Articles Posted in Patent Infringement

Indianapolis, Indiana — Endotach, LLC (“Endotach”) of Plano, Texas sued alleging that Cook Medical Incorporated (“Cook Medical”) of Bloomington, Indiana infringed two patents: Endovascular Bypass Graft, Patent No. 5,122,154, and Endovascular Stent with Secure Mounting Means, Patent No. 5,593,417, which have been issued by the U.S. Patent Office.

The patents, both of which were issued in the 1990s, were granted to Dr. Valentine Rhodes, an award-winning surgeon who practiced in the field of vascular medicine for over 30 years.  The patents are directed to intraluminal and endovascular grafts for placement within a blood vessel, duct or lumen to hold it open.  As it pertains to this lawsuit, the patents-in-suit are used for revascularization of aneurysms or stenosis occurring in blood vessels which includes anchoring projections to aid in securing the graft in place within the blood vessel.

Upon the death of Dr. Rhodes, the patents-in-suit passed as part of his estate to his wife, Brenda Rhodes.  While Mrs. Rhodes remains the owner of the patents, Endotach asserts that it is the exclusive licensee and has the right to enforce the patents against all infringers. 

In its complaint, patent attorneys for Endotach asserted infringement of one or more claims in each of the patents-in-suit.  It seeks a judgment that the patents-in-suit have been infringed, either literally and/or under the doctrine of equivalents; damages, including treble damages; costs; interest; attorneys’ fees and an injunction.

Practice Tip:

This complaint was filed to err on the side of caution.  A previous matter, Endotach LLC v. Cook Medical Incorporated, Civil Action No. 1:12-cv-01630-LJM-DKL, which was initiated by a complaint making similar allegations, is currently pending before the same court.  However, in that matter, Cook Medical has challenged the sufficiency of the transfer of the exclusive license to Endotach and, thus, Endotach’s standing to bring that prior lawsuit.  Pursuant to that allegation, Cook Medical asserted that the matter should be dismissed.  That motion is still pending.

Endotach entered into a subsequent agreement that purports to remedy any deficiencies related to standing.  It then filed this current complaint.  It has indicated its intention to consolidate this later-filed action with the matter currently before the court.

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South Bend, Indiana — Lippert Components Manufacturing, Inc. (“Lippert”) of Goshen, Indiana sued AL-KO Kober, LLC (“AL-KO”) of Elkhart, Indiana alleging patent infringement of three patented inventions: Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Means for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,235,455 (the “‘455 Patent”); Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Mechanism for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,240,744  (the “‘744 Patent”); and Retractable Room Actuation Assembly for Recreational Vehicle, Patent No. RE44,002  (the “‘002 Patent”); which have been issued by the U.S. Patent Office.

Lippert claims ownership of the three patents-in-suit, which related to a retractable room assembly used in extending and retracting slide-out compartments for recreational vehicles.  The patents were granted in 2012 and 2013.

AL-KO is accused of having made, used, offered for sale and/or sold its retractable room actuation assembly for use in extending/retracting recreational vehicle slide-out compartments.  Lippert notified AL-KO of Lippert’s ‘002 Patent, ‘455 Patent and ‘744 Patent and claimed infringement of those patents in a letter dated June 28, 2013 and received by AL-KO on July 1, 2013.

Patent attorneys for Lippert sued AL-KO on July 11, 2013 claiming patent infringement by AL-KO.  The complaint also asserts that AL-KO has induced and contributed to others’ use of the patents-in-suit, including at least Augusta RV, by selling to them and instructing them to use Lippert’s intellectual property.

The complaint lists the following:

·         Count I: ‘002 Patent Infringement

·         Count II: ‘455 Patent Infringement

·         Count III: ‘744 Patent Infringement

Lippert also contends that AL-KO has engaged in its conduct willfully and in complete disregard of, or with indifference to, Lippert’s rights and interests.  It asks the court to consider this an “exceptional case” as that term is defined in 35 U.S.C. §285.

