Case: 19-1098 Document: 64 Page: 1 Filed: 02/13/2020
United States Court of Appeals
for the Federal Circuit
______________________
SERTA SIMMONS BEDDING, LLC, DREAMWELL,
LTD.,
Plaintiffs-Appellants
v.
CASPER SLEEP INC.,
Defendant-Cross-Appellant
______________________
2019-1098, 2019-1159
______________________
Appeals from the United States District Court for the
Southern District of New York in No. 1:17-cv-07468-AKH,
Judge Alvin K. Hellerstein.
______________________
Decided: February 13, 2020
______________________
PAUL MICHAEL SCHOENHARD, McDermott, Will & Em-
ery LLP, Washington, DC, argued for plaintiffs-appellants.
Also represented by IAN BARNETT BROOKS, SARAH
HOGARTH, NICOLE M. JANTZI.
KATHERINE QUINN DOMINGUEZ, Gibson, Dunn &
Crutcher LLP, New York, NY, argued for defendant-cross-
appellant. Also represented by JOSH KREVITT; ANDREW
WILLIAM ROBB, STUART ROSENBERG, Palo Alto, CA;
NATHAN ROBERT CURTIS, Dallas, TX.
______________________
Case: 19-1098 Document: 64 Page: 2 Filed: 02/13/2020
2 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
Before DYK, PLAGER, and STOLL, Circuit Judges.
DYK, Circuit Judge.
Serta Simmons Bedding, LLC and Dreamwell, Ltd. (to-
gether, “Serta Simmons”) own U.S. Patent Nos. 7,036,173
(“the ’173 patent”), 7,424,763 (“the ’763 patent”), and
8,918,935 (“the ’935 patent”). Serta Simmons sued Casper
Sleep Inc. (“Casper”) for infringement of certain claims of
those patents. The parties executed a settlement agree-
ment and advised the district court of the settlement. The
district court nevertheless granted Casper’s summary
judgment motions of non-infringement. It later denied
Serta Simmons’s motions to vacate the summary judgment
order and to enforce the settlement agreement.
We vacate the district court’s judgment and remand
with instructions to enforce the settlement agreement. We
affirm the district court’s denial of Casper’s motion for fees
and costs pertaining to proceedings before the parties en-
tered into the settlement agreement.
BACKGROUND
In September 2017, Serta Simmons filed a patent in-
fringement action against Casper, asserting infringement
of certain claims of the ’173, ’763, and ’935 patents. Those
patents cover mattresses that include a channel and meth-
ods for forming it. These mattresses can have varying ar-
eas of firmness by inserting reinforcement of various types
into their channels that can be located at regions where ad-
ditional support is desired.
Casper filed three motions for summary judgment on
the issue of non-infringement. The three motions were di-
rected to non-infringement of Casper’s (1) accused mat-
tresses, (2) accused methods of manufacturing, and (3)
redesigned mattresses. On June 18, 2018, while Casper’s
summary judgment motions were pending, the parties ex-
ecuted a settlement agreement (“Settlement Agreement”).
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SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC. 3
It required Casper to pay $300,000 to Serta Simmons by
June 28, 2018, cease manufacturing of the “Accused Wave
products” by July 15, 2018, cease selling inventory by other
specified dates, and “substantially discontinue” marketing
and advertising of the “Accused Wave products” by Au-
gust 15, 2018. J.A. 1867–68. The Settlement Agreement
required that the parties, within five days of Casper’s pay-
ment, file “appropriate papers to dismiss” all claims and
counterclaims. J.A. 1868. It also “obligated [the parties]
to ‘release[] . . . [the other party] from all liabilities.”
J.A. 1868. The Settlement Agreement provided that the
parties would “file a joint motion to stay the [case] pending
final settlement.” Id. Also on June 18, 2018, in accordance
with their agreement, the parties filed a Joint Notice of Set-
tlement and Motion to Stay, informing the district court
that they “entered into a Settlement Agreement” and re-
questing that all deadlines be stayed “until July 5, 2018, by
which date the [p]arties anticipate[d] they will have filed
appropriate dismissal papers.” J.A. 1839.
