648 F. App'x 398
5th Cir.2016Background
- Wellogix and SAP litigated multiple disputes stemming from licensing and related dealings; key suits include SAP’s 2010 Patent Case (declaratory noninfringement/invalidity) and Wellogix’s severed Trade Secrets Case.
- The licensing agreement contains a forum selection clause requiring litigation in Germany.
- The district court dismissed the Trade Secrets Case on forum non conveniens grounds, enforcing the German forum clause.
- After that dismissal, Wellogix raised for the first time that diversity jurisdiction was lacking because both parties are Delaware corporations.
- The district court treated the severance order as rescinded and exercised supplemental jurisdiction to dismiss the Trade Secrets claims under the forum clause, rejecting Wellogix’s jurisdictional and waiver arguments.
- The Fifth Circuit affirmed, holding the district court did not abuse its discretion enforcing the forum clause and that SAP did not waive it by filing the Patent Case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court lacked subject-matter jurisdiction over the Trade Secrets claims because diversity was absent | Wellogix: diversity did not exist (both Delaware corps), so dismissal based on forum non conveniens was improper without resolving jurisdiction | SAP: court may dismiss on forum non conveniens without first deciding jurisdiction; district court’s approach preserved dismissal | Court: affirmed dismissal; Sinochem permits dismissal on forum non conveniens before resolving subject-matter jurisdiction; no abuse of discretion |
| Whether SAP waived the forum selection clause by filing the Patent Case in U.S. court | Wellogix: filing the Patent Case in U.S. court constituted waiver of the German forum clause as to the Trade Secrets claims | SAP: expressly reserved rights; did not intend to relinquish clause; consistently invoked it; no prejudice to Wellogix | Court: no waiver; SAP preserved clause and did not substantially invoke judicial process to prejudice Wellogix |
| Standard/law governing waiver of a forum selection clause | Wellogix: (argued generally) waiver principles apply to preclude enforcement | SAP: federal law governs enforceability; forum state choice-of-law rules govern interpretation; waiver tests similar to arbitration-waiver tests | Court: applied both federal and Texas approaches and concluded result is the same—no waiver |
| Whether Atlantic Marine/venue precedent affects waiver analysis | Wellogix: relied on older authority to argue venue filing waives forum clause | SAP: Atlantic Marine clarified forum-selection clauses do not render venue improper; older cases inapposite | Court: Atlantic Marine undermines relevance of older venue-based waiver cases; district court rightly rejected them |
Key Cases Cited
- Sinochem Int’l Co. v. Malay. Int’l Shipping Corp., 549 U.S. 422 (2007) (federal courts may dismiss on forum non conveniens without resolving subject-matter jurisdiction)
- Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S. Ct. 568 (2013) (forum-selection clauses do not make venue ‘wrong’ or ‘improper’ under federal venue rules)
- Weber v. PACT XPP Techs., AG, 811 F.3d 758 (5th Cir. 2016) (federal law governs enforceability of forum-selection clauses; forum state choice-of-law rules govern interpretation)
- Al Rushaid v. Nat’l Oilwell Varco, Inc., 757 F.3d 416 (5th Cir. 2014) (waiver of arbitration rights requires substantial invocation of judicial process and resulting prejudice)
- Gen. Elec. Co. v. Marvel Rare Metals Co., 287 U.S. 430 (1932) (historic patent-venue authority relied on by respondent but distinguished as inapposite here)