"Such As" is Limiting, Not Exemplary

Lawler Manufacturing Co., Inc., v. Bradley Corporation, [2007-1533] (May 27, 2008) [LOURIE, Mayer, Schall] The Federal Circuit reversed and remanded the cased because the district court erred in construing the license agreement.
BRIEF: The Federal Circuit reviews the interpretation of contractual terms under the law of the regional circuit from which the appeal arises, in this case the Seventh Circuit, which in turn applies the law of the state. The license agreement applied two different royalty rates depending upon whether the licensed product was sold alone, or in combination with other products “such as an emergency shower or eyewash”. The district court concluded that this means that the combination royalty rate applied whenever the licensed products were sold with other products. The Federal Circuit agreed with Lawler that the district court misinterpreted the “such as” term of Section 3.1. The court’s interpretation would allow any product in combination with a valve to be covered by the alternative royalty provision of Section 3.1. The Federal Circuit said that the district court’s interpretation of the “such as” clause effectively renders the specified item superfluous. If all combinations of products qualified for Section 3.1’s alternative royalty provision, as the district court held that they do, there would be no need to list specific examples of included combinations.The parties’ inclusion of the “such as” phrase in Section 3.1 must either have been intended to provide some guidance as to the limited types of combinations that the parties contemplated for inclusion in the alternative royalty calculation, or to provide meaningless surplusage. Indiana law constrains us from finding the latter. Thus, the alternative royalty provision of Section 3.1 applies only to combinations of products that are similar to emergency showers and eyewashes