Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Serta Simmons Bedding, LLC v. Casper Sleep Inc., 2019-1098, -1159 (Feb. 13, 2020). Serta sued Casper for infringement of three patents covering aspects of mattresses. Casper filed motions for summary judgment of non-infringement. On June 18, 2018, the parties executed a settlement agreement requiring Casper to pay $300,000 to Serta by June 28, 2018, and to cease manufacturing, sales, and promotion of the accused products according to a specified schedule. The parties filed a joint notice of settlement and motion to stay, informing the district court they had entered into a settlement agreement and requesting that all deadlines be stayed.
Without mention of the parties’ settlement agreement, on June 20, 2018, the district court issued an order granting Casper’s summary judgment motions. Casper thereafter asserted the settlement agreement was “null and void.” Serta moved to enforce the settlement agreement and vacate the summary judgment order, asserting the judgment was void because the settlement agreement rendered the case moot before the order issued. The district court denied Serta’s motions. The court reasoned 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 their settlement agreement. The court further held it lacked jurisdiction to enforce the settlement agreement after the summary judgment order issued. Serta appealed.
The Federal Circuit vacated and remanded. The Court first noted neither party disputed that they had executed a binding settlement agreement. The Court then held that the binding settlement agreement mooted the underlying infringement case even though the agreement had terms specifying future performance. Because the case was moot prior to the district court’s summary judgment order, the order should not have issued.
On the question of the district court’s jurisdiction, the Court held that under Federal Circuit law, a district court has jurisdiction to enforce a settlement agreement that resolves patent infringement claims as long as the motion to enforce is filed before the case is dismissed and the proceedings are ongoing. The Court explained that, because it vacated and remanded the district court’s summary judgment, upon return to the district court the proceedings will be ongoing and the district court will have jurisdiction to enforce the settlement agreement.