Nevertheless, without mentioning the Settlement
Agreement, on June 20, 2018, the district court issued an
order granting Casper’s summary judgment motions of
non-infringement. It reasoned that (1) channels in Cas-
per’s products were “not at the top or bottom of the physical
mattress structure” as required by claims 1 and 4–7 of the
’173 patent, 1 J.A. 8, and (2) Casper did “not form . . . chan-
nels by assembling foam pieces” as required by claims 8–9
1 These claims are product claims asserted by Serta
Simmons, and they require a mattress comprising:
[A] body . . . having a top surface, a bottom sur-
face[] . . . [where] at least one of the top and bottom
surfaces includ[es] a plurality of channels extend-
ing into the body perpendicularly therefrom . . . .
’763 patent, col. 6, ll. 8–18, 23–33.
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4 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
and 11–12 of the ’763 patent, claims 5–6 and 8 of the
’173 patent, and claims 10 and 13 of the ’935 patent, 2 “but
[does so] by cutting.” J.A. 13. It further stated that the
“Clerk shall terminate the [summary judgment] motions
. . . and enter judgment for Defendant Casper, dismissing
the Complaint, with costs to be taxed by the Clerk.”
J.A. 15. No separate document of judgment was entered by
the Clerk. The following week, Casper informed Serta Sim-
mons that it would not make the payment required by the
Settlement Agreement because the agreement was “null
and void” given the summary judgment order. J.A. 1876.
Serta Simmons filed motions to enforce the Settlement
Agreement and to vacate the summary judgment order, ar-
guing that the judgment was void because the case became
moot by virtue of the Settlement Agreement. The district
court denied the motions. It reasoned 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 [Agree-
ment].” J.A. 17. The district court also held that it lacked
jurisdiction to enforce the Settlement Agreement once the
summary judgment order issued. It then directed the
“Clerk . . . to enter judgment for Casper in a separate doc-
ument.” J.A. 21. A few days later, the Clerk entered final
2 These claims are method claims asserted by Serta
Simmons. Claims 8–9 and 11–12 of the ’763 patent require:
[A]ssembling the plurality of rectangular foam
pieces to form the body having a channel in the re-
gion[] [of the body] . . . .
’763 patent, col. 6, ll. 34–44, 47–51. Asserted method
claims of the ’173 and ’935 patents recite similar limita-
tions.
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SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC. 5
judgment based on the district court’s order that it resolved
all claims and counterclaims.
Casper filed a motion for fees and costs under
35 U.S.C.
§ 285,
28 U.S.C. § 1927, and the district court’s inherent
power based on Serta Simmons’s alleged improper litiga-
tion tactics before execution of the Settlement Agree-
ment—including pursuit of baseless infringement claims,
abuse of discovery, filing of a baseless preliminary injunc-
tion motion, and untimely requesting reconsideration of
the district court’s claim construction. The district court
denied that motion, reasoning that the case did not merit
an award of fees under § 285 because it was “not an excep-
tional patent case warranting fee shifting.” J.A. 48.
Serta Simmons appeals, and Casper cross-appeals. We
have jurisdiction under
28 U.S.C. § 1295(a)(1).
We review de novo whether a case or controversy exists
and apply Federal Circuit law. See Sanofi-Aventis U.S.,
LLC v. Dr. Reddy’s Labs., Inc.,
933 F.3d 1367, 1372 (Fed.
Cir. 2019). “[I]nterpretation of a settlement agreement [is
a] question[] of law that we review de novo.” SUFI Network
Servs., Inc. v. United States,
785 F.3d 585, 590 (Fed. Cir.
2015).
