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Beijing iQIYI Science & Technology Co., Ltd. v. iTalk Global Communications, Inc.

United States District Court, W.D. Texas, Waco Division

December 17, 2019

BEIJING IQIYI SCIENCE & TECHNOLOGY CO., LTD., BEIJING QIYI CENTURY SCIENCE & TECHNOLOGY CO., LTD., Plaintiffs,
v.
ITALK GLOBAL COMMUNICATIONS, INC., A TEXAS CORPORATION, DOES 1 THROUGH 100, INCLUSIVE, Defendants.

          MEMORANDUM AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR FORUM NON CONVENIENS

          ALAN D ALBRIGHT UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendant iTalk Global Communications, Inc.'s (“iTalk Global”) Motion to Dismiss for Forum Non Conveniens (ECF No. 24), Plaintiffs Beijing iQIYI Science & Technology Co., Ltd. and Beijing QIYI Century Science & Technology Co., Ltd.'s (collectively, “iQIYI”) Response (ECF No. 31), Defendant iTalk Global's Reply (ECF No. 32), and iQIYI's Sur-Reply (ECF No. 34). After having reviewed the parties' briefs, case file, and applicable law, the Court has determined that Defendant iTalk Global's Motion to Dismiss should be DENIED for the following reasons.

         I. BACKGROUND

         This case concerns the alleged infringement of U.S. copyrights owned by several Chinese companies by a Texas corporation, iTalk Global. Because of the fact-intensive nature of forum non conveniens motions, the Court must develop an extensive factual background.

         A. The Parties

         Plaintiffs Beijing iQIYI Science & Technology Co., Ltd. and Beijing QIYI Century Science & Technology Co., Ltd. are Chinese companies with their principal place of business in Beijing, China. iQIYI is “an innovative market-leading online entertainment service platform that provides video streaming services to viewers all over the world. Pl.'s Compl., ECF No. 1 at ¶ 1.

         On the other hand, Defendant iTalk Global, d/b/a iTalkBB, is a Texas corporation with its principal place of business in Austin, Texas and McLean, Virginia. Id. at ¶ 2. Defendant iTalk Global is primarily engaged in the business of providing Voice-over-Internet Protocol (“VoIP”) services for native Chinese and Korean speakers in the U.S. and elsewhere. Def.'s Mot. at 4. Additionally, iTalk Global acts as the sales and billing agent for iTalkTV HK, which is a wholly owned subsidiary of Chinese company Beijing Capital Online Network Technology Co. Id. iTalkTV HK owns and operates the iTalkBB Chinese TV platform, a primarily Chinese language Internet Protocol Television (“IPTV”) service delivered to consumes in the U.S., Canada, and Australia via a set-top box. Id. at 5. As a sales agent for iTalkTV HK, iTalk Global sells subscriptions to the iTalkBB Chinese TV platform, which is accomplished by bundling the TV platform with subscriptions to iTalk Global's VoIP service. Id. The TV shows that encompass the subscriptions to the iTalkBB Chinese TV platform are the basis for Plaintiff iQIYI's alleged copyright infringement and other claims.

         B. Plaintiff iQIYI's Business and Services

         Plaintiff iQIYI is the self-proclaimed “go-to internet video streaming platform in China for premium content providers.” Pl.'s Compl. at 5. Plaintiff iQIYI broadcasts its programs to viewers worldwide-including to viewers in the United States-over the Internet, through tablet applications and mobile applications. Id. Importantly, iQIYI has the sole and exclusive right in the United States to import, reproduce, distribute, publicly perform, broadcast, and enforce rights of certain Chinese language programs over the Internet, including over IPTV (collectively, the “iQIYI Exclusive Shows”). Id. The iQIYI Exclusive shows contain copyrightable subject matter under U.S. law and consist of approximately thirteen TV shows. Id. at 6-7. Plaintiffs allege that Defendant iTalk Global (and other affiliated entities) imported “into the United States, reproduced, distributed, and publicly performed, broadcasted, and otherwise exploited the iQIYI Exclusive Shows via iTalkBB's IPTV platform without authorization of Plaintiffs.” Id. at 7.

