CAFC Orders Settlement Agreement Enforced, Tosses Summary Judgment of Non-Infringement

Even though a settlement agreement may call for future performance, it generally renders the underlying action moot. The Federal Circuit may enforce a settlement agreement that resolves patent infringement claims as long as the proceedings are still ongoing.

Settlement Agreement Check Word 3d IllustrationThe Federal Circuit recently issued an opinion vacating the district court’s grant of summary judgment motions of non-infringement and remanding with instructions to enforce a settlement agreement between Serta Simmons Bedding, LLC and Dreamwell, Ltd. (collectively, “Serta Simmons”) and Casper Sleep Inc. (“Casper”). See Serta Simmons Bedding, LLC v. Casper Sleep Inc., No. 19-1098, 2020 U.S. App. LEXIS 4467 (Fed Cir. Feb. 13, 2020) (Before Dyk, Plager, and Stoll, Circuit Judges) (Opinion for the Court, Dyk, Circuit Judge).

Serta Simmons sued Casper for infringement of U.S. Patent Nos. 7,036,173, 7,424,763, and 8,918,935, each directed to mattresses that include a channel and methods for forming same. While Casper’s motions for summary judgment on the issue of non-infringement were pending, the parties executed a Settlement Agreement, requiring Casper to pay $300,000 to Serta Simmons and cease the allegedly infringing activities, including manufacturing, selling, and marketing the accused products by set dates. The Settlement Agreement included language obligating the parties to release each other from all liabilities and to dismiss all claims and counterclaims upon Casper’s payment of the stipulated fee. As further mandated by the Agreement, the parties filed a Joint Notice of Settlement and Motion to Stay informing the district court of the Settlement Agreement and requesting stay until the dismissal papers had been filed.

Without mentioning the Settlement Agreement, the district court granted Casper’s motions of non-infringement against Serta Simmons. In light of this, Casper refused to make the payments required by the Agreement. Serta Simmons, in turn, filed motions to enforce the Agreement and vacate the non-infringement orders, which the district court denied. Serta Simmons appealed. The Federal Circuit agreed with Serta Simmons, vacated the district court’s orders, and instructed the district court to enforce the Settlement Agreement.

Relying on precedent, the Federal Circuit first held that a binding settlement agreement generally moots an action even if it requires future performance. Here, Casper admitted that the Agreement was binding, the Agreement was neither unlawful nor contrary to public policy, and it was undisputed that the Settlement Agreement was executed prior to the court’s issuing of the summary judgment order. Thus, the Settlement Agreement rendered the infringement case moot. As a result, the Court vacated the summary judgment orders.

Second, applying Federal Circuit law, the Court held that the district court did have jurisdiction to enforce the Settlement Agreement. Because the Court vacated the district court’s summary judgment orders, there will be no final judgment in the case until the remand proceedings are concluded. Because the motion to enforce the Agreement was filed before the case is dismissed, the district court has jurisdiction to enforce it.

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The Author

Joseph Robinson

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Dustin Weeks is a Partner in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

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