Bell Helicopter loses suit against Iran in US courts

Iran keeps telling its people that the American courts aren’t fair, even for Americans, let alone Iran.  But despite that rhetoric, Iran still chose to fight Bell Helicopter—and now the Great Satan says Iran was right.

This was not a terrorism suit of the kind that Iran refuses to fight and perpetually loses in the United States.

In this case, Bell Helicopter charged Iran with copying its helicopter design through reverse engineering and without paying Bell, thus stealing from Bell.  In other words, it was a trademark infringement suit.

Bell claimed that Iran’s Shahed 278 helicopter was just a copy of the Bell 206.

Bell sued in 2006.  Iran did not show up in court in 2009 and lost by default.  But earlier this year, Iran went to court to argue that Bell could not sue the Iranian government under the US Foreign Sovereign Immunities Act (FSIA), a law that is more than 200 years old and says foreign governments may only be sued in the United States in certain rare circumstances.

Iran tries to use the FSIA to argue it can’t be sued for alleged terrorist acts, but the FSIA specifically allows suits against foreign governments accused of terrorism.

In the Bell case, however, US District Judge Amy Berman Jackson agreed with Iran that it was exempt and threw the Bell suit out of court.

The FSIA contains nine exceptions that allow a foreign state to be sued in a US court.  One of those exceptions allows suits when a state engages in “commercial activity” that has a “direct effect in the United States.”  That word “in” proved crucial.

The court said—and Iran did not dispute—that building helicopters for sale on the public market is a commercial activity.  But the judge noted that the helicopters were made in Iran and sold in other countries, but not “in the United States” because of the US trade sanctions on Iran.

The court granted that Bell lost money that it would have gained if Iran paid for the rights to make the Bell design.  But the court said a financial loss from commercial activity abroad does not constitute a “direct effect in the United States.”

The court did not question that Iran had stolen Bell’s design.  It even noted testimony that the Shahed 278 incorporated design features that were purely cosmetic and intended to give a Bell “look” without having anything to with operating the helicopter.

With that, Judge Jackson simply dismissed the Bell suit and Iran walked out of court the winner.