         C. Defendant iTalk Global's Business and Services

         As previously mentioned, Defendant iTalk Global sells subscriptions to the iTalkBB Chinese TV platform, which is accomplished by bundling the TV platform with subscriptions to iTalk Global's VoIP service. iTalk Global's IPTV service is made available to subscribers through the purchase of an IPTV set-top box that sits on top of the viewer's television. Compl. at 9. To stream the service, a subscriber is required to pay a monthly or annual subscription fee before the subscriber can view iTalk Global's IPTV contents. Id. iQIYI alleges that its' Exclusive Shows are shown through this set-top box and the iTalkBB IPTV platform. Thus, the streaming of iQIYI's Exclusive Shows form the basis of Plaintiff iQIYI's various claims for relief, which include: direct copyright infringement, inducement of copyright infringement and contributory copyright infringement, vicarious copyright infringement, violation of the DMCA, false designation of origin and false advertising, and common law conspiracy. See Pl.'s Compl.

         D. Procedural History

         Plaintiffs filed their Complaint on April 23, 2019. ECF No. 1. Defendant iTalk Global filed its answer to Plaintiffs' Complaint on June 28, 2019. ECF No. 16. On August 20, 2019, iTalk Global filed a motion to dismiss for forum non conveniens generally arguing that China was an adequate alternative forum and a more convenient forum in which to resolve the current dispute. ECF No. 24. On September 30, 2019, iQIYI filed its Response to Defendant's Motion to Dismiss, arguing that China is not an adequate alternative forum and it is clearly not a more convenient forum to litigate the current dispute. ECF No. 31. Defendant filed a Reply to Plaintiffs' Response on October 18, 2019. ECF No. 32. Plaintiff then filed a Sur-Reply. ECF No. 34. The Court held a hearing on the motion on December 4, 2019, in which the Court denied Defendant's Motion to Dismiss.

         II. LEGAL STANDARD

         “The essence of the forum non conveniens doctrine is that a court may decline jurisdiction and may actually dismiss a case, even when the case is properly before the court, if the case more conveniently could be tried in another forum.” In re Volkswagon of Am., 545 F.3d 304, 315 (5th Cir. 2008) (“Volkswagon II”); see also Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 341 (5th Cir. 1999) (the premise of forum non conveniens is that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized). The determination of whether a case should be dismissed for forum non conveniens is “committed to the sound discretion of the trial court.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 237 (1981).

         The defendant bears the burden of persuasion on all elements of the forum non conveniens analysis. Thus, a defendant must “establish that there is an alternate forum that is both available and adequate.” Perforaciones Exploracion Y Produccion v. Maritimas Mexicanas, S.A. de C.V., 356 Fed. App'x. 675, 679 (5th Cir. 2009). If the Court finds there is not an adequate and available forum, the inquiry ends, and the court should deny the motion to dismiss. Norex Petroleum, Ltd. v. Access Indus., 416 F.3d 146, 160 (2d Cir. 2005); Perforaciones Exploracion. 356 Fed. App'x. at 679. However, if the moving party carries its burden of establishing an alternate forum that is both adequate and available, then the defendant is charged with showing that dismissal is warranted because of certain private and public interest factors weigh in favor of dismissal. McLennan v. Am. Eurocopter Corp., Inc., 245 F.3d 403, 424 (5th Cir. 2001).

         According to the courts, the relevant private interest factors include: the “relative ease of access to sources of proof; [the] availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witness[es]; [the] possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.” Dickson Marine, 179 F.3d at 342 (internal quotes omitted). The relevant public interest factors include: the “administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty.” Id. (internal quotes omitted).

