SAS Institute Inc. v. World Programming Limited
ORDER denying 53 Motion for Reconsideration - Signed by Chief Judge Louise Wood Flanagan on 06/22/2011. (Baker, C.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SAS INSTITUTE INC.,
WORLD PROGRAMMING LIMITED,
This matter comes before the court on plaintiff’s motion, pursuant to Rule 59(e) of the
Federal Rules of Civil Procedure, to alter or amend judgment (DE # 53). Defendant timely
responded in opposition, and plaintiff replied. In this posture, the issues raised are ripe for
adjudication. For the reasons that follow, plaintiff’s motion is denied.
On October 19, 2009, plaintiff, a North Carolina producer of computer software, filed suit
against defendant, a competing software company incorporated under the laws of England and
Wales, before the Chancery Division of the High Court of Justice (“Chancery Division”) in the
United Kingdom (“U.K.”). Plaintiff alleged copyright infringement and breach of a licensing
agreement based on allegations involving defendant’s development software that reproduces
central aspects of the popular program created by plaintiff.
On January 19, 2010, plaintiff filed a nearly identical lawsuit before this court. The
complaint in this case is premised on the same facts as the earlier-filed U.K. litigation, and includes
similar claims for copyright infringement and breach of the same licensing agreement. The
complaint here also contains state law claims for tortious interference with contract, tortious
interference with prospective business advantage, and unfair and deceptive trade practices.
While a motion to dismiss was pending before this court, the U.K. action went to trial. On
July 23, 2010, the Chancery Division issued an interim judgment, which appears on this court’s
docket as Exhibit A to plaintiff’s motion for preliminary injunction at docket entry 33. The
Chancery Division set forth detailed factual findings and addressed the merits of plaintiff’s copyright
and breach of licensing agreement claims, applying European Union (“E.U.”) and U.K. law. The
Chancery Division concluded, among other things, that defendant had infringed the copyrights in
plaintiff’s manuals by substantially reproducing them and had used plaintiff’s software in a manner
outside the scope of the relevant licensing agreement. The Chancery Division concluded that
copyright law did not protect programming languages, interfaces, and functionality from being
copied in the circumstances presented, but concluded that these important questions of E.U.
copyright law must be referred to the European Court of Justice.
On March 18, 2011, this court entered an order dismissing the action pending before it on
grounds of forum non conveniens. The court concluded that the U.K. was an adequate and available
forum for plaintiff’s claims, that the relevant evidence existed primarily in that country, that the
cost of securing the attendance of U.K. witnesses for trial in North Carolina would be high, that it
would be burdensome and inefficient to try the case a second time here, and that the court’s own
heavy docket and interests in judicial economy counseled against presiding over a lawsuit nearly
identical to one which had already reached trial and interim judgment elsewhere. Although the
court recognized that plaintiff’s choice of its home forum was entitled to some deference, it
determined that the balance of conveniences counseled in favor of dismissal where plaintiff
commenced its lawsuit in the alternate forum some three months before filing complaint here.
Plaintiff timely filed the instant Rule 59(e) motion on April 14, 2011. Plaintiff argues that
U.K. is not an “available” forum because its courts will not entertain claims for violations of U.S.
website, from which defendant’s employees allegedly copied the manuals, is sufficient to defeat a
motion for forum non conveniens. Finally, plaintiff disputes the court’s weighing of the relevant
factors, particularly the limited deference the court gave to plaintiff’s selection of its home forum.
Defendant responded in opposition on May 19, 2011. It argues that plaintiff failed to
provide new evidence or to identify a clear error of law. It also maintains that the court correctly
held in the previous order that the U.K. was an available forum, because it has a robust copyright
regime and is able to provide relief for all of the asserted causes of action. Defendant further
contends that the court, in the order challenged by plaintiff, correctly balanced the relevant factors
at issue in the forum non conveniens analysis.
Standard of Review
Rule 59(e) “permits a district court to correct its own errors, sparing the parties and the
appellate courts the burden of unnecessary appellate proceedings.” Pac. Ins. Co. v. Am. Nat’l Fire
Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (internal quotation marks omitted).
“[r]econsideration of a judgment after its entry is an extraordinary remedy which should be used
sparingly.” Id. Accordingly, a court may grant a Rule 59(e) motion in only three circumstances:
(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not
available at trial; or (3) to correct a clear error of law or to prevent manifest injustice. Bogart v.
Chapell, 396 F.3d 548, 555 (4th Cir. 2005). “Mere disagreement [with the court’s analysis] does
not support a Rule 59(e) motion.” Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993).
The court first briefly addresses plaintiff’s argument that the affidavit of its U.K. attorney
regarding the availability of a U.K. forum is “new evidence” warranting Rule 59(e) relief.
