Latini v. RM Dubin Corporation, 49 C 955.

• Court: U.S. District Court — Northern District of Illinois
• Writing for the Court: Dawson, Ooms, Booth & Spangenberg, Chicago, Ill., for defendant
• Citation: Latini v. RM Dubin Corporation, 90 F. Supp. 212 (N.D. Ill. 1950)
• Decision Date: 25 January 1950
• Docket Number: No. 49 C 955.,49 C 955.
• Parties: LATINI et al. v. R. M. DUBIN CORPORATION.

90 F. Supp. 212

LATINI et al. v. R. M. DUBIN CORPORATION.

No. 49 C 955.

United States District Court N. D. Illinois. E. D.

January 25, 1950.

Harry C. Alberts, Chicago, Ill., for plaintiffs.

Dawson, Ooms, Booth & Spangenberg, Chicago, Ill., for defendant.

CAMPBELL, District Judge.

In this action plaintiffs seek legal and equitable relief for alleged patent infringement. Plaintiff Latini is the owner of a patent issued on a chocolate decorating machine, and Chocolate Spraying Co. holds an exclusive license for the manufacture and sale of said machine. The complaint was filed on June 9, 1949. Without having answered the complaint or otherwise pleaded, defendant, on October 12, 1949, moved to quash service of summons and to dismiss the complaint for lack of jurisdiction. On the following day, plaintiffs moved for judgment by default.

The following facts are revealed in the pleadings, affidavits and briefs of the parties. One Frank J. Keeley acted as defendant's sales representative in Chicago. Defendant is a California corporation and has its principal place of business in that State, but advertised itself in the Chicago classified telephone directory, in which it included Keeley's name as its representative. Keeley did not receive a salary from defendant as an employee, but was compensated by means of commissions. He was authorized only to solicit orders for defendant's products and forward them to defendant in California for acceptance. He was permitted to represent other concerns during the period he represented defendant, but was reimbursed by defendant for expenses, such as the renting of office space and payment of telephone bills. During the period June 5-9, 1949, defendant maintained a booth at the Confectionery Industries Exposition in Chicago, in which booth the alleged infringing machine was displayed. Plaintiffs' affidavits state that at least one order for the sale of the machine was accepted by defendant's president, R. M. Dubin. Summons was served on Dubin while he was attending the exposition. Defendant contends that it is a California corporation, does not do business in Illinois, and did not commit an act of infringement within the jurisdiction of this Court.

The pertinent venue provision in regard to suits for patent infringement is found in 28 U.S.C.A. § 1400(b): "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."

Provisions for service of process in this type of action are contained in 28 U.S.C.A. § 1694: "In a patent infringement action commenced in a district where the defendant is not a resident but has a regular and established place of business, service of process, summons or subpoena upon such defendant may be made upon his agent or agents conducting such business."

The problem of determining when a corporation is doing business or has a regular and established business within a judicial district of which it is not a resident, has long been a vexatious one for courts. However, in recent years the tendency of the courts has been to prevent a corporation from interposing its corporate citizenship when its actions elsewhere are detrimental to others, and to require it to assume certain responsibilities in exchange for the privilege of obtaining a lucrative portion of its business from other areas. This view is clearly expressed by the Court of Appeals of this circuit in the case of Shelton v. Schwartz, 7 Cir., 131 F.2d 805, 807:

"It would seem quite intolerable (speaking from a practical point of view) to permit a foreign corporation to flood a state with soliciting agents, maintain an office for them, pay and support them, and thus obtain a large volume of business, without giving the customers who were successfully solicited by the foreign corporation's agents, redress in the state where the cause of action arose. To permit a foreign corporation which has failed to comply with the state law requiring registration and licensing, to escape, while holding the foreign corporation,...