Lippert, via its patent attorneys, asks for an injunction; for an accounting; for damages, up to treble the amount of actual damages; for attorneys’ fees and costs; and that the court require AL-KO to notify AL-KO’s customers of AL-KO’s unlawful acts.

Practice Tip: While the exact contents of the letter to AL-KO are unclear from the complaint, a company that receives a notification letter alleging infringement is well advised to contact intellectual-property counsel promptly.  The receipt of such a letter may constitute a legally significant event which triggers a duty by the recipient to take action, such as investigate whether any of the infringement claims in the letter have merit.  If the letter threatens legal action, the alleged infringer should consider initiating a suit under the Declaratory Judgment Act.  Declaratory judgment actions are frequently filed in intellectual-property matters, especially patent litigation.  Such a suit allows the potential defendant not only to choose its own forum, to the extent that the forum is consistent with jurisdictional restrictions, but also to remove an ever-present cloud of potential litigation and potential damages for patent infringement that may be continuing to accrue.

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Indianapolis, Indiana — CarCheckup, LLC of Carmel, Indiana has sued CarMD.com Corp. (“CarMD”) and Innova Electronics Corp. (“Innova”), both of Irvine, California, for infringing two patents, Patent Nos. 6,807,469 (the “‘469 Patent) and 6,925,368 (the “‘368 Patent) both titled “Auto Diagnostic Method and Device,” which have been issued by the U.S. Patent Office.

CarCheckup sells a device designed to improve teen-driver safety, track business mileage and explain the check-engine light in vehicles compliant with on-board diagnostic II (also known as “OBD-II”) technology. 

Thumbnail image for logo_small.pngCarMD sells a “Handheld Device and Software Solution Kit,” along with “Vehicle Health System” products.  The CarMD Vehicle Health System is a consumer product designed to enable car owners to monitor a vehicle’s function, to catch hidden problems and to diagnose dashboard warning lights.  CarMD’s products work on newer-model vehicles with on-board diagnostic technology by retrieving diagnostic codes from the vehicle’s computer.  By using a CarMD code reader, a car owner, even one unsophisticated in car repair, can identify the problem(s) with his or her vehicle.

CarMD sells its products directly to consumers via infomercials, on its website at www.CarMD.com, through the Home Shopping Network and on www.Amazon.com.  Its products are also sold at various retail outlets, including Pep Boys.  Innova, an allegedly related enterprise, sells two different code readers in the United States and maintains web sites at www.CodeReader.com and www.Innova.com

Patent attorneys for CarCheckup sued CarMD and Innova, asserting a right to relief against them jointly, for infringing the ‘469 and ‘368 Patents, which are owned by CarCheckup.  CarCheckup alleges that, as part of a joint endeavor, CarMD sells and offers for sale infringing CarMD products, while Innova distributes and manufactures the products.  CarCheckup alleges that one or both of the Defendants has known about the patents-in-suit since at least as early as December 2012. 

The complaint lists the following claims:

·         Count I: Infringement of the ‘469 Patent against CarMD and Innova

·         Count II: Infringement of the ‘368 Patent against CarMD and Innova

CarCheckup asks the court for a judgment against CarMD and Innova; for a finding that the infringement has been willful and deliberate; for an award of damages adequate to compensate CarCheckup for the infringement it alleges, but in no event less than a reasonable royalty; for treble damages; for an injunction; and for a finding that this is an exceptional case and, thus, for an award of reasonable attorneys’ fees and costs.

Practice Tip: The law of the “reasonable royalty” has been in transition recently.  The “25% rule,” an approach that allocated 25% of the profits from an infringement to the patentee and the remaining 75% to the infringer, has been abandoned.  Long used in federal courts to establish a reasonable royalty as compensation for patent infringement under § 284 of the Patent Act, it was rejected by the Federal Circuit in 2011.  In its ruling in Uniloc v. Microsoft, the court held: “the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation.  Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.”

