It’s the sad truth that patent lawyers aren’t often found haunting the halls of a state courthouse. Like bankruptcy and ERISA litigation, patent infringement cases cannot be filed in state court. As a result, patent lawyers are often uncomfortable with state court litigation. And state court judges are sometimes uncomfortable adjudicating issues of federal patent law, mostly because of the rarity with which they arise in the state system. But state court is just where you might have to head for certain patent law disputes involving licensing agreements.

That was what the Federal Circuit recently held in Inspired Development Group v. Inspired Products Group, d/b/a KidsEmbrace. The Inspired Development Group owned a series of design patents covering children’s car seats shaped like cartoon and comic book characters, the most important of which was one in the shape of Batman. A dispute arose over royalty payments between Inspired and its exclusive licensee, KidsEmbrace. Inspired filed its lawsuit in federal court, alleging claims for breach of contract and unjust enrichment. After KidsEmbrace won a summary judgment, Inspired, perhaps drawing inspiration from the Joker, challenged the jurisdiction of the federal court and ultimately won a do-over in state court on appeal.

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