United States Envelope Co. v. Transo Paper Co.

• Decision Date: 15 February 1916
• Docket Number: 1748.
• Citation: 229 F. 576
• Parties: UNITED STATES ENVELOPE CO. et al. v. TRANSO PAPER CO. et al.
• Court: U.S. District Court — District of Connecticut

229 F. 576

UNITED STATES ENVELOPE CO. et al. v. TRANSO PAPER CO. et al.

No. 1748.

United States District Court, D. Connecticut.

February 15, 1916

Robert H. Parkinson, of Chicago, Ill., and Louis W. Southgate, of Worcester, Mass., for plaintiffs.

Thomas A. Banning, of Chicago, Ill., Arthur L. Shipman, of Hartford Conn., John P. Bartlett, of New York City, and Samuel Adams of Chicago, Ill., for defendant Transo Paper Co.

THOMAS District Judge.

This is a motion on the part of the defendant Transo Paper Company, a nonresident corporation, to have the court set aside and vacate, as to it, the interlocutory decree and reference to the master entered in this cause on or about December 29 1913, and all orders entered in this cause since the filing of the bill of complaint herein, and to dismiss the bill as to this defendant for want of jurisdiction.

This motion involves two questions: (1) Whether the defendant corporation had any regular and established place of business in this district, and, if it had, whether it had committed any acts of infringement, either by manufacture or use, in this district; and (2) whether the fact that, after Judge Mayer had overruled its plea to the jurisdiction and held that the defendant corporation did have such regular and established place of business, and had by use infringed the patent in suit in this district, the defendant corporation by its answer, and by submitting to the interlocutory judgment referring the case to a master and filing exceptions to the master's report, had waived the question of jurisdiction so as to now not permit its being raised.

I. The first question to be determined is whether the defendant, being a nonresident corporation, was doing business in this district in such a manner and to such an extent as to warrant the inference that it was present here through its agent. If it was, it is liable to service in this district, providing that it has manufactured or used the alleged infringing article here; and, if it has not, such service cannot be made here, for it is a sine qua non of liability to service in a suit for infringement of a patent that a nonresident corporation shall have 'a regular and established place of business ' in the district where the suit is brought. Act of March 3, 1897, c. 395, 29 Stat. 695; Judicial Code, Sec. 48.

In Green v. Chicago, Burlington & Quincy Ry., 205 U.S. 530, 533, 27 Sup.Ct. 595, 596 (51 L.Ed. 916) where the question of jurisdiction was made to depend upon the diverse citizenship of the parties, it was held that a railroad company, which had no tracks within the district, was not in business therein, in the sense of liability to service, because it hired an office and employed an agent for the merely incidental purpose of solicitation of freight and passenger traffic.

'The business shown in this case was in substance nothing more than that of solicitation. Without undertaking to formulate any general rule defining what transactions will constitute 'doing business,' in the sense that liability to service is incurred, we think that this is not enough to bring the defendant within the district, so that process can be served upon it. This view accords with several decisions in the lower federal courts. Maxwell v. Atchison, etc., Railroad (C.C.) 34 F. 286; Fairbank & Co. v. Cincinnati, etc., Railroad, 54 F. 420 (4 C.C.A. 403, 38 L.R.A. 271); Union Associated Press v. Times Star Co. (C.C.) 84 F. 419; Earle v. Chesapeake, etc., Railroad (C.C.) 127 F. 235.'

In Tyler v. Ludlow-Saylor Wire Co., 236 U.S. 723, 35 Sup.Ct. 458, 59 L.Ed. 808, the Supreme Court, in disposing of a question involving substantially the same facts as are here presented, referred to its opinion in Green v. Chicago, Burlington & Quincy Ry., supra, as defining the words 'regular and established place of business,' and held that paying an agent, who was also employed by another corporation, to solicit orders to be executed at its home office, and sharing expenses with such other corporation of an office in the district in which suit for infringement of a patent is brought, did not give the court jurisdiction of a suit against a nonresident corporation for infringement of a patent.

And it follows that if the defendant does not have 'a regular and established place of business' in this district the court is without jurisdiction, and the fact that the defendant's agent may have used in this district in the course of his business infringing envelopes, and the question whether the agency in question was to solicit orders and forward them to the home office for execution, as in Tyler v. Ludlow-Saylor Wire Co., supra, and Westinghouse Electric & Mfg. Co. v. Stanley Electric Mfg. Co (C.C.) 116 F. 641, or whether the agency was carried on with a power to complete a contract in this district binding on the defendant, as in Chicago Pneumatic Tool Co. v....