Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-02000/USCOURTS-cand-4_04-cv-02000-45/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 MPS'

COUNTERCLAIMS

Delta Electronics, Inc. (DEI) moves to dismiss Monolithic

Power Systems, Inc.'s (MPS') counterclaims on grounds of forum non

conveniens. Alternatively, DEI moves, under Federal Rule of Civil

Procedure 21, to sever MPS' counterclaims. MPS opposes the motion. 

The matter was submitted on the papers. Having considered the

parties' papers, the Court denies DEI's motion.

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United States District Court

For the Northern District of California

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BACKGROUND

O2 Micro International Limited sued MPS, Compal Electronics,

Inc. and other parties for patent infringement. MPS is a Delaware

corporation with 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, a Taiwanese corporation, inverter modules

used to light cold cathode fluorescent lamps in notebook computers. 

DEI manufactures its inverter modules using the accused 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), 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. DEI responded by a cross-claim against MPS for

indemnity for any liability that DEI might have to Compal. In

response, MPS filed counterclaims against DEI for breach of

contract and misappropriation of trade secrets. MPS alleges that

DEI breached a Non-Disclosure Agreement that it entered into with

MPS and that it gave away MPS' trade secrets to O2 Micro. 

DEI now moves to dismiss, or, alternatively, to sever MPS'

counterclaims, arguing that those claims are not related to the

underlying patent dispute and that this Court is not a convenient

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United States District Court

For the Northern District of California

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forum for a dispute arising out of alleged conduct that occurred in

Taiwan. But, as MPS notes, DEI does not seek to dismiss or sever

its own claims against MPS for indemnity.

DISCUSSION

I. Forum non conveniens

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. Dismissal based on forum non conveniens is "an

exceptional tool to be employed sparingly." Ravelo Monegro v.

Rosa, 211 F.3d 509, 514 (9th Cir. 2000). The Supreme Court

instructs that dismissal is ordinarily appropriate only where "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). There is a

strong presumption in favor of a domestic 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; Ravelo Monegro, 211

F.3d 509 at 514.

MPS argues that the doctrine of forum non conveniens is

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inapplicable here because DEI seeks to force MPS to litigate its

claims against DEI in Taiwan, while DEI pursues its own claims

against MPS in this Court. MPS relies on Dole Food Co. v. Watts,

303 F.3d 1104, 1118 (9th Cir. 2000) (quoting 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." But

Dole Food does not hold that counterclaims cannot be dismissed

independently of the remaining causes of action. And several

district courts have dismissed counterclaims based on forum non

conveniens without dismissing the underlying claims. See, e.g.,

ISTIL Group, Inc. v. Masood, 2004 WL 948376, *6 (D. Or. 2004);

Trujillo v. Banco Central Del Ecuador, 35 F. Supp. 2d 908 (S.D.

Fla. 1998). The issue of DEI's claims against MPS is not

dispositive of DEI's. The issue, however, is relevant when

balancing the private and public interest factors discussed below.

A. Adequate Alternative Forum

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, 303 F.3d at 1118; 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 contends that Taiwan is an adequate alternative forum. 

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MPS does not argue otherwise. The Court finds that Taiwan is an

adequate alternative forum. 

B. 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. MPS disagrees, arguing that the private and

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

Northern District of California.

1. 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

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

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

DEI notes that the breach of contract and disclosure of MPS'

trade secrets allegedly occurred in Taiwan. Most of the witnesses

reside in Taiwan, and, according to DEI, most of the documents and

physical evidence concerning MPS' claims are located in Taiwan. 

Therefore, it contends that the private interest factors weigh

strongly in favor of dismissal.

MPS does not dispute that most of the witnesses and evidence

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are located in Taiwan. Rather, it contends that dividing the

parties' claims among multiple venues would only add to the expense

of this litigation and to the inconvenience of the witnesses. It

notes that many of the witnesses who would testify concerning DEI's

indemnity and warranty claims also have knowledge relevant to MPS'

counterclaims; thus, if DEI's motion was granted, these witnesses

would be subject to multiple court proceedings held in Oakland,

California and Taiwan. MPS further notes that the cases DEI cites

in its moving papers involve motions to dismiss filed by defendants

who were sued by foreign plaintiffs in Texas, whereas MPS, based in

California, is not a foreign counter-plaintiff. It also notes that

none of those cases involve a situation like this one: where DEI

seeks to require MPS to file its counterclaims against DEI in a

foreign jurisdiction, while allowing DEI to continue pursuing its

claims in this Court, located where MPS has its principal place of

business. 

