Remington Rand B. Service v. Acme Card System Co.

• Decision Date: 11 June 1934
• Docket Number: No. 3603.,3603.
• Citation: 71 F.2d 628
• Parties: REMINGTON RAND BUSINESS SERVICE, Inc., v. ACME CARD SYSTEM CO.
• Court: U.S. Court of Appeals — Fourth Circuit

71 F.2d 628 (1934)

REMINGTON RAND BUSINESS SERVICE, Inc., v. ACME CARD SYSTEM CO.

No. 3603.

Circuit Court of Appeals, Fourth Circuit.

June 11, 1934.

Edwin T. Bean, of Buffalo, N. Y. (Bean & Brooks, Richard W. Treverton, and Barton A. Bean, Jr., all of Buffalo, N. Y., and John H. Skeen, of Baltimore, Md., on the brief), for appellant.

William F. Hall, of Washington, D. C. (J. Kemp Bartlett, of Baltimore, Md., and Lee J. Gary, of Chicago, Ill., on the brief), for appellee.

Before PARKER and SOPER, Circuit Judges, and WAY, District Judge.

SOPER, Circuit Judge.

This case involves three patents relating to listing devices or visible index systems which are used in business offices and other institutions where it is important to have immediate access to information which otherwise would be accumulated in files. There are two patents to Powell in suit; No. 1,594,112, for an index strip sheet granted July 27, 1926, upon an application filed July 14, 1922, and No. 1,683,207, for an index strip, granted September 4, 1928, upon an application filed July 2, 1926, as a division of the last-mentioned application. The third patent in suit, No. 1,394,231, was issued to Soans on October 18, 1921, on an application filed May 28, 1914, upon a device for holding index strips.

The index strips disclosed in the Powell patents are marketed under the name "Flexoline" and are designed for the convenient handling of data contained in a single line or two, when it is important that a large number of such records shall be immediately available for instant inspection, and yet be subject to easy change by substitution or elimination. The Soans patent relates to a panel to support these index strips in such a position that they may be seen readily and quickly.

A preliminary question in the case concerns the dismissal by the District Court of a motion made by the defendant to dismiss the plaintiff's bill for lack of jurisdiction, on the ground that the defendant had no regular and established place of business, and had not committed any act of infringement of the patents named in the district of Maryland. Section 48 of the Judicial Code, 28 USCA § 109, confers jurisdiction upon the District Courts of the United States in suits for the infringement of letters patent in the district of which the defendant is an inhabitant, or in any district in which the defendant shall have committed acts of infringement and shall have a regular and established place of business.

Remington Rand Business Service, Inc., the defendant in the District Court, is a Delaware corporation which has its principal place of business at Buffalo, N. Y. It has been engaged in the business of selling a general line of office equipment, machines, and supplies; it has operated an office and salesroom at 130 West Fayette street, Baltimore, Md., for more than five years prior to the institution of the pending suit under the supervision of a regional sales manager for the sale of products sold by the defendant; the Baltimore office has been under the control of a zone sales office of the defendant in New York City, where, with the exception of a register of orders, the books of account of the business done in Baltimore have been kept; a stock of goods has been kept on hand in the Baltimore store, and orders have been there solicited subject to approval and acceptance by the New York office, and in addition sales have been made in the Baltimore store without communicating with New York if the credit of the proposed purchaser is good. In addition to the regional sales manager, an office manager has had charge of the inventory of the goods in the Baltimore store, and one or more floor salesmen have been employed. Amongst other articles which the defendant sells is one called "Lignodex," consisting of index strips, which are charged to infringe the Powell patents. None of this article has been kept for sale in Baltimore, but it has been in use by the Chesapeake & Potomac Telephone Company in that city in connection with frames furnished by the defendant and charged to infringe the Soans patent. These goods had been sold to representatives of the telephone company outside the state, and had been furnished for use therein. The frames sometimes got out of order, and, when this occurred, it was the practice of the Baltimore office to render service to restore them to good condition.

