Federal Circuit Decision Reverses District Court Decision on Settlement

In PlasmaCAM, Inc. v. CNCElectronics, LLC, No. 21-1689 (Fed. Cir. Feb. 3, 2022), the Federal Circuit reversed and remanded the district court’s judgment ordering CNC to execute Plasmacam’s version of the settlement agreement.

The patent-in-suit is directed to a plasma cutting system, to which Plasmacam has an executive license. Plasmacam accused CNC of infringement. The parties later notified the district court that they reached a settlement agreement; however, the parties could not agree on the scope of the release. CNC advocated for a broad release of all past and future claims, not just those specifically accused of infringement. The district court ordered CNC to execute the settlement agreement using Plasmacam’s proposed narrow scope, releasing only past and future claims for products accused of infringement.

In a split decision, the Federal Circuit held that “the district court committed clear error” when ordering CNC to execute the settlement based on Plasmacam’s terms, finding that email correspondence between the parties “establishes that Plasmacam ultimately agreed to CNC’s proposed Covered Products definition” and released CNC from future claims of infringement. Judge Newman dissented, finding that there was never an agreement between the parties.