Color Switch LLC v. Fortafy Games DMCC
377 F. Supp. 3d 1075
E.D. Cal.2019Background
- Color Switch, a California company, developed the mobile game "Color Switch" and entered a series of publishing agreements first with EyeBoxGames (UAE) and later with Fortafy (UAE); the operative June 2016 publishing agreement contained an identical choice-of-law (UAE) and exclusive-jurisdiction (Court of Dubai) clause.
- The publishing agreement granted Fortafy broad update/developer rights (including language that the developer "does not get any right on the work of updating conducted by the Publisher") and an 80/20 revenue split in favor of the publisher; Color Switch retained an asserted underlying copyright.
- Color Switch terminated the publishing agreement in May 2017 and requested de-publication and transfer of the game's current version; Fortafy de-published but refused to transfer the current version or developer account.
- Color Switch sued in federal court asserting copyright infringement, declaratory relief, breach of contract, and conversion; Fortafy moved to dismiss under Rule 12(b)(3) enforcing the forum-selection clause via forum non conveniens.
- The district court considered extrinsic evidence, concluded the copyright/declaratory claims were "in connection with" the contract, found the forum-selection clause valid, held Color Switch failed to show fraud/coercion or deprivation of its day in court, found public-interest factors favored dismissal, and granted dismissal without leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of forum-selection clause to copyright and declaratory claims | Copyright/declaratory claims are federal and outside contractual forum clause; copyright predated agreement | Claims arise "in connection with" the publishing agreement and require contract interpretation (work-for-hire, update rights) | Clause applies; copyright and declaratory claims are within its scope |
| Validity of clause (fraud, coercion, overreaching) | Clause was procured through unequal bargaining power, threats, and lack of counsel in earlier deals | Clause is presumptively valid; Color Switch was represented when signing operative agreement and allegations are conclusory | Clause valid; no sufficient evidence of fraud, coercion, or overreaching |
| Whether enforcement deprives plaintiff of its day in court | UAE law offers weaker remedies; cannot obtain U.S. Copyright Act relief or comparable remedies in Dubai | UAE courts can hear contractual/IP disputes and provide some avenue for redress; plaintiff waived U.S. forum for contract-related disputes | Enforcement does not deprive Color Switch of its day in court; alternative forum adequate |
| Public-interest factors and dismissal under forum non conveniens | U.S. has a local interest (Color Switch is U.S. company; U.S. copyright policy) | Parties bargained for Dubai; administrative/case-congestion and local interests favor Dubai | Public-interest factors favor enforcing the clause and dismissal to Dubai |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49 (forum-selection clauses normally enforced; once valid, consider public-interest factors only)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (forum-selection clauses presumptively valid absent strong cause)
- Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133 (challenger bears heavy burden to show clause unreasonable)
- Manetti-Farrow, Inc. v. Gucci Am., 858 F.2d 509 (tort claims fall within forum clause if resolution requires contract interpretation)
- Creative Tech., Ltd. v. Aztech Sys. Pte., Ltd., 61 F.3d 696 (forum non conveniens does not bar foreign courts from applying U.S. copyright law; differences in remedies not dispositive)
- Argueta v. Banco Mexicano, S.A., 87 F.3d 320 (Rule 12(b)(3) allows courts to consider facts outside pleadings)