The World in U.S. Courts: Spring 2017 - Personal Jurisdiction/Forum Non Conveniens
February.24.2017
Korean Defendant Chan-Woong Park was an employee of plaintiff Power Integrations, Inc. who signed confidentiality and invention agreements. After he left Power Integrations’ employ, Park allegedly used Power Integrations’ proprietary information to obtain patents in the US and South Korea. He then sent letters to Power Integrations and its customers claiming that Power Integrations’ products infringed his Korean patents. Power Integrations thereupon sued Park for interference with contract and prospective economic benefit, among other claims. Park moved to dismiss the complaint on grounds including a lack of personal jurisdiction and the doctrine of forum non conveniens.
The Court concluded that general personal jurisdiction was not a viable theory because Park neither lived nor worked in California prior to the filing of the case, and Park’s contacts with California were not “continuous and systematic.” The Court found that correspondence between the parties regarding Park’s compensation and settlement, and the cease and desist letters Park had allegedly sent to Power Integrations’ customers in California, were insufficient to establish that Park could be considered “at home” in the State.
By contrast, it held that specific personal jurisdiction existed over Park. The Court applied a three-prong test for determining whether a non-resident defendant is subject to specific personal jurisdiction in a forum, finding that Park “purposefully directed” his activities at the forum state, that Power Integrations’ claims arose out of or related to Park’s forum-related activities, and that the exercise of jurisdiction comported with “fair play and substantial justice.” In arriving at the conclusion in favor of purposeful direction, the Court found that Park met the requirements of the “effects” test—an analysis that focuses on the forum where the defendant’s actions were felt. First, the Court found that Park committed an intentional act by purposefully sending cease and desist letters to Power Integrations’ customers and also contacting Power Integrations in California several times to discuss those letters. Second, the Court concluded that Park’s acts were expressly aimed at California because of his numerous contacts with Power Integrations and his knowledge that Power Integrations’ customers exported their products containing Power Integrations’ technology to California. Third, the Court noted that Park did not dispute that Power Integrations suffered harm in California due to his conduct.
The Court next concluded that Power Integrations’ claims arose out of and were related to Park’s activities in California because his actions in the forum were the “but-for” cause of Plaintiff’s claims. The third prong of the test was met because Park’s principal argument was a conclusory assertion of financial hardship that was not sufficient to overcome the strong presumption that conduct satisfying the first two parts of the test would leave the assertion of jurisdiction reasonable.
In weighing all the private and public interest factors, the Court held that the forum non conveniens analysis also weighed against dismissal of the case. The Court noted that many of the private interest factors, like the residence of the parties and the forum’s convenience to the litigants, were neutral in effect. Moreover, because Power Integrations expected to present evidence of the parties’ employment relationship through witnesses in California, the factor of access to evidence weighed slightly against dismissal. As to the public factors, the Court found that California has a local interest in the suit because the case involves intellectual property located in the forum. The suit also concerns California tort law with which a US Court would be more familiar than a South Korean court. Finally, the factor of burden on local courts and juries weighed against dismissal because Power Integrations’ witnesses can testify in English and the more relevant documents were in English rather than in Korean. The Court also noted that Park’s arguments were inadequate to overcome the presumption a US plaintiff enjoys that its choice of forum should be honored.
Notably, the Court proceeded to dismiss the complaint for lack of subject matter jurisdiction because claimed violations of foreign patents could not be addressed through US litigation.