This process btw is how USA effectively got software patents.
A corporation or other applied for a patent on a production process that used a computer (and therefore software) to gain more precise control of the results than previous mechanical means.
The patent holder was sued over it, and a judge ruled in the patent holders favor.
This ruling was then used by other lawyers to press for "process" patents, where the process was described in software.
And so far no higher court has overruled the initial ruling, thus effectively USA have software patents.
Judges on the same tier are not strictly bound, but in the interest of consistency (the law always seeks to be applied in the same way to the same situation), will look to the rulings of other courts on their level if no higher court has ruled. This is called persuasive precedent. The Supremes often take a case because the lower courts, (Circuit Courts of Appeals) have ruled differently on the same issue. This is called a circuit split.
Coming from a civil law country (where precedence does not play that much of a role) really makes these things hard to grasp normally.
As a hypothetical example, imagine a court 50 years ago said that talking to the police after invoking your 5th Amendment rights nullified your invocation of your rights.
Then, a case appears where a suspect wasn't read his Miranda rights but had invoked the 5th, except he then spoke to the police immediately after (and nullified his previous invocation). Well, what if the court decides he can re-invoke his 5th Amendment rights once he's finally read his Miranda rights? Boom. More precedence.
See how it can get complicated? It's almost kind of like when you have to write a bunch of edge-case code because weird "gotchas" keep cropping up and it's a bitch to rewrite the entire thing.