DISCUSSION
I
Generally, a “[s]ettlement moots an action” because
there is no longer a case or controversy with respect to the
settled issues. Gould v. Control Laser Corp.,
866 F.2d
1391, 1392 (Fed. Cir. 1989) (citations omitted). Neverthe-
less, Casper argues that the parties’ Settlement Agreement
did not moot the action because it called for future perfor-
mance providing that Casper had ten days to pay $300,000,
after which the parties would file papers to dismiss the
claims and then “be obligated to ‘release[] . . . [the other
party] from all liabilities.” Appellee’s Br. 38–39 (citing
J.A. 1867–68)). We disagree.
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6 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
In Exigent Technology, Inc. v. Atrana Solutions, Inc.,
442 F.3d 1301 (Fed. Cir. 2006), we held that an enforceable
settlement generally renders a case moot even though the
parties have not yet performed the terms. There the par-
ties signed an “Agreement in Principle Term Sheet,” which
included “an agreement to dismiss the . . . case under terms
to be agreed to” and to execute a license agreement.
Id. at
1304. The district court, however, granted the defendant’s
motion for summary judgment of non-infringement and or-
dered the case dismissed.
Id. at 1305. We decided that the
district court should have first determined whether the
parties entered into an enforceable agreement because, if
so, “it rendered moot the entry of final judgment” as “[s]et-
tlement moots an action.”
Id. at 1312 (quoting Control La-
ser,
866 F.2d at 1392). We thus recognized that a binding
settlement generally moots an action despite the fact that
the settlement agreement requires further implementing
steps to be taken.
Other circuits have similarly held that “a settlement
involving all parties and all claims moots an action . . . even
if they contain executory terms.” Tosco Corp. v. Hodel,
804
F.2d 590, 592 (10th Cir. 1986) (internal citations omitted);
accord Future Plastics, Inc. v. Ware Shoals Plastics, Inc.,
407 F.2d 1042, 1046 (4th Cir. 1969); Douglas v. Donovan,
704 F.2d 1276, 1278–79 (D.C. Cir. 1983) (settlement
mooted the case even though the settlement agreement re-
quired the defendant to make future payments); Scott v.
Livingston, 628 F. App’x 900, 902–03 (5th Cir. 2015) (un-
published) (settlement agreement mooted the case even
though the agreement called for future performance in the
form of payment and dismissal); Jarrow Formulas, Inc. v.
Nature’s Way Prods., Inc.,
942 F.2d 791,
1991 WL 166438,
at *1–2 (9th Cir. 1991) (unpublished) (settlement agree-
ment mooted the case even though it required future per-
formance—dismissing the pending claims). See also
Campbell-Ewald Co. v. Gomez,
136 S. Ct. 663, 666, 670
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SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC. 7
(2016), as revised (Feb. 9, 2016) (assuming that a binding
settlement agreement would moot the action).
Casper contends that two Seventh Circuit decisions are
to the contrary and that the case was not mooted by the
Settlement Agreement, citing Selcke v. New England Ins.
Co.,
2 F.3d 790 (7th Cir. 1993) and Gould v. Bowyer,
11
F.3d 82 (7th Cir. 1993). Those cases are not binding on us,
are questionable on the merits, and in any event, are dis-
tinguishable since one involved a settlement agreement
that was not yet binding (Selcke,
2 F.3d at 791–92), and the
other potentially required further action by the court (Brief
of Defendant-Appellant Larry Bowyer, Gould v. Bowyer,
11
F.3d 83 (7th Cir. 1993) (No. 92-3697),
1993 WL 13036997,
at *5).
We conclude that a binding settlement agreement gen-
erally moots the action even if the agreement requires fu-
ture performance.
While the issue is not before us in this case, we note
that there are circumstances where a district court may re-
fuse to enforce a settlement agreement or where the dis-
trict court is obligated to refuse to enforce such an
agreement. For example, district courts will not enforce
settlement agreements that are contrary to law or public
policy. See Hurd v. Hodge,
334 U.S. 24, 34–35 (1948); Os-
canyan v. Arms Co.,
103 U.S. 261, 267–68 (1880); Fomby-
Denson v. Dep’t of Army,
247 F.3d 1366, 1373–75 (Fed. Cir.
2001).
