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KELLER v. AMERICAN SALES BOOK CO.

September 1, 1936

KELLER
v.
AMERICAN SALES BOOK CO., Limited



The opinion of the court was delivered by: KNIGHT

KNIGHT, District Judge.

This is a suit in equity for infringement of a patent. Defendant is a foreign corporation, organized under the laws of the Dominion of Canada. It heretofore filed its certificate with the secretary of state of New York to do business as a foreign corporation in that state. It continued in operation of such business for several years thereafter, when it filed a certificate of surrender of authority to do business there, and, by the terms of this surrender certificate, specifically consented that process against it in an action for liability incurred before filing of such certificate of surrender might be served upon the secretary of state of the state of New York, and designated a post office address to which a copy of any process might be mailed to the defendant.

While it is urged that the complaint in this suit is insufficient to show liability incurred prior to the filing of the certificate of surrender, this contention is without controlling force, because it does appear that the complaint sets forth a certain extent of liability incurred prior to such filing. Such being the fact, the question of whether the complaint contains certain other allegations arising from liabilities created since the filing is a matter which has no relevancy to this motion.

 The motion herein as originally made was for an order setting aside service of the subpoena herein and for dismissal of the complaint on the ground that, at the time of the filing of the complaint, the defendant was not an inhabitant of the Western District of New York; had not then, and has not now, any regularly established place of business in said District. Upon the argument and in its reply memorandum, defendant raises a second question and that is that the service of the process herein, which was made in the Northern District of New York, was invalid and not effective to bring the defendant corporation within the jurisdiction of this court. Since this latter question goes to the question of jurisdiction, it may be raised at any time hereafter, and so may well be decided now.

 The motion first presents the question as to whether the consent filed pursuant to the statute of the state of New York confers upon this court jurisdiction of a foreign corporation by a service of process as therein provided.

 Section 48 of the Judicial Code (section 109, 28 U.S.C.A.) provides that in suits for infringement of letters patent the District Court "shall have jurisdiction, in law or in equity, in the district of which the defendant is an inhabitant, or in any district in which the defendant, whether a person, partnership, or corporation, shall have committed acts of infringement and have a regular and established place of business." It is clear from the language of the section and from numerous authorities that section 48, supra, has no application to a foreign (alien) corporation which has no place of business within the District.

 Walker on Patents (6th Edition) § 439; Sandusky Foundry & Machine Co. v. DeLavaud (D.C.) 251 F. 631, 632; United Shoe Machinery Co. v. Duplessis Independent Shoe Machinery Co. Ltd. et al. (C.C.) 133 F. 930, 933; In re Hohorst, 150 U.S. 653, 14 S. Ct. 221, 225, 37 L. Ed. 1211. These authorities refer to the party to be sued as an "alien." In Amdur on Patent Law and Practice, p. 116, it is said: "Section 48 does not apply to aliens, who may be sued in any district where served." The word "alien" as used in these authorities applies to a foreign corporation. Barrow Steamship Co. v. Kane, 170 U.S. 100, 18 S. Ct. 526, 43 L. Ed. 964; In re Hohorst, supra.

 The General Corporation Law of New York (Consol.Laws N.Y. c. 23) § 210 et seq. provides for the granting of authority to a foreign corporation to do business in that state. It also provides that such corporation may surrender its certificate of such authority by filing a specified certificate with the Department of State and that such certificate shall contain the provision, "That it consents that process against it in an action or proceeding upon any liability or obligation incurred within this state before the filing of the certificate of surrender of authority, after the filing thereof, may be served upon the secretary of state." Section 216.

 It is claimed by the defendant that this statutory provision of the state does not give jurisdiction through service of process as therein provided, in an action either in law or equity in this court. It is specially urged that such jurisdiction cannot be obtained in equity, because the Conformity Act (28 U.S.C.A. § 724) is not applicable.

 It is my opinion that a foreign corporation, such as the defendant, which has left the state, ceased doing business in the state and designated an officer on whom service of process might be served may be brought within the jurisdiction of the court by service of process on the agent designated under the state law.

 In United Shoe Machinery Co. v. Duplessis Independent Shoe Mach. Co., supra, one of the defendants was an alien and a resident of the Province of Quebec. It was alleged that he had committed acts of infringement within the United States. He was served with process within the District. After discussing the Act of 1897, which is the present section 48, supra, it was said: "Under the well-recognized rules of construction, we must decide that there does not appear to have been any intention on the part of Congress to change the settled law, or to make the law apply to suits brought against an alien for the infringement of a patent." This case held that an alien could be sued in any District in which he was found.

 In Sandusky Foundry & Machine Co. v. DeLavaud et al., defendants, the individual defendants moved to dismiss on the ground that they were not inhabitants of the District, that they did not infringe, and that they had no established place of business therein. It was there said: "It seems to be settled law that they are not inhabitants of any district, and may be sued in any district within which process can be served on them."

 In Re Hohorst, supra, it was said: "Upon deliberate advisement, and for the reasons above stated, we are of opinion that the provision of the existing statute [section 48 (28 U.S.C.A. § 109)] * * * is inapplicable to an alien or a foreign corporation sued here, and especially in a suit for the infringement of a patent right; and that, consequently, such a person or corporation may be sued by a citizen of a state of the Union in any district in which valid service can be made upon the defendant."

 In Re Louisville Underwriters, 134 U.S. 488, 10 S. Ct. 587, 589, 33 L. Ed. 991, a libel in admiralty in personam had been filed, and it was said that "In the present case, the libellee had, * * * appointed an agent, * * * on whom legal process might be served. * * * This would have been a good service in an action at law in any court of the state or of the United States in Louisiana. * * * ...


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