Ah, litigation. Nothing ever really gets done, but the lawyers get paid, and there’s always drama. The Vostu v. Zynga case exemplifies all of this. And it just got weird to boot. Today a U.S. judge just told a Brazilian court that they can’t shut down a Brazilian startup. That’s definitely a new one for me.
Background: On June 16 Zynga sued Brazilian clone Vostu in California for stealing Zynga’s games. Vostu’s initial press response was to (1) point out that the two companies have overlapping investors, and (2) make note of Zynga’s less than pristine past when it comes to respecting others’ intellectual property. I called that the “I know you are but what am I defense.”
That’s always a crowd pleaser, but courts often hold themselves to a higher standard. So last month Vostu filed a response to Zynga’s lawsuit. That response also brings up another defense – that the lawsuit is retribution by Zynga over a failed attempt by Zynga to create a “strategic relationship” with Vostu. That should have been the end of the news cycle for a while – U.S. courts never really decide anything, so a year could go by before we heard about this case again.
Everything above is standard lawsuit behavior. But Zynga’s next move was a good one. They filed another lawsuit, this time on Vostu’s home court – Brazil. They also sued Google for distributing the games (notably they did not sue Facebook, their golden goose). A Brazilian judge quickly granted Zynga’s request for an injunction. Vostu had to shut down its games in 48 hours.
A Brazilian judge siding with a U.S. company against a local startup? No one saw that coming.
But wait…there’s more. Today U.S. District Judge Edward Davila issued an order restraining Zynga from enforcing the Brazilian decision.
Despite the fact that “Brazil has an important interest in enforcing its copyright laws,” says Judge Davila, they don’t get to do so. “Zynga—which chose the U.S. forum first—now seeks to enforce an injunction it obtained abroad that would paralyze this Court’s ability to decide this case.”
So which argument wins? Davila’s opinion is that his court’s desire to retain the ability to decide the case outweighs Brazil’s right to enforce its copyright laws. His words, neatly spliced and moved around of course, but not mine.
With this decision, I’m officially no longer really interested in the merits of the case. What I’m fascinated with is how these two courts are going to thrash out who gets to decide what. I sort of agree that this Brazilian court may have acted rashly in giving Vostu 48 hours to shut down. But they definitely get points for being awake and making decisions quickly, just days after the Brazilian lawsuit was filed.
U.S. courts would never move that fast. Unless, apparently, someone’s trying to usurp their jurisdiction.
My favorite part is near the end where Judge Davila, after trashing the Brazilian court’s decision, then goes on about how this isn’t meant to cast doubt or express opinion about the wisdom of the Brazilian court.
It deserves strong emphasis that a TRO would not enjoin the Brazilian court at all. Nor does a TRO from this Court cast doubt on or express any opinion about the wisdom of the Brazilian proceedings. Rather, a TRO would enjoin Zynga…from flouting this Court’s jurisdiction. The fact that the flouting mechanism involves foreign courts is incidental.
It’s just such a wonderful way to rub it all in. No offense, Brazil. We’re not doing this to make you look bad. That’s just “incidental.”
The full order is below.