Evidence is“new” for purposes of Rule 59(e) only if there was a legitimate justification for not
presenting it during the earlier proceeding. Small v. Hunt, 98 F.3d 789, 798 (4th Cir. 1996); see also
Publishers Res., Inc. v. Walker-Davis Publ’ns, Inc., 762 F.2d 557, 561 (7th Cir. 1985) (“[A Rule
59(e) motion] cannot . . . be employed as a vehicle to introduce new evidence that could have been
adduced during the pendency of the summary judgment motion.”). Here, the affidavit presented by
plaintiff in support of the instant motion contains information that was available during the briefing
of defendant’s earlier motion to dismiss, and is not by itself grounds for relief under Rule 59(e).1
The court turns next to plaintiff’s arguments that the dismissal order was based upon clear
error. As noted, plaintiff raises three such arguments. First, it contends that the U.K. is not an
“available” forum for its copyright claims because U.K. courts will not hear claims brought under
U.S. copyright law. Second, it argues that a forum selection clause precludes a forum non
conveniens dismissal. Finally, it argues that the court improperly weighed the factors relevant to
a forum non conveniens analysis, particularly the preference that is to be given to a plaintiff’s
selection of its home forum. These three arguments are addressed in turn below.
Although not “new evidence” under Rule 59(e), the court will consider the affidavit submitted by plaintiff,
as well as that submitted by defendant, in its analysis of whether dismissal in this case was clear error.
Adequacy and Availability of the U.K. Forum
As the court noted in its earlier order, “the defendant has the burden of proof to show the
existence of an alternate, adequate, and available forum.” Galustian v. Peter, 591 F.3d 724, 731 (4th
Cir. 2010). As the Fourth Circuit noted in Galustian,
the availability requirement will be satisfied when the defendant is amenable to
process in the foreign jurisdiction. However, in certain cases the alternate forum is
unavailable where the remedy offered by the other forum is clearly unsatisfactory or
when the other forum does not provide for a cause of action for the plaintiff’s alleged
injury. As to the second factor, a forum is considered adequate when (1) all parties
can come within that forum’s jurisdiction, and (2) the parties will not be deprived of
all remedies or treated unfairly, even though they may not enjoy all the same benefits
as they might receive in an American court.
Id. (internal quotation marks, citations, and alterations omitted).
Plaintiff argues that the court erred in finding the U.K. forum to be adequate and available
because, it contends, the U.K. court will not hear its claim brought under U.S. copyright law.
Plaintiff cites LucasFilm Ltd. v. Ainsworth,  EWCA (Civ) 1328, a decision from the Court
of Appeal of the High Court of Justice in the U.K. In LucasFilm, the Court of Appeal held that U.K.
courts have no jurisdiction over U.S. copyright claims because there was no “international
jurisdiction over copyright claims.” Id. at ¶ 183. Nevertheless, the Court of Appeal in LucasFilm
did apply U.K. copyright law to the facts before it, and found no violation because the products at
issue were “toys” rather than artistic “sculptures.” See id. ¶¶ 82, 86-87, 98.
The U.K. Court of Appeal’s decision in LucasFilm does not make the U.K. an inadequate
or unavailable forum. All that is required for forum non conveniens purposes is that the alternative
forum “provide for a cause of action for the plaintiff’s alleged injury,” so long as “the parties will
not be deprived of all remedies or treated unfairly.” Galustian, 591 F.3d at 731. “[A] difference in
the law in the two forums . . . is not sufficient to bar application of the forum non conveniens
doctrine.” Compania Naviera Joanna SA v. Koninklijke Boskalis Westminster NV, 569 F.3d 189,
202 (4th Cir. 2009). The intellectual property injury complained of in plaintiff’s complaint before
this court is defendant’s alleged copying of plaintiff’s software manuals, source code, and/or the
program’s structure, sequence, and organization. Precisely the same injury was alleged before the
Chancery Court, and upon the same facts. Although the U.K. court might not have applied U.S. law,
it provides redress for the same injury under its own law, as evidenced by the Chancery Court’s
extensive statement of the law, including its citation of the protections given by treaties such as the
Berne Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights
(“TRIPS”), to which both the U.K. and the United States are signatories.
Forum Selection Clause
Plaintiff next argues that defendant agreed to a forum selection clause on its website,
providing that jurisdiction and venue would be appropriate in a federal court in this district.
Specifically, the forum selection clause states:
Access to, and use of, the information contained in this Web site are subject to the
terms and conditions listed below. . . . Your use of this Web site, including the
services provided on this Web site, signifies your agreement to follow and be bound
by these terms and conditions.
All matters relating to your access to, or use of, this Web site shall be governed by
U.S. federal law or the laws of the State of North Carolina. Any legal action or
proceeding relating to your access to, or use of, this Web site shall be instituted in
a state or federal court in Raleigh or Wake County, North Carolina. You and SAS
agree to submit to the jurisdiction of, and agree that venue is proper in, these courts
in any such legal action or proceeding.
