Micro Focus (US), Inc. v. Bell Canada (Maryland U.S.D.C.)

Filed: February 23, 2010
Opinion by Judge Roger W. Titus

Held: The forum selection clause in the license agreement between the parties did not allow courts in Maryland to exercise personal jurisdiction over Bell Canada, a Canadian corporation with its principal place of business in Toronto. Other than this provision, the plaintiffs did not assert any other basis for the exercise of personal jurisdiction over Bell Canada.

Facts and Analysis: Prior to December 31, 2008, Bell Canada entered into a license agreement with Micro Focus for certain software. The license agreement had the following provision:

If Licensee acquires the Software in North America, the laws of the state of Maryland govern this License Agreement. If Licensee acquires the Software in France, Germany or Japan, this License Agreement is governed by the laws of the country in which Licensee acquired the Software. In the rest of the world the laws of England govern this License Agreement. The aforesaid applicable law shall apply without regard to conflicts of laws provisions thereof, and without regard to the United Nations Convention on the International Sale of Goods. This License Agreement shall be subject to the exclusive jurisdiction of the courts of the country determining the applicable law as aforesaid.

(Emphasis by the Court.)

Applying Maryland law, the Court found that Micro Focus' interpretation was unreasonable:

Micro Focus’ interpretation requires two questionable inferences. The first inference is that the “country” governing licenses executed by North Americans must be the United States because Maryland is part of the United States. The second inference is that “courts of the country” means all federal courts in the United States. Both inferences are tenuous. Accordingly, the Court rejects Micro Focus’ contention that the forum selection clause unambiguously refers to the federal courts of the United States.

(Footnote omitted.)

Further, the Court found that the "clause at issue is . . . nonsensical in that it vests courts with exclusive jurisdiction over a 'License Agreement' rather than over parties or over actions arising out of the License Agreement."

Perhaps as an admonition to drafters of contracts, the Court warned that "the best of intentions, if not clear and unequivocally communicated, simply will not suffice when it comes to a waiver of objections to personal jurisdiction."

The full opinion is available in PDF. The opinion has been approved for publication.