SME Steel Contractors, Inc. v. Seismic Bracing Company, LLC, decided July 23, 2025

Court: United States Court of Appeals for the Federal Circuit Case Number: 2023-2426 Decided: July 23, 2025 Judge: DYK, Circuit Judge (Before DYK, CUNNINGHAM, Circuit Judges, and HALL, District Judge) Appeal From: United States District Court for the District of Utah, No. 2:17-cv-00702-RJS, Judge Robert J. Shelby. Disposition: Affirmed summary judgment for Seismic Bracing. This disposition is nonprecedential.

I. Executive Summary

This briefing outlines the Federal Circuit's decision affirming the District Court of Utah's grant of summary judgment in favor of Seismic Bracing Co., LLC and Andrew Hinchman ("Seismic Bracing") against SME Steel Contractors, Inc. and Core-Brace, LLC ("SME Steel"). SME Steel had brought claims of patent infringement, false advertising and false association under the Lanham Act, unfair competition and deceptive trade practices under Utah state law, and copyright infringement. The core of the appeal revolved around the district court's interpretation of the "air gap" in SME Steel's patent, the lack of demonstrated injury for Lanham Act claims, and the absence of a causal connection for copyright damages.

II. Background of the Dispute

SME Steel and Seismic Bracing are competitors in the sale of buckling-restrained braces (BRBs), which are structural support members designed to "minimize the impact of seismic forces" on buildings. Andrew Hinchman, founder of Seismic Bracing, was formerly SME Steel's chief engineer.

SME Steel holds U.S. Patent No. 7,174,680 (the "'680 patent") for BRBs that incorporate a steel core and a concrete-filled bracing element. A key feature of the '680 patent is an "air gap" that facilitates the independent movement and plastic deformation of the steel core from the bracing element, preventing bonding.

Seismic Bracing's BRBs use corrugated cardboard affixed to the steel core, separating the concrete from the steel. SME Steel alleged that Seismic Bracing's design infringed its '680 patent.

Beyond patent claims, SME Steel also asserted:

• Lanham Act claims: False advertising and false association, related to representations made in Seismic Bracing's 2017 Design Manual, including statements about BRB production capacity and patent testing.

• Utah State Law claims: Unfair competition (tied to patent infringement) and deceptive trade practices under the Utah Truth in Advertising Act (UTAA) (tied to Lanham Act claims).

• Copyright infringement claims: Alleging that Seismic Bracing used SME Steel's copyrighted technical drawings in its Design Manual.
  

The District Court granted summary judgment to Seismic Bracing on all appealed claims, concluding:

• No patent infringement due to the absence of the claimed "air gap" in Seismic Bracing's BRBs as construed by the court.

• SME Steel lacked standing for Lanham Act claims due to failure to prove proximate cause of injury, and even on the merits, failed to show causal connection or literal falsity/intent to deceive.

• No copyright damages were proven due to insufficient evidence of a causal connection between the alleged infringement and Seismic Bracing's profits.
  

III. Key Themes and Most Important Ideas/Facts

A. Patent Infringement (and related Utah Unfair Competition)

1. The '680 Patent and the "Air Gap":

2. The '680 patent describes BRBs with a steel core designed for "plastic deformation when subjected to seismic magnitude forces" and a bracing element that maintains structural integrity.

3. Crucially, the patent requires an "air gap" between the steel core and the bearing members within the concrete bracing element to "minimize the pressure exerted on the buckling restraining assembly during plastic deformation of the buckling restraining apparatus, allowing the core member to expand." ('680 patent, col. 2 ll. 48–52).

4. Independent claims of the '680 patent specify an "air gap" "formed between" or "positioned between" the core member and the bearing members. For example, Claim 1 states: "an air gap is formed between the core member and the bearing members."

5. Claim Construction of "Air Gap":

6. The district court construed "air gap" as "an empty or unfilled space or interval," and "positioned between" and "formed between" as "spans the distance between," the core member and bearing members.

7. SME Steel challenged this construction, arguing an air gap could be "formed between" or "positioned between" even if "it does not fill the entire space." (Appellants’ Br. 44–45).

8. Prosecution History and Foreclosure of SME Steel's Construction:

9. The Federal Circuit affirmed the district court's claim construction, citing the '680 patent's prosecution history. During prosecution, SME Steel amended its claims to recite an air gap after an examiner rejected claims as obvious over prior art (Takeuchi, which used an "adhesion-preventive film").

10. SME Steel "made clear that the claims do not cover an air gap spanning less than the entire transverse direction and do not permit other material in the transverse direction partitioning the air gap." (Opinion, p. 11). This amendment was critical to distinguish its invention from prior art that used a film, not an "empty" air gap.

11. No Infringement by Seismic Bracing:

12. Seismic Bracing's BRBs use "corrugated cardboard wrapped around the steel core member." (Opinion, p. 12).

13. SME Steel itself described the cardboard as having "a top layer, a bottom layer, an internal corrugated layer, and multiple air pockets between the top and bottom layer." (Appellants’ Br. 24).