We think it must be said, from this recital of the facts, that the defendant has maintained in Maryland a regular and established place of business. It is true that the express terms of the statute import something more than the mere doing of business in the district, and that the mere maintenance of an office from which orders may be solicited and forwarded to the home office in another state, followed by the shipment of goods direct, does not constitute a regular and established place of business within the meaning of the act. Tyler Co. v. Ludlow-Saylor Wire Co., 236 U. S. 723, 35 S. Ct. 458, 59 L. Ed. 808; Winterbottom v. Casey (D. C.) 283 F. 518. See, also, authorities cited in Elevator Supplies Co. v. Wagner Mfg. Co. (D. C.) 54 F.(2d) 937. Here we have, however, not merely the solicitation of orders, subject to the approval of the home office, but also the maintenance of a stock of goods and sales therefrom to responsible customers without prior reference to the home office; and, in addition, employees who serve customers by keeping in proper working order merchandise purchased from the defendant. Considering that this place of business has been long operated under a resident sales manager, we think that the terms of the statute are satisfied.

It is also clear that infringement of the patents in suit took place in Maryland prior to the beginning of the litigation. After the institution of the suit, articles infringing the patents were sold for cash to a customer who had placed an order at the instigation of the plaintiff. The order called for goods similar to those then in use by the telephone company in Baltimore. The telephone company's equipment had been purchased from the defendant outside the state prior to the suit, and had been thereafter used by the telephone company in the state. There was no proof of local manufacture or sale by the defendant prior to suit; but there was proof that the defendant had contributed to prior local use of the articles by the telephone company by rendering service through its Baltimore office in keeping in repair the frames in which the index strips were inclosed and made available. It is admitted that the index strips of the telephone company infringe the Powell patent, and it will be hereafter shown that the frames infringed the Soans patent. The servicing of the frames, by keeping them in good repair, not only aided in the use of the frames themselves, but in the use of the index strips which they were especially designed to hold, and it follows, in our opinion, that the defendant contributed to the infringement of all the patents which the use of the articles in Maryland necessarily involved.

The defendant relies in this connection on the decision in Gillette Safety Razor Co. v. Standard Razor Corp. (C. C. A.) 64 F.(2d) 6, where the rule was applied that it is not infringement to replace in a patented combination unpatented components which wear out with relative quickness. That rule, however, has no relevancy to the case of one who, having furnished an infringing device, contributes to its use by keeping it in condition so that it may more efficiently serve the user.

The two Powell patents, Nos. 1,594,112 and 1,683,207, relate to flexible index strips adapted to be used in a panel or frame. The latter structure is more fully described hereafter in the discussion of the Soans patent. The first Powell patent, No. 1,594,112, discloses a plurality of strips joined together at their edges so as to make a continuous sheet which may be placed in a typewriter to have the desired information printed thereon, and which may then be separated into individual strips for mounting upon the panel or frame. The strips in continuous sheet form are composed of a ply of thin wood veneer, to each side of which is secured a sheet of paper, and the whole is transversely scored by lines separated from one another by the width of an individual strip. The scoring runs the full width of the sheet, and extends entirely through the top facing sheet of paper and the wood veneer, leaving the backing sheet intact. The sheet can be used in a typewriting machine and written upon like an ordinary sheet of paper, because the material can be curved about the platen of the machine and the desired record can be written upon each strip while it lies in firm contact with the platen. Thereafter the sheet may be separated along the scored lines into individual index strips or into groups of strips at any time when it may be desirable to do so. Index equipment of this kind is customarily inserted in a frame or panel by extending the ends of the strips under marginal flanges on the panels, and the panels are mounted on rotary standards so that the panels can be turned over like the leaves of a book and the indexed information made readily available.

Claims 1 and 6 of this patent, which are involved in this suit, are as follows:

"1. Flexible index strips in continuous sheet form, comprising wood veneer faced and backed with paper and partially scored in the direction of their depth, thus permitting subsequent separation into individual resilient index strips."

"6. Flexible index strips in continuous sheet form, comprising a thin body portion of wood faced and backed with paper and scored through one paper surface and through the wood surface, leaving the paper upon the opposite surface intact, thus permitting subsequent separation into individual resilient index strips."

It is contended by the defendant that the Powell patents are invalid because long before the date of invention index...