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Lafayette, Indiana — Diamond Back Gutter Covers, Inc. (“Diamond Back”) of Lafayette, Indiana and Daniel E. Feldhaus (“Feldhaus”) of Monticello, Indiana sued Midwest Enterprises of Saint Clair, Missouri alleging infringement of its “Gutter Debris Cover,” Patent No. 7,627,991, (the “‘991 Patent”) which has been issued by the U.S. Patent Office.

Diamond Back manufactures and sells products related to the protection of gutter and drainage systems.  Diamond Back states that Midwest Enterprises is in a similar business and also does business under the name E-Z Products. 

A complaint against Midwest Enterprises was filed by patent attorneys for Diamond Back.  It focuses on Midwest Enterprises’ EZ Double Lock gutter protectors, which Diamond Back asserts infringe upon the ‘991 Patent.  That patent, for a Gutter Debris Cover, was issued to Feldhaus in December 2009; Diamond Back is licensed to use the patent. 

Specifically, the complaint asserts that Midwest Enterprises has been and still is infringing the ‘991 Patent by making, selling and/or using a gutter-protection system embodying one or more of the patented inventions or by inducing others to infringe the ‘991 Patent.

In June 2012, correspondence to Midwest Enterprises alerted them that Diamond Back believed that they were infringing.  Diamond Back claims that Midwest Enterprises’ actions which continued after having received notice, constitute willful conduct in disregard of its rights in the ‘991 Patent.

Diamond Back asserts that this is an exceptional case as defined by 35 U.S.C. 285.  It is asking the court for an injunction; for the destruction of infringing goods; for the destruction of items relating to the making and marketing such goods; for corrective advertising; for damages, including treble damages; and for attorneys’ fees.

Practice Tip: If a court finds that a patent has been infringed upon, it may then consider the additional issue of whether the infringement was willful.  Infringing behavior that continued despite an allegation of infringement can support such a finding.  The determination that an infringement was “willful” can, in turn, increase damages significantly.

 

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Indianapolis, Ind. — Patent lawyers for Eli Lilly & Co. of Indianapolis, Ind. (“Lilly”), Eli Lilly Lilly2.JPGExport S.A., of Vernier/Geneva, Switzerland (a wholly owned subsidiary of Eli Lilly & Co.) and Acrux DDS Pty Ltd. of West Melbourne, Victoria, Australia (“Acrux”) filed a patent infringement suit alleging that Perrigo Company of Allegan, Mich. (“Perrigo Company”) and Perrigo Israel Pharmaceuticals Ltd. of Bnei Brak, Israel (“Perrigo Israel,” a wholly owned subsidiary of Perrigo Company), infringed Patent Nos. 8,435,944; 8,419,307; and 8,177,449, filed with the U.S. Patent Office.

ACRUX-Logo.JPGLilly is engaged in the business of research, development, manufacture and sale of pharmaceutical products.  Acrux is engaged in the development and commercialization of pharmaceutical products for sale.  Both sell their products worldwide. 

Perrigo Company and Perrigo Israel (collectively, “Perrigo”) are pharmaceutical companies that develop, manufacture, market and distribute generic pharmaceutical products for sale throughout the United States.  These products include pharmaceuticals, infant formulas, nutritional products, dietary supplements and active pharmaceutical ingredients.  Perrigo’s consumer-healthcare segment includes over 2,100 store-brand products which are marketed to major national chains such as Wal-Mart, CVS, Walgreens, Sam’s Club and Costco.  They also sell to major drug wholesalers.

Lilly is the holder of approved New Drug Application No. 022504 for the manufacture and sale of a transdermal testosterone solution made at a concentration of 30 mg/1.5L, which is marketed by Lilly under the trade name “Axiron.”  Axiron is a pharmaceutical drug which raises the amount of testosterone in a patient’s body.  Recent sales of Axiron are estimated to be $229 million annually, according to Symphony Health Solutions.  Axiron is subject to Patent Nos. 8,435,944, 8,419,307, 8,177,449 (the “‘944 patent,” the “‘307 patent,” and the “‘449” patent, respectively).  All three patents have been licensed to Lilly.

