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A settlement agreement in a patent infringement dispute that contains unambiguous terms is enforceable notwithstanding the fact that the parties continued to make offers and counteroffers for changes to the agreement after its signing, the Federal Circuit held Nov. 17 ( Inwood International Co. v. Wal-Mart Stores Inc., et al., No. 00-1024, Fed. Cir.). In an unpublished opinion, a panel of the court found that a settlement agreement between Inwood International Co. and Wal-Mart Stores Inc. and associated parties unambiguously set forth the terms on which the parties would settle and noted that none of the later offers were accepted by the parties. The settlement agreement was entered after Inwood sued Wal-Mart and the associated parties for infringement of its patent for a video game with playback of live events feature. The agreement included a grant of a royalty-free license to Wal-Mart to make, use and sell games covered by the patent, mutual releases and dismissal of claims. The U.S. District Court for the Northern District of Texas found that the agreement, reached in a mediation session, contained sufficient essential terms to be enforceable and that since there were no subsequent agreements reached by the parties, the agreement was the only enforceable agreement regarding the infringement suit. AGREED ORDER OF DISMISSAL The lower court then directed the parties to submit an agreed order of dismissal under the terms of the agreement and noted that the parties had an obligation to execute mutual releases and formal settlement documents. The parties submitted the order of dismissal and the court entered judgment dismissing all of Inwood’s claims against Wal-Mart. Inwood then filed a motion requesting that the District Court vacate its dismissal order, which the court denied. Inwood filed a notice of appeal, which the Federal Circuit accepted after determining that Inwood’s motion could be treated as a motion for relief from judgment under Federal Rule of Civil Procedure 60(b) — which allows a district court to relieve a party from a final judgment for mistake, inadvertence or other reasons justifying relief — and as such Inwood’s appeal was timely filed. The Federal Circuit noted that under the precedent of the pertinent circuit, the 5th U.S. Circuit Court of Appeals, relief under Rule 60(b) requires a showing of extraordinary circumstances and that denial of the motion must have been so unwarranted as to constitute an abuse of discretion. APPEAL On appeal, Inwood argued that the evidence does not support the lower court’s finding that the parties had reached an enforceable agreement, contending that the parties never came to a meeting of the minds as to what the settlement covered. It said that there were communications from both sides after the agreement’s date regarding potential changes, communications that showed the sides were at polar opposites with respect to the interpretation of certain provisions. The lower court had found that the agreement contained essential terms so as to be enforceable, that the agreement set forth the terms of the settlement and that none of the post-mediation offers for changes were accepted and thus it was proper to enforce the original document produced at the mediation. “Our review of the terms of the settlement agreement supports the district court’s determination that the agreement, as a contract, contained unambiguous terms and is binding on the parties,” Judge Richard Linn wrote for the Federal Circuit panel. “Thus, none of Inwood’s arguments regarding the lack of a meeting of the minds convince us that the district court made an error of law.” SIGNATURE CHALLENGED Inwood also asserted that neither Wal-Mart nor one of the owners of an associated company signed the agreement, with the signature instead made by an associate attorney of the law firm whose partners represented the two parties. But the Federal Circuit said Inwood would have to establish that the attorney acted without any kind of authority and that a party’s counsel is presumed to have settlement authority when present at a mediation settlement intended to settle a lawsuit. Further, the agreement specifically states that the attorney who signed for Wal-Mart and the associated party was “counsel for” them and Inwood provided no affirmative proof that the attorney had no right to consent to the agreement, the opinion said. The court also rejected Inwood’s contention that there had been a lack of consideration, noting that in the 5th Circuit, there is a presumption of sufficient consideration to support a written agreement. Surrendering a legal right, as Wal-Mart did when it gave up its claims for costs and attorneys’ fees under the agreement, represents valid consideration, the opinion noted. The court added that Inwood’s arguments “are ones that could have been made on a timely appeal of the final judgment” and that Rule 60(b) “cannot be considered an appropriate avenue of relief for Inwood.” �; Copyright 2000 Mealey Publications, Inc.

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