Here, however, there is no contention that the Settle-
ment Agreement or the relief sought by Serta Simmons is
unlawful or contrary to public policy. There is also no dis-
pute that the parties executed the Settlement Agreement
before the district court issued the summary judgment or-
der, and Casper has admitted that the agreement was
Case: 19-1098 Document: 64 Page: 8 Filed: 02/13/2020
8 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
binding. 3 The Settlement Agreement mooted the case even
though it included terms that required future perfor-
mance. 4
Accordingly, we vacate the district court’s entry of
judgment and summary judgment order because the Set-
tlement Agreement rendered moot the underlying infringe-
ment case.
II
The district court also denied Serta Simmons’s motion
to enforce the Settlement Agreement, reasoning that it did
not have jurisdiction under Kokkonen v. Guardian Life In-
surance Co. of America,
511 U.S. 375, 382 (1994).
In Kokkonen, the parties reached an oral agreement be-
fore trial to settle.
511 U.S. at 376. They executed a Stip-
ulation and Order of Dismissal with Prejudice, which “did
not reserve jurisdiction in the District Court to enforce the
settlement agreement[] . . . [or] refer to [it].”
Id. at 376–
377. Later, when the defendant moved to enforce the
agreement, the district court already had dismissed the ac-
tion by signing the Stipulation and Order.
Id. at 377, 381–
82. The Supreme Court held that because the motion to
enforce was filed after the proceeding was concluded and
3 During oral argument, Casper stated that “the
agreement was binding and there’s no dispute about that.”
Oral Arg. 22:19–21, available at http://oralargu-
ments.cafc.uscourts.gov/default.aspx?fl=2019-1098.mp3.
4 If non-performance of a contract term constitutes a
material breach, the non-breaching party, of course, may
have a right to rescind the settlement agreement and re-
commence litigation. See Thomas v. Dep’t of Hous. & Ur-
ban Dev.,
124 F.3d 1439, 1442 (Fed. Cir. 1997); Parker v.
Hoppe,
178 N.E. 550, 552 (N.Y. 1931). But the breach does
not automatically terminate the contract. Serta Simmons
made no such election to rescind the agreement here.
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SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC. 9
the district court did not “retain jurisdiction over the set-
tlement” through its dismissal order, the district court had
lost ancillary jurisdiction over the agreement. 5
Id. at 381–
82. Kokkonen, however, did not hold that a federal court
cannot grant a motion to enforce filed before a dismissal of
the case.
We apply Federal Circuit law in determining whether
district courts have jurisdiction to enforce settlement
agreements that resolve patent infringement claims. See
Voda v. Cordis Corp.,
476 F.3d 887, 892 (Fed. Cir. 2007)
(applying Federal Circuit law on issue of whether supple-
mental jurisdiction existed); Mars Inc. v. Kabushiki-Kaisha
Nippon Conlux,
24 F.3d 1368, 1371 (Fed. Cir. 1994). We
may, of course, look for guidance from other circuits.
While not binding, we find persuasive several Second
Circuit cases holding that a district court has jurisdiction
to enforce a settlement agreement when the proceedings
are ongoing. Before Kokkonen, the Second Circuit held
that “[a] district court has the power to enforce summarily,
on motion, a settlement agreement reached in a case that
was pending before it.” Meetings & Expositions, Inc. v.
Tandy Corp.,
490 F.2d 714, 717 (2d Cir. 1974). See also
Janneh v. GAF Corp.,
887 F.2d 432, 436 (2d Cir. 1989) (di-
recting the district court to enforce the settlement where
the claims were not dismissed and the case was ongoing),
abrogated on other grounds by Digital Equip. Corp. v. Desk-
top Direct, Inc.,
511 U.S. 863 (1994). After Kokkonen, the
Second Circuit reaffirmed its decision in Meetings & Expo-
sitions, BCM Dev., LLC v. Oprandy, 490 F. App’x. 409, 409
5 Ancillary jurisdiction is different from supple-
mental jurisdiction codified in
28 U.S.C. § 1367. See, e.g.,
K.C. ex rel. Erica C. v. Torlakson,
762 F.3d 963, 966–97 (9th
Cir. 2014) (explaining that Kokkonen recognized ancillary
jurisdiction beyond § 1367).