         III. DISCUSSION

         Plaintiff iQIYI has two main arguments as to why the Court should deny Defendant iTalk Global's Motion to Dismiss. First, iQIYI argues that the Court should deny iTalk Global's Motion because it cannot show that China is an adequate alternative forum. Pl.'s Resp. at 1. Secondly, in the event the Court finds that China is an adequate alternative forum, iQIYI argues that the private and public interest factors weigh against dismissing the case. Id. Because the first argument proffered by iQIYI is potentially dispositive, the Court will first address whether China is an alternative forum.

         A. Alternative Forum

         A motion to dismiss for forum non conveniens will not be granted unless there is an alternative forum in which the action can be brought. The defendant must show that the proposed alternative forum is both (1) available and (2) adequate. Piper, 454 U.S. at 254 n.22. Although some courts conflate these two issues, availability and adequacy of the proposed alternative forum are better considered as independent issues that warrant separate consideration. Cotemar S.A. De C.V. v. Hornbeck Offshore Serv., L.L.C., 569 Fed. App'x. 187, 190 (5th Cir. 2014) (establishment of foreign tribunal as available and adequate is a prerequisite to considering public and private interest factors that may support dismissal). Thus, the Court will first address whether China is both available and adequate.

         1. Whether China is Available as an Alternative Forum

         The doctrine of forum non conveniens “presupposes at least two forums in which the defendant is amenable to process.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07 (1947). Thus, an alternative forum generally is deemed available if the case and all of the parties come within that alternative court's jurisdiction.[1] Id. In this case, iQIYI does not dispute that China is “available” as an alternative forum. Therefore, the Court assumes China is available and will concentrate on the second consideration: “adequate.”

         2. Whether China is or is not an Adequate Alternative Forum

         Even if the alternative forum is available, it cannot be considered adequate-and thus the forum non conveniens motion will be denied-if the remedy offered by the other forum is clearly unsatisfactory. Piper, 454 U.S. at 254; Saqui v. Pride Cent. Am., LLC, 595 F.3d 206, 211-214 (5th Cir. 2010) (holding that Mexico was an adequate forum because plaintiff could recover damages there, even though the recovery in Mexico would be lower than in the United States). Many courts have held that an alternative forum is adequate so long as the plaintiff was not deprived of all remedies or subjected to unfair treatment in the alternative forum.[2] See, e.g., Saqui, 595 F.3d at 212 (“the mere fact that the amount of damages would be more limited under Mexican as opposed to American law, does not provide the basis for finding Mexican courts an inadequate alternative forum.”). Although defendants must carry the burden of proving an adequate forum, they may rely on a presumption that the foreign forum is adequate. Indusoft, Inc. v. Taccolini, 560 Fed. App'x. 245, 248-49 (5th Cir. 2014). However, a plaintiff can overcome that presumption by making a contrary showing. Id. In this case, iQIYI clearly articulated a contrary showing to the adequacy of Chinese courts to resolve this dispute.

         In support of its motion to dismiss, Defendant iTalk Global submits three arguments that China is an adequate alternative forum for iQIYI to assert its claims. First, iTalk Global argues that China is an adequate alternative forum because China also has copyright and trademark laws under which iQIYI can seek relief, including damages and injunctive relief. Mot. at 8. Defendant iTalk Global also notes that Plaintiffs are Chinese companies; thus, they are entitled to seek relief in Chinese courts. Secondly, iTalk Global points out iQIYI has already filed several lawsuits in China seeking the same relief it seeks in this case against iTalk Global's Chinese parent companies based on airings of the iQIYI Exclusive shows in Australia. Id. at 8. Thus, iTalk Global argues, the Chinese lawsuits filed by iQIYI confirm the adequacy of Chinese courts as an alternative forum for Plaintiff's claims. Id. Finally, iTalk Global asserts that even though the acts of infringement occurred in the United States, this does not render China an inadequate forum for iQIYI's claims. Id. at 9.