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

corporation with seemingly no connection to California, to defend

itself against MPS' counterclaims in Northern California. See Benq

America Corp. v. Forward Electronics Co., 2005 WL 3445629, *8 

(N.D. Cal. 2005) ("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."). But, as noted above, dismissal on forum non

conveniens grounds should be granted when there is a heavy burden

to DEI and where MPS "is unable to offer any specific reasons of

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

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249. Here, MPS offers specific reasons concerning why retaining

its counterclaims against DEI in this district makes trial of the

case convenient. Thus, the Court finds that the private interest

factors weigh only slightly in favor of dismissal on the grounds of

forum non conveniens.

2. Public interest factors 

Public interest factors include court congestion, the

unfairness of burdening citizens in an unrelated forum with jury

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. Ravelo Monegro, 211 F.3d at 512

(citing Gulf Oil, 330 U.S. at 508-09).

DEI argues that even if the private interest factors do not

strongly weigh in favor of dismissal, consideration of the public

interest factors requires dismissal of MPS counterclaims against

it. Its argument, however, is unpersuasive. As MPS notes, the

counterclaim at issue is brought by a company based in this

district. Citizens in this district thus will not be burdened with

having to serve on a jury in a case in which this district has no

interest. Furthermore, "California has a manifest interest in

providing a local forum for its residents to redress injuries

inflicted by out-of-state defendants." Integral Development Corp.

v. Weissenbach, 99 Cal. App. 4th 576, 591-92 (2002). MPS resides

in California; this State's interest does not lessen, as DEI

suggests, merely because MPS is a Delaware corporation. In

addition, as noted above, some of the same evidence will be

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presented in MPS' claim against DEI and in DEI's claim against MPS. 

Requiring two different courts to hear the same evidence would do

nothing to relieve this Court or potential jurors in this district

of the burden of adjudicating the parties' dispute, nor would it be

in the interest of efficiency.

In sum, this is not a situation where the forum chosen by MPS

"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). DEI fails to show that the private and public

interest factors weigh strongly in favor of dismissal or that MPS

should not be allowed to bring its counterclaims against DEI in the

district where MPS has its principal place of business. The Court

will not dismiss MPS' counterclaims on the grounds of forum non

conveniens.

II. Severance

In the alternative, DEI moves, pursuant to Federal Rule of

Civil Procedure 21, to sever MPS' counterclaims against it. Rule

21 provides that a claim may be severed and proceeded with

separately. The Ninth Circuit instructs that severance of a claim

may be ordered to prevent delay or prejudice. Coleman v. Quaker

Oats, Co., 232 F.3d 1271, 1296 (9th Cir. 2000). DEI presents no

evidence, however, of how it will be prejudiced, or the case

delayed, if MPS' counterclaims against it are not severed from the

other claims in this action. As another court in this district

noted, "logic dictates that holding two trials, as opposed to one,

will inevitably cause delay in resolution" of the parties'

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disputes. Spectra-Physics Lasers, Inc. v. Uniphase Corp., 144

F.R.D. 99, 101 (N.D. Cal. 1992). 

The Court explained in its August 9, 2006 order granting the

motion to consolidate, that it may bifurcate the trial in this

action should it appear after discovery and motion practice that a

single trial of all of the issues in this action will be overly

complex. But, because DEI does not provide the Court with

sufficient cause, it will not sever MPS' counterclaims from the

other claims in this action. 

CONCLUSION

 For the foregoing reasons, the Court DENIES DEI'S MOTION TO

DISMISS MPS' COUNTERCLAIMS OR, ALTERNATIVELY, TO SEVER.

IT IS SO ORDERED.

Dated: 10/3/06 

CLAUDIA WILKEN

United States District Judge

Case 4:04-cv-02000-CW Document 529 Filed 10/03/06 Page 9 of 9