Perrigo announced on May 29, 2013 that it had filed an Abbreviated New Drug Application (“ANDA”) with the U.S. Food and Drug Administration (“FDA”) for approval of a generic version of Axiron.  Prior to filing the ANDA, No. 204255, Perrigo sent a letter to Lilly to inform Lilly that “in Perrigo’s opinion and to the best of its knowledge, the ‘449 patent is invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use, sale, or importation of the drug product described in Perrigo’s ANDA.”  Perrigo sent similar letters regarding the ‘307 and ‘944 patents.

After receiving the letter, Lilly filed suit alleging infringement of the three patents.  It states in its complaint that the ‘944 patent claims, inter alia, methods of increasing the testosterone blood level of an adult male by applying a transdermal drug-delivery composition that contains testosterone.  The ‘307 patent includes in its claims a method of increasing the level of testosterone in the blood by applying a liquid pharmaceutical that contains testosterone.  The claims for the ‘449 patent include a method of transdermal administration of a physiologically active agent.  All three patents are used in connection with Axiron. 

Lilly’s complaint lists the following claims:

·         Count I for Patent Infringement (Direct Infringement of U.S. Patent No. 8,435,944)

·         Count II for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,435,944)

·         Count III for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,435,944)

·         Count IV for Patent Infringement (Direct Infringement of U.S. Patent No. 8,419,307)

·         Count V for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,419,307)

·         Count VI for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,419,307)

·         Count VII for Patent Infringement (Direct Infringement of U.S. Patent No. 8,177,449)

·         Count VIII for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,177,449)

·         Count IX for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,177,449)

·         Count X for Declaratory Judgment (Infringement of U.S. Patent No. 8,435,944)

·         Count XI for Declaratory Judgment (Infringement of U.S. Patent No. 8,419,307)

·         Count XII for Declaratory Judgment (Infringement of U.S. Patent No. 8,177,449)

Lilly’s lawsuit asks for an injunction to stop Perrigo from producing the generic version of Axiron until the expiration of Lilly’s three patents-in-suit.  In addition, Lilly asks that the court declare the three patents to be valid and enforceable; that Perrigo infringed upon all three by, inter alia, submitting ANDA No. 204255 to obtain approval to commercially manufacture, use, offer for sale, sell or import its generic version of the drug into the United States; that Perrigo’s threatened acts constitute infringement of the three patents; that FDA approval of Perrigo’s generic drug be effective no sooner than the expiration date of the patent that expires last; that this is an exceptional case; and for costs and attorneys’ fees.

Practice Tip: The FDA’s ANDA process for generic drugs has been abbreviated such that, in general, the generic drug seeking approval does not require pre-clinical (animal and in vitro) testing.  Instead, the process focuses on establishing that the product is bioequivalent to the “innovator” drug that has already undergone the full approval process.  The statute that created the abbreviated process, however, had also created some interesting issues with respect to the period of exclusivity.  For an interesting look at some of these issues, see here
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Litigation by patent-assertion entities (“PAEs,” commonly known as “patent trolls”) has skyrocketed in the last two years.  A chart released by the White House in a June 2013 report entitled “Patent Assertion and U.S. Innovation” demonstrates that such trolls now file over 60% of all patent-infringement lawsuits.  (The red portion of the bars shows patent lawsuits brought by PAEs.)

Patent-Trolls-Chart.jpgThe patent-trolling business model includes no productive operations.  Instead, investors’ money is used to purchase patents for the sole purpose of alleging infringement and extracting payment under the threat of litigation.  Because litigation can be very costly, the patent trolls’ targets face a difficult decision: settle (typically by buying a license from the troll) or pay significant litigation expenses — and face the potential of losing at trial, which is somewhat unlikely but where damages can be enormous.  In contrast, the trolls often use contingency-fee attorneys and, thus, have little more at stake in any given lawsuit than a few hundred dollars for a court-filing fee.

Many view this type of litigation with suspicion, if not outright derision.  At least four patent-reform bills are pending in Congress and the Obama Administration recently released a harsh indictment detailing the damage to innovation and the economy caused by the “abusive practices in litigation” committed by patent trolls.  Various measures to curb frivolous patent litigation have been suggested, including increasing transparency of patent ownership and establishing a website through the U.S. Patent and Trademark Office to inform patent-troll victims of their rights. 

