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SAN SHOE TRADING CORP. v. CONVERSE INC.

October 27, 1986

SAN SHOE TRADING CORP., Plaintiff,
v.
CONVERSE INC., Defendant



The opinion of the court was delivered by: CARTER

CARTER, District Judge

Defendant Converse, Inc. ("Converse") moves to dismiss this patent infringement action for improper venue or, in the alternative, to transfer this case to what it considers to be the more convenient forum of the District of Massachusetts.

 BACKGROUND

 This case is about a patent governing a special type of pocket that can be affixed to the side of a shoe. The patent belongs to plaintiff San Shoe Trading Corporation ("San Shoe"). It is entitled, "Means for Displaying a Picture or the Like in a Shoe," U.S. Letters Patent. 4,516,337.

 On August 22, 1985, San Shoe brought this action alleging that Converse had infringed its patent. On October 7, 1985, Converse served an amended answer. In that pleading, Converse denied infringement, asserted that San Shoe's patent is invalid, and brought counterclaims alleging that San Shoe interfered with its contractual relations, committed libel, and violated a Massachusetts unfair competition statute, Mass. Gen. Laws. ch. 93A, as well as the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.

 The facts relevant to the motions before the court are quite simple. San Shoe is incorporated in New York, where all but two of its American employees and all the documents relevant to this litigation are located. San Shoe's only tie that extends outside this district is to the man who invented the patented device. He lives in California. Flaherty Affidavit at PP2-7.

 Converse is incorporated in Massachusetts, where it has its principal place of business, and where all the employees and all the documents relevant to this litigation are located. Green Affidavit at PP2, 13, 14. Also in Massachusetts is the former Converse employee who Converse claims invented the allegedly infringing device. He now works for a competitor. Id. at PP15-18. From August, 1983 until at least July of 1985, Converse operated a showroom in the Southern District of New York from which it solicited sales of the allegedly infringing goods. Id. at P4. The showroom accounted for $100,000 in annual sales, out of over $200 million in sales Converse made nationwide. Id. at P8. All sales made in the showroom were only finalized after acceptance at Converse headquarters in Massachusetts. Id. at P11.

 I. VENUE

 Venue in patent infringement actions is governed exclusively by 28 U.S.C 1400(b). Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 229, 1 L. Ed. 2d 786, 77 S. Ct. 787 (1957). That statute 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 the purposes of § 1400(b), the defendant's residence is the state in which it is incorporated. Fourco Glass Co. v. Transmirra Products Corp., supra, 353 U.S. at 226. Since Converse is incorporated in Massachusetts, to establish venue in this district San Shoe must show that Converse both "has committed acts of infringement" and "has a regular place of business" here. Ipco Hospital Supply Corp. v. Les Fils D'Auguste Maillefer, 446 F. Supp. 206, 208 (S.D.N.Y. 1978) (Pollack, J.) (citing cases). San Shoe has the burden of proof on these issues. Id. at 207.

 Converse resists venue in this district on three grounds. First, it argues that venue is barred because it closed its only New York facility, a showroom, before San Shoe filed suit. Next it asserts that the volume of sales it made from that showroom was too small, when compared to its sales nationwide, to create venue. Finally, Converse urges the court to revive the "completed acts doctrine," under which a company like Converse that only accepts sales in its home office may only be sued in its home district.

 A. When Venue is Determined under § 1400(b)

 The first ground on which Converse contests venue is its contention that because it had moved out of the only office it occupied in this district more than a month before San Shoe filed its complaint, venue cannot lie here. Memorandum of Law at 3-4. San Shoe's response is that Converse's version of when it moved out of New York is inaccurate as a factual matter, and that the defendant's argument as to when venue is determined is wrong as a matter of law. *fn1" Memorandum in Opposition at 4-8. San Shoe's factual objections are not convincing, and in light of the burden it carries on these issues, the court will ...


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