor of dismissal. See, e.g., Feenerty v. Swiftdrill, 706 F. Supp

519, 521 (E.D. Tex. 1989); Van Schijndel v. Boeing Co., 434

F. Supp. 2d 766 (C.D. Cal. 2006). But those cases are

distinguishable; they do not involve third-party claims and

counter-claims tying the parties together.

DEI also cites Benq America Corp. v. Forward Electronics Co.,

2005 WL 3445629 (N.D. Cal. 2005). In Benq America, the plaintiff

was sued for patent infringement. The plaintiff responded by

bringing a separate action against the defendant, a Taiwanese

corporation, alleging breach of warranty and seeking indemnity. 

The Court dismissed the case for lack of personal jurisdiction, not

on forum non conveniens grounds. Benq America is distinguishable

in other ways. In Benq America, the plaintiff argued that this

district would be the most efficient venue for its indemnity action

because the underlying patent infringement action was also pending

in this district. The court, however, noted that the parties in

the patent infringement suit stipulated to dismiss the suit before

any substantive rulings were issued and thus there were "no 'issues

of infringement' that could have any bearing" on the indemnity and

breach of warranty action. Id. at *9. Here, the underlying patent

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 6 of 10
United States District Court

For the Northern District of California

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infringement case is still going forward and Compal's third-party

claims against DEI are tied up in that action.

Obviously, it will be a burden for DEI, a Taiwanese

corporation with seemingly no connection to California, to defend

itself in a case in Northern California. See id. at *8 ("A foreign

defendant with no connections with California and no offices or

agents in the United States would be burdened by having to produce

witnesses and evidence for litigation in California."). Compal

points out, however, that most, if not all, of the witnesses

identified by DEI are employees or agents who are under the

parties' control and will appear voluntarily. See Arsape S.A. v.

JDS Uniphase Corp., 2004 WL 2663180 (N.D. Cal. 2004) (dismissing

case on forum non conveniens grounds where neither the court nor

the defendant would have the ability to compel witnesses to

testify). Although DEI provides information about the expense of 

bringing witnesses from Taiwan to Northern California, DEI does not

identify a particular witness that would not testify. Compal

further notes that, pursuant to discovery orders, DEI should have

already produced relevant documents. See Sinatra v. Nat'l

Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988) (noting that

"modern advances in communications and transportation have

significantly reduced the burden of litigating in another

country"). Also weighing in favor of retaining this case in this

district is that, because this is an action for breach of

warranties and indemnification obligations, it is not necessary to

view the premises where any transactions between the parties

occurred. 

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 7 of 10
United States District Court

For the Northern District of California

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As noted above, dismissal on forum non conveniens grounds

should be granted when there is a heavy burden on the defendant

"and where the plaintiff is unable to offer any specific reasons of

convenience supporting [its] choice." Piper Aircraft, 454 U.S. at

249. Here, Compal offers specific reasons why retaining its thirdparty action against DEI in this district makes trial of the case

convenient. For example, even if Compal's third-party action

against DEI is dismissed, the Court will still need to decide

similar indemnity issues as part of Compal's cross-claims against

MPS. Because DEI used the accused MPS inverter controller chips in

its inverter modules and sold those inverter modules to Compal,

Compal's claims against DEI are tied to its claims against MPS. 

Compal notes that, under the Federal Rules of Civil Procedure, the

rights of all parties in a controversy should generally be

adjudicated in a single action. See Ashe v. Swenson, 397 U.S. 436,

455 (1970) (a "pervasive purpose" of the Rules is "to require or

encourage the consolidation of related claims in a single

lawsuit"). DEI responds that its indemnity agreement with Compal

is distinct and does not overlap with MPS' indemnity agreement with

MPS. Even if true, Compal offers other specific grounds explaining

why this case should remain in this district. 

Thus, the Court finds that the private interest factors weigh

only slightly in favor of dismissal on the grounds of forum non

conveniens.

B. Public interest factors 

Public interest factors include court congestion, the

unfairness of burdening citizens in an unrelated forum with jury

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duty, the interest in having localized controversies decided at

home, the interest in trying the case in a forum familiar with the

applicable law, and the interest in avoiding unnecessary conflicts

of laws, or applying foreign law. Gulf Oil, 330 U.S. at 509-09;

Ravelo Monegro, 211 F.3d at 512. 

DEI contends that even if the private interest factors do not

strongly weigh in favor of dismissal, consideration of the public

interest factors requires dismissal of Compal's third-party claims

against it. It argues that the third-party complaint does not

concern a localized controversy, again noting that all the

transactions between itself and Compal occurred in Taiwan or the

People's Republic of China, a fact Compal does not dispute. Nor

does Compal dispute that Taiwanese law may apply. 

Compal, however, insists that its third-party action involves

controversies localized in this district. It notes that the

alleged infringing devices are developed and manufactured by MPS,

whose principal place of business is within this district, and that

DPC's principal place of business is also within this district. 

Compal states that DEI cannot reasonably argue that Compal's thirdparty action does not touch and concern the Northern District of

California. Even so, it is not a localized controversy. And,

although prospective jurors would come from a community with an

interest in this litigation, that interest would be slight. 

Therefore, the Court concludes that the public interest factors

weigh slightly in favor of dismissal on the grounds of forum non

conveniens.

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 9 of 10
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2 To the extent that the Court relied upon evidence to which

there is an objection, DEI's objections are overruled. To the

extent that the Court did not rely on such evidence, DEI's

objections are overruled as moot. 

10

Nonetheless, as noted above, Compal provides specific reasons

explaining why this case between two Taiwanese corporations

involving transactions that occurred in Taiwan should remain in

this Court. The third-party complaint does not involve a situation

where "the forum chosen by the plaintiff is so completely

inappropriate and inconvenient that it is better to stop the

litigation in the place where brought and let it start all over

again somewhere else." Norwood v. Kirkpatrick, 349 U.S. 29, 31

(1955). Plaintiff fails to show that the private and public

interest factors weigh strongly in favor of dismissal. The Court

will not dismiss this case on the grounds of forum non conveniens. 

CONCLUSION

 For the foregoing reasons, DEI's Motion to Dismiss Compal's

Third-Party Complaint is DENIED.2

IT IS SO ORDERED.

Dated: 10/3/06 

CLAUDIA WILKEN

United States District Judge

Case 4:04-cv-02000-CW Document 528 Filed 10/03/06 Page 10 of 10