Evansville, Ind. — CordaRoy’s Originals, Inc. of Gainesville, Fla. (“CordaRoy’s”) Corda-Roys-Logo.JPGhas sued The Lovesac Corporation of Stamford, Conn. (“Lovesac”) alleging infringement of Patent No. 7,131,157, “Bag Bed Assembly,” (the “‘157 Patent”) which has been issued by the U.S. Patent Office.

Patent lawyers for CordaRoy’s filed a patent infringement suit alleging that Lovesac has been and continues to infringe on CordaRoy’s ‘157 Patent for a bag-bed assembly by using, selling, offering to sell, and/or importing a “knock-off” bag-bed assembly which embodies the patented invention.  It is also alleged that Lovesac has induced others to do likewise.  CordaRoy’s asserts that the claimed infringement has been, and continues to be, intentional, willful and deliberate. 

LoveSacLogo.JPGIn its complaint, CordaRoy’s asks for a judgment that the ‘157 Patent has been infringed; that Lovesac be required to account for all of its profits and advantages realized from the alleged infringement of the ‘157 Patent; for an award of lost profits and a reasonable royalty; for an award of treble damages upon a finding of willful, intentional, and deliberate infringement; for an injunction against further actions of infringement; for pre-judgment interest; and for costs and attorney’s fees.

A jury trial has been demanded.

Practice Tip: If a court finds that a patent has been infringed upon, it may then consider the additional issue of whether the infringement was willful.  Infringing behavior that continued despite an allegation of infringement can support such a finding.  The determination that an infringement was “willful” can, in turn, increase damages significantly.

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South Bend, Ind. – Patent lawyers for Automated Products International, LLC (“API”) of LaGrange, Ind. sued alleging that Norco Industries, Inc. (“Norco”) of Elkhart, Ind. infringed NorcoLogo.JPGPatent No. 7,134,711 (the “‘711 Patent”) which has been issued by the U.S. Patent Office

The ‘711 Patent is directed to recreational-vehicle roof-support rafters.  API alleges that Norco has been and is currently infringing the patent.  API also asserts that through continuous marking of its products, it has provided “constructive notice of [Norco’s] infringement.”

API seeks a judgment declaring that Norco has infringed the ‘711 Patent; damages equal to at least a reasonable royalty; treble damages upon a finding of willful and deliberate infringement; attorneys’ fees upon a finding that the case is exceptional; and an injunction.

Practice Tip:  The law of the “reasonable royalty” has been in transition recently.  The “25% rule,” an approach that allocated 25% of the profits from an infringement to the patentee and the remaining 75% to the infringer, has been abandoned.  Long used in federal courts to establish a reasonable royalty as compensation for patent infringement under § 284 of the Patent Act, it was rejected by the Federal Circuit in 2011.  In its ruling in Uniloc v. Microsoft, the court held: “the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation.  Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.”
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Washington D.C. — The U.S. Supreme Court has ruled that “patent exhaustion” does not bar an infringement claim against Indiana farmer Vernon Bowman for reproducing patented seeds by planting and harvesting second generation seeds without the patent holder’s permission. MonsantoLogo.JPG Bowman v. Monsanto Co., U.S., No 11-796, 5/13/2013.  Monsanto produces and sells patented soybean seed that is genetically altered to resist its “RoundUp” herbicide. Bowman is a farmer who purchased soybean for planting from a grain elevator, expecting that most of the grain elevator soybean would be Monsanto’s herbicide-resistant soybean. In the subsequent patent infringement brought by Monsanto, Bowman argued that Monsanto’s sale of its seed that he ultimately purchased from the grain elevator exhausted any patent rights in the seed. The argument was rejected by both the District Court and the Federal Circuit, and the Supreme Court agreed to review the case.

