Serta Simmons Bedding v. Casper Sleep was decided on February 13, 2020 on appeal from the Southern District of New York. In September 2017, plaintiff Serta filed a patent infringement lawsuit against defendant Casper. While Casper’s motions for summary judgment of non-infringement were pending, the parties executed a settlement agreement. The agreement required Casper to pay $300,000 to Serta within 10 days, and to cease selling manufacturing the accused products, cease selling inventory, and to “substantially discontinue” marketing and advertising of the accused products by specified dates. “The Settlement Agreement required that the parties, within five days of Casper’s payment, file appropriate papers to dismiss all claims and counterclaims. It also obligated the parties to release the other party from all liabilities.”
On June 18, 2018, the parties “filed a Joint Notice of Settlement and Motion to Stay, informing the district court that they entered into a Settlement Agreement and requesting that all deadlines be stayed until July 5, 2018.” “[W]ithout mentioning the Settlement Agreement, on June 20, 2018, the district court issued an order granting Casper’s summary judgment motions of non-infringement.” The following week, Casper informed Serta that “it would not make the payment required by the Settlement Agreement because the agreement was null and void given the summary judgment order.” The district court denied Serta’s motions to enforce the settlement agreement and to vacate the summary judgment order, “reason[ing] that the case was not moot when it issued the summary judgment order because the parties did not intend to immediately dismiss the claims, instead keeping the action alive until the parties fulfilled their obligations under the Settlement Agreement.” The district court also held that it lacked jurisdiction to enforce the Settlement Agreement once the summary judgment order issued. The district court then denied Casper’s motion for attorney fees and costs. Both parties appealed.
The Federal Circuit vacated the district court’s final judgment, summary judgment order, and order denying the motion to enforce the settlement agreement, affirmed the denial of fees, and remanded.
The settlement agreement rendered moot the underlying infringement case. “Generally, a settlement moots an action because there is no longer a case or controversy with respect to the settled issues.” A settled infringement action is mooted “even if the agreement requires future performance.” Here, there was “no contention that the Settlement Agreement or the relief sought by Serta Simmons is unlawful or contrary to public policy.” And there was “no dispute that the parties executed the Settlement Agreement before the district court issued the summary judgment order. So the agreement mooted the case even though it included terms that required future performance (payment within 10 days). The Federal Circuit thus vacated the entry of judgment and summary judgment order.
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The Federal Circuit directed the district court to enforce the settlement agreement on remand. “[U]nder Federal Circuit law a district court 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.” Because the Federal Circuit vacated the district court’s judgment and summary judgment order, “there will be no final judgment dismissing the parties’ claims until the remand proceedings are concluded.” The district court will thus have jurisdiction to enforce the settlement agreement.
Because the Federal Circuit vacated the summary judgment order, Casper was not a prevailing party, and was thus not entitled to attorney fees under §285.