Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-19-01159/USCOURTS-ca13-19-01159-0/pdf.json

Parties Involved:
Casper Sleep Inc.
Cross-Appellant
Dreamwell, Ltd.
Appellant
Serta Simmons Bedding, LLC
Appellant

Document Text:

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 & Emery 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-crossappellant. Also represented by JOSH KREVITT; ANDREW 

WILLIAM ROBB, STUART ROSENBERG, Palo Alto, CA; 

NATHAN ROBERT CURTIS, Dallas, TX. 

 ______________________

Case: 19-1159 Document: 3 Page: 1 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. (together, “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 agreement 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 entered into the settlement agreement.

BACKGROUND

In September 2017, Serta Simmons filed a patent infringement action against Casper, asserting infringement 

of certain claims of the ’173, ’763, and ’935 patents. Those 

patents cover mattresses that include a channel and methods for forming it. These mattresses can have varying areas of firmness by inserting reinforcement of various types 

into their channels that can be located at regions where additional support is desired. 

Casper filed three motions for summary judgment on 

the issue of non-infringement. The three motions were directed to non-infringement of Casper’s (1) accused mattresses, (2) accused methods of manufacturing, and (3) 

redesigned mattresses. On June 18, 2018, while Casper’s 

summary judgment motions were pending, the parties executed 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 August 15, 2018. J.A. 1867–68. The Settlement Agreement

required that the parties, within five days of Casper’s payment, 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 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, 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 Casper’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 . . . channels 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 surface[] . . . [where] at least one of the top and bottom 

surfaces includ[es] a plurality of channels extending 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 Simmons 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, arguing 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 [Agreement].” 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 document.” 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 region[] [of the body] . . . .

’763 patent, col. 6, ll. 34–44, 47–51. Asserted method 

claims of the ’173 and ’935 patents recite similar limitations.

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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 litigation tactics before execution of the Settlement Agreement—including pursuit of baseless infringement claims, 

abuse of discovery, filing of a baseless preliminary injunction 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 exceptional 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). Nevertheless, Casper argues that the parties’ Settlement Agreement 

did not moot the action because it called for future performance 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 parties 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 ordered 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]ettlement moots an action.” Id. at 1312 (quoting Control Laser, 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 required the defendant to make future payments); Scott v. 

Livingston, 628 F. App’x 900, 902–03 (5th Cir. 2015) (unpublished) (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 agreement mooted the case even though it required future performance—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 distinguishable 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 generally moots the action even if the agreement requires future performance. 

While the issue is not before us in this case, we note 

that there are circumstances where a district court may refuse to enforce a settlement agreement or where the district 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); Oscanyan v. Arms Co., 103 U.S. 261, 267–68 (1880); FombyDenson v. Dep’t of Army, 247 F.3d 1366, 1373–75 (Fed. Cir. 

2001). 

Here, however, there is no contention that the Settlement Agreement or the relief sought by Serta Simmons is 

unlawful or contrary to public policy. There is also no dispute that the parties executed the Settlement Agreement 

before the district court issued the summary judgment order, and Casper has admitted that the agreement was

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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 performance.4

Accordingly, we vacate the district court’s entry of 

judgment and summary judgment order because the Settlement Agreement rendered moot the underlying infringement 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 Insurance Co. of America, 511 U.S. 375, 382 (1994).

In Kokkonen, the parties reached an oral agreement before trial to settle. 511 U.S. at 376. They executed a Stipulation 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 action 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://oralarguments.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 recommence litigation. See Thomas v. Dep’t of Hous. & Urban 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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the district court did not “retain jurisdiction over the settlement” 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 supplemental 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) (directing 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. Desktop Direct, Inc., 511 U.S. 863 (1994). After Kokkonen, the 

Second Circuit reaffirmed its decision in Meetings & Expositions, BCM Dev., LLC v. Oprandy, 490 F. App’x. 409, 409 

5 Ancillary jurisdiction is different from supplemental 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 Kokkonen 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 settlement agreement existed because “claims were still pending 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 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.

The parties here dispute whether the district court dismissed 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 dispute. 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 concluded. 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 purpose 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 summary 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 pertaining 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 motion.

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 demands, . . . attorneys’ fees, . . . or any form of claim or compensation . . . 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 proceedings 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 remand with instructions to enforce the Settlement Agreement. We affirm the district court’s denial of fees and costs

pertaining to proceedings that incurred before the Settlement 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. 

Case: 19-1159 Document: 3 Page: 12 Filed: 02/13/2020