         Conversely, iQIYI argues that even though China has copyright and trademark laws, iTalk Global cannot demonstrate that China is an adequate alternative forum for this dispute. First, iQIYI asserts that it would be deprived of all remedies under Chinese law for lack of proof. Resp. at 1. Secondly, iQIYI argues that Chinese law only recognizes two of the six causes of action asserted in this case.[3] The Court will address each argument in turn. Id.

         i. China is not an Adequate Forum Because the Chinese Rules of Evidence Deny iQIYI's Requested Relief

         Plaintiffs argue that if the Court dismisses this case, iQIYI will not be able to adequately litigate the case because it does not have evidence in a form that is acceptable to a Chinese court to show copyright infringement. Pl.'s Resp. at 4. The Court agrees. The Plaintiffs should not be forced to forfeit a forum where they can obtain full relief unless the substitute forum offers at least the equivalent potential for a full recovery.

         According to the declaration of former Judge Shi Yun, [4] iQIYI will not be able to prove infringement in a Chinese court even though they would be able to in an American court. The rules of evidence in China are significantly different from those in the United States. Chinese courts permit only very limited discovery and rely almost exclusively on documentary evidence, rather than the testimony of witnesses. Former Judge Mr. Shi Yun Decl. ¶ 5.3, ECF No. 31; Xu Decl. ¶¶ 17-19, ECF No. 31. In order to prove copyright or trademark infringement in a Chinese court, a plaintiff must demonstrate infringement in the courtroom and provide notarized evidence of infringement. Former Judge Decl. ¶ 18; XU Decl. ¶ 8. It is not disputed that iTalk Global's TV service is not available in China. Thus, iQIYI would not be able to demonstrate infringement in a Chinese courtroom. This would preclude iQIYI from having the equivalent opportunity to recover damages that it would have in this Court.

         Furthermore, iQIYI cannot provide notarized evidence acceptable to a Chinese court's legal standards of admissibility. In order to obtain notarized evidence, the Chinese rules of evidence require iQIYI to obtain an official video taken by a notary company. The video must show that the notary purchased a new iTalkBB set-top box from iTalk Global, reset it to factory settings, connected it to the internet in the United States, and accessed the iQIYI Exclusive Shows from the iTalkBB platform[5]. See Former Judge Decl. ¶ 18; Xu Decl. ¶ 10. It is undeniable that the failure to follow the Chinese evidentiary rules will result in rejection of the unqualified evidence. Thus, it follows that the plaintiff's claims would be dismissed by a Chinese court for lack of proof. See Former Judge Decl. ¶¶ 19-20; Xu Decl. ¶¶ 11-13.

         In this case, iQIYI cannot now collect the necessary notarized evidence of infringement that would be necessary in a Chinese court because iTalk Global removed the iQIYI Exclusive Shows from the iTalkBB platform. Thus, the required evidence of U.S. copyright and trademark infringement that could have been used in China is now unobtainable. Compare with Shijie “Jenny” Qu Decl (“Qu Decl.”) at ¶¶ 7-10 (describing how iQIYI was able to acquire notarized evidence of infringement in a similar case against iTalk Global's Chinese parent companies). Because a Chinese court would not accept iQIYI's existing evidence of infringement, iQIYI would be left without a remedy against iTalk Global.[6] Therefore, the Court will not dismiss iQIYI's claims based on the doctrine of forum non conveniens.

         Defendant iTalk Global argues that China is an adequate alternative forum because China has copyright and trademark laws equal to that of the United States appears to be chimerical at best. The trademark and copyright protections may seem, at first, to provide adequate legal remedies; however, upon closer inspection of the evidentiary requirements, China as an adequate forum in this case is merely a mirage. It is true that China does provide for the legal protection of property interests that include copyright and other intangible property. Constitution of the People's Republic of China (1982, as amended through 2018), arts. 5, 11, 13, 20, 32. As Mr. DeLisle points out in his declaration, Chinese copyright law has been crafted to conform to the demands of international treaties and the obligations China ...


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