Cordis Corp., In re
| Citation | 226 USPQ 784,769 F.2d 733 |
| Decision Date | 10 July 1985 |
| Docket Number | No. 53,53 |
| Parties | In re CORDIS CORPORATION, Petitioner. Misc. |
| Court | United States Courts of Appeals. United States Court of Appeals for the Federal Circuit |
Granger Cook, Jr., Cook, Wetzel & Egan, Chicago, Ill., for petitioner. With him on brief was Dean A. Monco, Cook, Wetzel & Egan, Chicago, Ill.
Lawrence C. Brown, Faegre & Benson, Minneapolis, Minn., for respondent. With him on brief were Elizabeth L. Taylor, Faegre & Benson, Minneapolis, Minn., of counsel and Robert C. Beck, Medtronics, Inc., Minneapolis, Minn.
Before MARKEY, Chief Judge, FRIEDMAN, and RICH, Circuit Judges.
Cordis Corporation (Cordis) has petitioned for a writ of mandamus ordering the United States District Court, District of Minnesota, to dismiss the present action for improper venue. We deny the petition.
On February 10, 1984, Medtronic, Inc. (Medtronic), a Minnesota corporation with its principal place of business in Minneapolis, Minnesota, filed a complaint in the United States District Court for the district of Minnesota against Cordis alleging patent infringement with respect to four patents owned by Medtronic, as a result of Cordis' sales of implantable heart pacers in Minnesota.
Cordis, a Florida corporation, with its principal place of business in Miami, Florida, filed a motion to dismiss pursuant to Rule 12(b), Fed.R.Civ.P., challenging venue on the basis that Cordis does not have a regular and established place of business in the district of Minnesota. Cordis also contended that no acts of infringement occurred in Minnesota as it claimed that all sales are completed in Florida. The district court denied Cordis' motion to dismiss finding that venue was properly laid in Minnesota.
In its petition for mandamus, Cordis has not specifically challenged any of the incidental factual findings of the district court contained in the district court's memorandum and order dated January 16, 1985, wherein the court denied Cordis' motion to dismiss. Cordis does, however, challenge the court's finding that it has a regular and established place of business in Minnesota, and that it has committed acts of infringement therein, so as to come within the scope of 28 U.S.C. Sec. 1400(b).
Venue in patent infringement actions is controlled exclusively by 28 U.S.C. Sec. 1400(b) which provides:
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.
For purposes of the patent venue statute, a corporation is a resident only of the state in which it is incorporated. Fourco Glass Co. v. Transmirra Co., 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786 (1957). Accordingly, Medtronic is relying upon the second test to demonstrate that venue for this action is proper in Minnesota.
The undisputed facts as found by the district court may be summarized as follows. Cordis is a Florida corporation with its principal place of business in Florida, which sells cardiac pacemakers. To market its pacemakers in Minnesota, Cordis employs two full-time sales representatives, William R. Rutstein and Dixon P. Dahlberg, each based in Minnesota. Both are paid a salary plus commission and they work exclusively for Cordis, which supplies them each with a company owned car.
Cordis is not registered to do business in Minnesota. It does not have a bank account, and it neither owns nor leases an office, house nor any property within the state. Rutstein and Dahlberg maintain offices in their homes. They store Cordis literature, documents and products there. They also complete their paperwork and do other administrative tasks in their home offices. Both claim an income tax deduction for these offices. Rutstein generally keeps about $30,000 worth of Cordis products in his home office while Dahlberg usually has approximately $60,000 worth of Cordis products on hand.
Cordis has engaged a secretarial service in Minnesota, named "I Got It Secretarial", to receive messages, provide typing services, mail Cordis literature and receive shipments of Cordis sales literature. Cordis pays for this service either directly or through reimbursing Rutstein and Dahlberg for any payments made by them. The business cards of Dahlberg and Rutstein list the telephone number answered by the secretarial service. Phone calls to this number are answered "Cordis Corporation." The Minneapolis telephone directory includes Cordis' name and telephone number and lists the address of the secretarial service as Cordis' address. Cordis' name however does not appear on the director of the building occupied by the secretarial service.
Manufacturers of cardiac pacemakers generally market their products through sales representatives who call on physicians or other personnel at the physician's offices or at the hospitals. Hospitals or physicians may order the Cordis pacemakers in several ways. They may order them directly from Cordis' Florida office to be held on consignment at the hospital. In this case, the orders may be placed for the hospital by Cordis' Minnesota sales representatives. However, if a hospital does not wish to maintain a stock of the pacemakers, it may obtain the device directly from the Cordis sales representative before surgery. In this manner the pacemaker is provided to the hospitals from the stock kept by the sales representative and the device is obtained without a formal purchase order. Following the surgery, Rutstein and Dahlberg file the necessary paperwork to obtain payment for the device and to obtain a replacement for their inventory.
In addition to acting as sales representatives, Rutstein and Dahlberg act as technical consultants and in this capacity they are present in the operating room during a significant number of surgical implantations of Cordis pacemakers. During the implantation they provide technical product information to the physician. In addition, they provide post-implantation consultations. Both men also give presentations to small groups of medical personnel regarding technological developments.
In light of Cordis' activities in Minnesota and in light of the nature of the particular business involved, the district court found that the fact that Cordis' representatives do not perform their sales functions from a fixed, physical location such as a rented office space, was not determinative of the issue of whether Cordis maintained a regular and established place of business in Minnesota.
The district court also found that Cordis has committed acts of infringement within Minnesota as a result of its continuous solicitation of sales by its resident representatives, coupled with their demonstrations and technical consultations concerning the pacemakers.
Before this court, Cordis contends that the fact that it does not rent or own a fixed physical location within Minnesota absolutely precludes a finding that it has a regular and established place of business as required by Sec. 1400(b). Cordis further contends that no acts of infringement were committed within the district as all sales occurred in Florida. Thus, Cordis urges that this court issue a writ of mandamus against the district court directing dismissal of this action.
Pursuant to the All Writs Act, 28 U.S.C. Sec. 1651(a) (1976), this court has the authority to issue the requested writ as "necessary or appropriate in aid of" our...
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