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Foreign Companies Sued in US Courts Can Seek to Have Cases Refiled Abroad

If sued in US
Chinese defendants can seek
to move to China

Under the legal doctrine of forum non conveniens (“forum not agreeing”), a court can refuse to take jurisdiction over a matter where there’s another more appropriate forum available for the parties to resolve their dispute.

The better forum may be in another state or in another country, or it may be a different court in the same jurisdiction.

A US court is more likely to grant a motion to have a case removed to another court if it appears that doing so would not deprive the plaintiff of justice.

The defendant has the burden of proving that the alternate forum is “adequate” and that it provides “some remedy” for the alleged injury to the plaintiff.

It’s often felt that foreign courts will be biased against US companies, making US judges reluctant to grant a petition for removal.

However, in several recent intellectual property cases involving Chinese companies, the foreign plaintiffs did receive significant compensation from Chinese courts.

The recent cases all involved trademark disputes.

  • Under Armour, the American company, won a trademark infringement suit against a Chinese company called Uncle Martian and was awarded $300,000 in damages.
  • New Balance, also an American company, won $1.5 million in damages against a Chinese company called New Boom that had copied the New Balance logo.
  • EtonHouse International Education Group, a Singapore company, was awarded $125,000 in a case against the Chinese Etonkids International Group.

US courts have generally rejected arguments that Chinese courts are not “adequate” or that they are subject to bribery or undue delays, as some plaintiffs have alleged.

But in order to have a case removed, a defendant must do more than simply show that Chinese courts, in general, are adequate. The defendant must show that Chinese law allows litigation of the specific type of dispute and provides a remedy for the plaintiff.

These recent Chinese court victories for foreign companies may make it easier for Chinese companies sued in the US to have their cases moved to Chinese courts.

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