Patent Exhaustion Only for Sold Article

Under the patent exhaustion doctrine, an authorized sale of a patented product cuts off the patent owner’s right to control of that product, because the sale of that product fulfills the patent law by providing a reward to the patentee.  However, this limitation on patent rights applies only to the particular article sold.  If the purchaser could make and sell endless copies, the patent would effectively protect just a single sale.

In this case, the patent exhaustion doctrine provides Bowman with the right to use the purchased product in several different ways without Monsanto’s permission, including resale, human consumption or animal consumption of the product. However, it does not permit Bowman to make additional patented soybeans without Monsanto’s permission.

Bowman contended that his use of the purchased seed was covered by the patent exhaustion doctrine because that is the normal way farmers use seed, and that Monsanto seeks an impermissible exception to the exhaustion doctrine for patented seeds and other self-replicating technologies.

The Court rejected the argument, pointing out that it is Bowman who seeks an unprecedented exception to the well-settled rule that the exhaustion doctrine does not extend to the right to make a new product.

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Washington, D.C. — The United States Court of Appeals for the Federal Circuit denied the petition of ArcelorMittal for a rehearing in its patent infringement lawsuit against AK Steel involving ULTRALUME®.

AK Steel produces flat-rolled carbon and stainless and electrical steels.  Their products are primarily for automotive, infrastructure, manufacturing, construction, and electricity-generation and distribution markets. The company, headquartered in West Chester, Ohio, also employs people in Indiana, Pennsylvania, and Kentucky.

ArcelorMittal is a multinational steel manufacturing corporation headquartered in Avenue de la Liberté, Luxembourg. It is the world’s largest steel producer, with an annual crude steel production of 97.2 million tons as of 2011.

At issue in this suit was a claim of patent infringement by ArcelorMittal France and ArcelorMittal Atlantique et Lorraine (collectively “ArcelorMittal”) against AK Steel et al. of Patent No. 6,296,805, entitled “Coated hot- and cold-rolled steel sheet comprising a very high resistance after thermal treatment,” (“the ‘805 patent”) which has been issued by the U.S. Patent Office

The ‘805 patent covers boron steel sheeting with an aluminum-based coating applied after rolling the sheet to its final thickness. The steel is used for “hot-stamping,” a process which involves rapidly heating the steel, stamping it into parts of the desired shape, and then rapidly cooling them.  The rapid heating and cooling alters the crystalline structure of the steel, converting it to austenite and then martensite.  By altering the steel’s microstructure in this manner, hot-stamping produces particularly strong steel.  Because hot-stamped steel is so strong, parts created using the process can be thinner and lighter than steel parts produced with other methods while being just as strong.

ArcelorMittal sued AK Steel and two other steel producers in the United States District Court for the District of Delaware, alleging infringement of the ‘805 patent.  In 2011, a jury found that defendants AK Steel, Severstal Dearborn, Inc., and Wheeling-Nisshin Inc. had not infringed ArcelorMittal’s patent and that the asserted claims were invalid as anticipated and obvious.

ArcelorMittal appealed from the judgment of the trial court, challenging both the district court’s claim construction and the jury’s verdict.

The federal circuit upheld the district court’s claim construction in part and reversed it in part. It also reversed the jury’s verdict of anticipation.  With respect to obviousness, a new trial was required because a claim-construction error by the district court prevented the jury from properly considering ArcelorMittal’s evidence of commercial success.

Despite the mixed results – partially affirming, partially reversing, partially vacating and remanding for a new trial – the decision of the federal circuit has confirmed that AK Steel did not infringe Arcelor’s patent and can sell Ultralume, its aluminized boron steel product.

Practice Tip: Patent decisions of the Federal Circuit, a federal appellate court, are unique in that they are binding precedent throughout the United States.  Decisions of the Federal Circuit can be superseded only by decisions of the U.S. Supreme Court or by legislation.  As such, Federal Circuit decisions are often the final word nationwide on the issues of patent law that the court decides.  In contrast, the authority of other federal appellate courts is restricted by geographic location.  In those courts, the federal common law often varies among the circuits (a “circuit split”). 

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