After seven years of successful litigation, it was understandable that St. Jude Medical wanted to put its dispute with Niazi Licensing Corp. (NLC) to bed. But St. Jude Medical's too-quick response to a mediator's email left it stuck with a settlement it didn't want. In a patent case, there are always loose ends that remain before a settlement can be finalized.
St. Jude Medical was granted summary judgment of noninfringement on NLC's lone asserted claim, defended the judgment on appeal, and even secured an award of attorneys' fees for vexatious litigation under Section 1927. The parties went to mediation to settle their remaining disputes and reported a settlement in principle. Two months later, the parties informed the Court that “no progress had been made and that the matter should be reinstated.” NLC sought to enforce what it contended was a binding settlement.
The key issue before the Court was whether the mediated result was binding on St. Jude Medical under the applicable Wisconsin statute. The mediator sent the parties an email setting forth the agreed-upon terms and stating that “[t]he parties agree that this is a writing constituting all of the material terms of their settlement and is therefore fully binding and enforceable under Wis. Stat. 807.05.” That wasn't enough, however, because the statute requires that the agreement be “subscribed” by the party or its attorney. Unfortunately for St. Jude Medical, its attorney responded to the email with the word “Agreed.” That was a “subscription” under the statute.
St. Jude Medical apparently wanted to include a covenant not to sue in the settlement, but there was no evidence that such a provision was ever raised or discussed during the mediation. The case serves as a useful reminder that parties should not be too quick to endorse an agreement in principle as a final word on their settlement. Until there is a fully drafted settlement agreement in place, all communications should state that any settlement is subject to such an agreement being finalized and approved.
Niazi Licensing Corp. v. St. Jude Medical S.C., Inc., 17-cv-5096, 2024 WL 195574 (D. Minn. Jan. 18, 2024)