14. The court found no evidence that Seismic Bracing's BRBs contain an "air gap that extends along the length of the steel core" as required by the '680 patent's proper construction and SME Steel's own concessions. Therefore, Seismic Bracing's use of cardboard does not infringe the patent.

15. The unfair competition claim under Utah Code § 13-5a-103 "rise or fall with the [c]ourt’s determination of the alleged patent infringement claims" (Appellants’ Br. 63–64) and thus also failed.
    

B. Lanham Act Claims (False Advertising and False Association)

1. Standing and Injury Requirement:

2. The district court found SME Steel lacked statutory standing due to a failure to show proximate cause of injury.

3. The Federal Circuit opted to affirm on the merits, noting that SME Steel failed to show "a genuine issue of material fact on the merits of its Lanham Act claims, particularly with respect to a showing of injury." (Opinion, p. 13).

4. For false advertising, a plaintiff "must prove a ‘causal connection’ between the defendant’s false advertising and the plaintiff’s injuries." (Opinion, p. 14, quoting Vitamins, 71 F.4th at 1238).

5. False Advertising - Causal Connection and Literal Falsity:

6. SME Steel failed to provide evidence that the Design Manual's alleged misrepresentations "played any role in SME Steel’s loss of bids." (Opinion, p. 15). Showing the manual was sent to customers and Seismic Bracing won bids while SME Steel lost them was insufficient without a causal link.

7. "Produce capacity of over 5000 BRBs per year": The court found "produce" ambiguous, referring to future capacity or overseeing production through third parties, thus precluding a finding of literal falsity. "A statement can be literally false only if it is unambiguous." (Opinion, p. 15, quoting I Dig Texas, 98 F.4th at 1009).

8. "These patented methods have now been tested and qualified for use on projects in accordance with governing building codes (AISC 341)": This statement was also deemed ambiguous, as it could refer to only those BRBs that passed testing, not all of Seismic Bracing's BRBs.

9. Implied Falsity and Intent to Deceive: Even if impliedly false, SME Steel did not prove Seismic Bracing acted with intent to deceive. Mr. Hinchman's awareness of important factors for customers was "insufficient to show a genuine dispute of material fact as to intent." (Opinion, p. 17).

10. False Association - Likelihood of Confusion:

11. SME Steel argued Seismic Bracing appropriated its "corporate persona" and used a similar logo and proprietary drawings.

12. The Tenth Circuit's "King of the Mountain" factors (e.g., similarity of marks, intent, actual confusion, marketing, purchaser care, strength of marks) are used to assess likelihood of confusion.

13. The court found "no genuine issue of material fact as to likelihood of confusion." (Opinion, p. 18).

14. Crucially, "customers are sophisticated and select BRBs through a bidding process." Given the "admitted care that customers will exercise in reviewing materials related to the bids and selecting BRBs, as well as the absence of evidence of actual confusion," no reasonable jury could find a likelihood of confusion. (Opinion, p. 18).

15. The related UTAA § 13-11a-3(b),(c) claims also failed as they rise and fall with the Lanham Act claims.
    

C. Copyright Damages

1. Requirement for Causal Connection:

2. SME Steel claimed copyright infringement based on Seismic Bracing's use of its copyrighted technical drawings in the Design Manual.

3. To recover indirect profits, the copyright holder must show "a nexus between [the alleged] infringement and making of a profit," and "[t]hat showing must go beyond speculation." (Opinion, p. 19, quoting I Dig Texas, 98 F.4th at 1007–08).

4. SME Steel only sought actual damages, specifically indirect profits, not statutory damages.

5. Lack of Evidence of Causation:

6. The district court correctly granted summary judgment because SME Steel's claim for damages was "based only on speculation." (Opinion, p. 20).

7. While some companies receiving the Design Manual later purchased BRBs from Seismic Bracing, SME Steel "failed to present any evidence that the companies’ purchase decisions were related to the use of SME Steel’s copyrighted material." (Opinion, p. 20).
   

D. Discovery of Damages Evidence

• Forfeiture of Argument:SME Steel argued summary judgment was improper because the district court refused to allow it to gather damages evidence via third-party subpoenas on "open bids."

• The Federal Circuit ruled that SME Steel "failed to preserve its argument for appeal." (Opinion, p. 20). SME Steel did not appeal the magistrate judge's order to the district court or argue at summary judgment that facts were unavailable under Rule 56(d).

• Furthermore, discovery was not prohibited for closed bids, and provisions existed to seek variances for open bids, indicating the restrictions were not an abuse of discretion.
  

IV. Conclusion

The Federal Circuit affirmed the summary judgment in favor of Seismic Bracing on all appealed claims. The core reasons were SME Steel's inability to prove patent infringement under the court's construction of the "air gap" (influenced by prosecution history), the failure to establish injury or causal connection for Lanham Act claims (false advertising and false association), and the lack of a proven nexus between copyrighted material use and Seismic Bracing's profits. The court also noted SME Steel's forfeiture of its argument regarding damages discovery.