DJ grant of SJ of non-infringement vacated due to pre-existing settlement agreement

Serta Simmons Bedding, LLC et al. v. Casper Sleep Inc.

Docket No. 2019-1098, -1159
February 13, 2020

Brief Summary: DC grant of SJ vacated and remanded due to pre-existing settlement agreement.

Summary: Serta appealed DC grant of Casper’s summary judgment (SJ) motions of non-infringement and denial of Serta’s motions to vacate the SJ and to enforce a settlement agreement (SA). The disputed patents are US 7,036,137; 7,424,763; and 8,918,935 relating to mattresses including a channel and methods for forming it. The SA was entered into on June 18, 2018 while Casper’s SJ motions were pending, and the court was notified by a Joint Notice of Settlement and Motion to Stay filed the same day but nevertheless issued its order granting Casper’s motions (SJ of non-infringement) on June 20, 2018. Casper then “informed Serta Simmons that it would not make the payment required by the [SA] because the agreement was ‘null and void’ given the” DC’s grant of SJ. Serta filed motions to enforce the SA reasoning that “the case was not moot because ‘the parties did not intend to immediately dismiss the claims, instead keeping the action alive until the parties fulfilled their obligations under the” SA. The DC held “it lacked the authority to enforce the [SA] once the [SJ] order issued.” Casper then filed a motion for fees and costs (section 285) based on alleged improper litigation tactics by Serta (e.g., baseless infringement claims), which was denied. ¬¬¬¬The FC panel explained that in Exigent Tech. (FC 2006), it “recognized that a binding settlement generally moots an action despite the fact that the settlement agreement requires further implanting steps to be taken”, and it confirmed that that holding applies to this case, and vacated the DC grant of SJ on this basis. Although not at issue here, the FC panel did note that DCs are not required to “enforce settlement agreements that are contrary to public law or public policy” (Hurd, US 1948). The FC panel also concluded that under FC law a DC “has jurisdiction to enforce a settlement agreement that resolves patent infringement claims if the motion to enforce is filed before the case is dismissed and the proceedings are ongoing”, and directed the DC to enforce the SA during the remand proceedings.” The FC panel also found Casper’s request for fees to be moot since the SJ order was vacated, noting that the SA requires that “the Parties [are] to bear their own litigation costs and fees” and “release…all…attorneys’ fees” arising out of the litigation.

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