Helwig Aff. [DE 24-11] Ex. B.
Plaintiff cites a decision from the Western District of North Carolina, which notes that the
majority of courts to have considered the issue have concluded that “a mandatory and valid forumselection clause precludes the defense of forum non conveniens.” See Celanese Acetate, LLC v.
Lexcor, Ltd., 632 F. Supp. 2d 544, 552-53 (W.D.N.C. 2009) (citing decisions from the Second,
Fifth, and Seventh Circuits as well as decisions of a number of district courts). According to
Celanese Acetate, a defendant must in effect demonstrate that the forum selection clause was invalid
under M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), to obtain a forum non conveniens
dismissal. Id. The court also noted a minority position, however, pursuant to which courts
continue to apply the regular forum non conveniens analysis even where there is a forum selection
clause. Id. at 553 (citing a First Circuit decision and a decision from a district court within the Ninth
Circuit). The Celanese Acetate court noted no Fourth Circuit case on point. Id.
The forum selection clause issue was previously briefed with respect to personal jurisdiction,
but was not mentioned by either party in the context of defendant’s request for dismissal on grounds
of forum non conveniens. And as noted above, there is no Fourth Circuit decision or other binding
authority regarding whether a forum non conveniens defense may be raised in the face of a valid,
mandatory forum selection clause. Because “Rule 59(e) motions may not be used . . . to raise
arguments which could have been raised prior to the issuance of the judgment, nor may they be used
to argue a case under a novel legal theory that the party had the ability to address in the first
instance,” see Pac. Ins. Co., 148 F.3d at 403, defendant’s Rule 59(e) motion is not the appropriate
vehicle for the court to consider in the first instance the issues raised in Celanese Acetate.2
The court also notes a continuing dispute between the parties over whether defendant agreed to the forum
selection clause and the scope of the clause as it relates to this action. The court need not delve into that inquiry to
resolve plaintiff’s Rule 59(e) motion.
Forum Non Conveniens Factors
Finally, plaintiff argues that an analysis of the forum non conveniens factors does not permit
dismissal. As the court noted in its earlier order, a “range of considerations” must be taken into
account, “most notably the convenience to the parties and the practical difficulties that can attend
the adjudication of a dispute in a certain locality.” Sinochem Int’l Co. v. Malaysia Int’l Shipping
Corp., 549 U.S. 422, 429 (2007) (internal quotation marks omitted). The court must consider:
(1) the ease of access to sources of proof; (2) the availability of compulsory process
for securing the attendance of unwilling witnesses; (3) the costs of obtaining the
attendance of witnesses; (4) the ability to view premises; (5) the general facility and
cost of trying the case in the selected forum; and (6) the public interest, including
administrative difficulties, the local interest of having localized controversies
decided at home, and the interest of trying cases where the substantive law applies.
Compania Naviera Joanna, 569 F.3d at 200.
Defendant has the burden of persuasion on all elements of the analysis, including these
factors. See Galustian, 591 F.3d at 731. Plaintiff argues that the court did not hold defendant to its
burden, and that the court’s analysis of the factors was faulty. It argues that the record is lacking
with respect to evidence that supports these factors in that defendant failed to identify any witness
testimony that cannot be obtained in the United States, and it downplays the burdens of transporting
witnesses located overseas due to the “ease” of international travel. Plaintiff also notes that
protection of a North Carolina company’s intellectual property vindicates a local interest.
As previously noted, where the court correctly sets forth the legal principles at issue,
disagreement with the court’s analysis is not generally the subject of a motion under Rule 59(e). See
Hutchinson, 994 F.2d at 1082. The court recognized the relevant factors set forth by the Supreme
Court and the Fourth Circuit, had before it sufficient evidence to establish the preferability of the
alternate U.K. forum based upon those factors, and concluded that the Chancery Division in the U.K.
was able to provide the parties with a resolution that was timely and inexpensive in circumstances
where this court could not. The court gave dispositive weight to no one factor, including plaintiff’s
selection of its home forum. In these circumstances, the court declines to engage a second time,
under Rule 59(e), in the forum non conveniens balancing.
In their briefing, the parties have raised for the court’s consideration a variety of interesting
and complex questions of law. But after considering the able arguments of counsel for both sides,
the court is unable to conclude that it clearly erred in dismissing this action on for forum non
conveniens. As such, and for the reasons set forth more particularly above, plaintiff’s motion to
alter or amend judgment pursuant to Rule 59(e) (DE # 53) is DENIED.
SO ORDERED, this the 22nd day of June, 2011.
LOUISE W. FLANAGAN
Chief United States District Court Judge