Up-Right, Inc. v. Aluminum Safety Products, Inc.

165 F. Supp. 742, 118 U.S.P.Q. (BNA) 478, 1958 U.S. Dist. LEXIS 3745
CourtDistrict Court, D. Minnesota
DecidedAugust 26, 1958
DocketNo. 4-57 Civ. 147
StatusPublished
Cited by4 cases

This text of 165 F. Supp. 742 (Up-Right, Inc. v. Aluminum Safety Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Up-Right, Inc. v. Aluminum Safety Products, Inc., 165 F. Supp. 742, 118 U.S.P.Q. (BNA) 478, 1958 U.S. Dist. LEXIS 3745 (mnd 1958).

Opinion

NORDBYE, Chief Judge.

On December 18, 1957, Up-right, Inc., a California corporation, and Wallace J. S. Johnson, a resident of California, filed suit in this District for patent infringement against defendant, a Pennsylvania corporation. The patent allegedly infringed is one for aluminum scaffolding. Service was obtained upon one Wayne K. Brush, a Minnesota resident, and “regional sales manager for defendant.” The venue is governed by 28 U.S.C.A. § 1400(b), which provides that

“Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

[744]*744There are, therefore, two questions before-the Court: (1) Did defendant have a regular and established place of business in Minnesota; and (2) did the defendant commit acts of alleged infringement in this State?

It appears that Brush is the sales representative for defendant in the area covering Minnesota, the Dakotas, and western Wisconsin. The defendant is not licensed to do business in this State. Brush solicits business and takes orders for defendant’s product in the area allotted to him, including Minnesota. All orders taken by him are not valid or binding upon the defendant unless and until the same shall have been approved and signed by a duly authorized officer at the home office in Pennsylvania. It is clear that any orders produced and procured by Brush which become sales are accomplished in Pennsylvania and not in Minnesota. Brush lives in a duplex and works out of his home in Minneapolis. He took up residence in this State in June, 1957. There are no other employees of the defendant here. Brush’s wife apparently assists him in taking care of correspondence, etc., and uses a typewriter for that purpose. She does not receive any compensation, however, from the defendant, and the typewriter belongs to Brush, not to the defendant. Defendant does pay, however, for a separate telephone listing in both the alphabetical and classified directories as “Aluminum Safety Products, Inc.” The telephone number is listed for the address at which Brush resides. Inasmuch as Brush did not reside in Minneapolis prior to June, 1957, the listing was not in the telephone directory when suit was brought or when the alleged infringement took place. Brush has a desk in his bedroom which he uses for keeping records and correspondence. None of the so-called office equipment, however, belongs to the defendant. Brush's garage is used for storing some of the samples of defendant’s products. Defendant pays no rent for the use of Brush’s premises. Defendant furnishes Brush, however, with the use of an automobile in covering his territory. The mailing address of the defendant in Minnesota is at Brush’s home. Telephone calls are received and emanate from there in connection with defendant’s business in this State and presumably elsewhere. Customers of the defendant do not call personally at Brush’s residence. The actual solicitation of business for the defendant in this State is primarily carried on by Brush personally through the use of the automobile furnished to him by the defendant. He carries no inventory, makes no collections, does not pass on credits, and does not perform any business for the defendant in this State except to solicit and take orders and forward them to the defendant at its home office for acceptance or rejection. All orders filled by the defendant are shipped direct to the customer.

There is no question but that defendant is doing business in this State in the sense that Brush, its employee, is engaged in the solicitation of orders, all of which, however, are subject to the defendant’s approval. The question arises, Do these facts justify a finding that defendant maintains a regular and established place of business within this District ?

The fact that Congress required not only that venue must be based upon acts of infringement occurring in the particular District, but also a showing that such alleged infringer has a regular and established place of business therein, would indicate that it was fully cognizant of the problems confronting the one who was charged with patent infringement. It is evident that Congress intended that the forum of a patent infringement suit should be one reasonably convenient to the defendant.

It is true that no reliable test has been devised by which a court can determine whether or not a foreign corporation maintains a regular and established place of business within any certain District. In some instances, the very extent and manner of doing business in a State may be sufficient to support a finding [745]*745that the alleged infringer has a regular and established place of business therein. Ronson Art Metal Works, Inc., v. Brown & Bigelow, Inc., D.C.S.D.N.Y.1952, 104 F.Supp. 716, affirmed 2 Cir., 199 F.2d 760. Generally, however, something more tangible is required by the courts. In Elevator Supplies Co. v. Wagner Mfg. Co., D.C.S.D.N.Y., 54 F.2d 937, 938, the court held that

“* * * the maintenance of an office by a foreign corporation, however long continued and however well equipped, to be used by its employees in soliciting business and doing things incidental to procuring orders for goods manufactured and sold by such corporation in another jurisdiction, does not constitute the maintenance of a regular and established place of business within the meaning of 28 U.S.C.A. § 109.” Section 109 is the predecessor to § 1400 (b).

The Elevator Supplies Co. case relies upon W. S. Tyler Co. v. Ludlow-Saylor Wire Co., 236 U.S. 723, 35 S.Ct. 458, 59 L.Ed. 808, in which it appears that a sales representative maintained an office for a foreign corporation in New York. The representative, however, merely solicited orders and forwarded them when received to the home office for execution. The court there held that the operation of such an office was insufficient to support the allegation of a regular and established place of business.

There are cases, however, which markedly have relaxed the rule indicated in the Tyler case and seemingly espouse the so-called more modern and liberal rule. Shelton v. Schwartz, 7 Cir., 1942, 131 F. 2d 805; Urquhart v. American La France Foamite Corp., 1944, 79 U.S.App.D.C. 219, 144 F.2d 542, certiorari denied 323 U.S. 783, 65 S.Ct. 273, 89 L.Ed. 625; Federal Electric Products Co. v. Frank Adam Electric Co., D.C.S.D.N.Y.1951, 100 F.Supp. 8; Latini v. R. M. Dubin Corp., D.C.N.D.Ill.1950, 90 F.Supp. 212; Kerr v. Port Huron Sulphite & Paper Co., D.C.D.N.J.1957, 157 F.Supp. 685; Sherman Paper Products Corp. v. Sorg Paper Co., D.C.E.D.Mich.1958, 161 F. Supp. 44.

Perhaps the broadest language used in construing the term “a regular and established place of business” is to be found in Shelton v. Schwartz, supra, 131 F.2d at pages 808-809:

“Nor should the term ‘a regular and established place of business’ be narrowed or limited in its construction. Why should it be? The words do not necessitate nor warrant it. A foreign corporation may have a regular and established place of business, although the business therein is merely securing orders and forwarding them to the home office of the non-resident corporation.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Kwake v. Custom Pools, Inc.
334 F. Supp. 430 (D. Minnesota, 1971)
Medtronic, Inc. v. American Optical Corporation
337 F. Supp. 490 (D. Minnesota, 1971)
Lindly & Co. v. Karl H. Inderfurth Co.
190 F. Supp. 875 (E.D. North Carolina, 1961)
B. HELLER & COMPANY v. First Spice Manufacturing Corp.
172 F. Supp. 46 (N.D. Illinois, 1959)

Cite This Page — Counsel Stack

Bluebook (online)
165 F. Supp. 742, 118 U.S.P.Q. (BNA) 478, 1958 U.S. Dist. LEXIS 3745, Counsel Stack Legal Research, https://law.counselstack.com/opinion/up-right-inc-v-aluminum-safety-products-inc-mnd-1958.