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10 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
(2d Cir. 2013) (unpublished) (citing Meetings,
490 F.2d at
717).
Other circuits have similarly held that “nothing in Kok-
konen precludes district courts from enforcing settlements
that occur during litigation.” T St. Dev., LLC v. Dereje &
Dereje,
586 F.3d 6, 10 (D.C. Cir. 2009); Bailey v. Potter,
478
F.3d 409, 412 (D.C. Cir. 2007) (jurisdiction to enforce a set-
tlement agreement existed because “claims were still pend-
ing before the district court”); Bryan v. Erie Cty. Office of
Children & Youth,
752 F.3d 316, 322 (3rd Cir. 2014)
(same); Roman-Oliveras v. Puerto Rico Elec. Power Auth.,
797 F.3d 83, 86 (1st Cir. 2015) (same). Even Casper agrees
that a court has jurisdiction to enforce a settlement if the
“enforcement issue is raised during the pendency of the
original case.” Appellee Br. 46 (citing T Street,
586 F.3d at
10; Kokkonen,
511 U.S. at 381).
We agree with those cases and conclude that under
Federal Circuit law a district court has jurisdiction to en-
force a settlement agreement that resolves patent infringe-
ment claims if the motion to enforce is filed before the case
is dismissed and the proceedings are ongoing.
The parties here dispute whether the district court dis-
missed all claims and counterclaims and issued a final
judgment before Serta Simmons filed the motion to enforce
the Settlement Agreement. We need not resolve that dis-
pute. As discussed earlier, our decision vacates the district
court’s judgment and summary judgment order. Under our
mandate, there will be no final judgment dismissing the
parties’ claims until the remand proceedings are con-
cluded. The district court will have jurisdiction to enforce
the Settlement Agreement.
As an alternative ground, Casper contends that we
may affirm the denial of Serta Simmons’s motion to enforce
because the summary judgment order frustrated the pur-
pose of the Settlement Agreement and rendered it null and
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SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC. 11
void. There is no merit to this contention since the sum-
mary judgment order was improper and must be vacated.
Accordingly, we direct the district court to enforce the
Settlement Agreement during the remand proceedings.
III
On cross-appeal, Casper seeks fees and costs pertain-
ing to proceedings that occurred prior to the Settlement
Agreement’s execution pursuant to
35 U.S.C. § 285,
28
U.S.C. § 1927, and the district court’s inherent power. It
argues that the district court erred by denying its fees mo-
tion.
Because we vacate the summary judgment order, and
Casper is not a prevailing party, Casper’s request under
§ 285 is moot as Casper conceded during oral argument.
We reject Casper’s request for fees and costs relating to
pre-settlement litigation under
28 U.S.C. § 1927 and the
district court’s inherent power. The Settlement Agreement
provides that “the Parties [are] to bear their own litigation
costs and fees” and will “release . . . all . . . claims or de-
mands, . . . attorneys’ fees, . . . or any form of claim or com-
pensation . . . arising out of the facts and circumstances
underlying the Litigation.” J.A. 1868–69. This language
precludes an award of fees and costs pertaining to proceed-
ings that occurred prior to the execution of the Settlement
Agreement.
IV
For the foregoing reasons, we vacate the district court’s
judgment, summary judgment order, and order denying
the motion to enforce the Settlement Agreement. We re-
mand with instructions to enforce the Settlement Agree-
ment. We affirm the district court’s denial of fees and costs
pertaining to proceedings that incurred before the Settle-
ment Agreement.
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12 SERTA SIMMONS BEDDING, LLC v. CASPER SLEEP INC.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
COSTS
Costs to Serta Simmons.
