Prior Settlement Bars DJ Action Despite Threat to Customers

Posted on | March 20, 2008 | No Comments

2008-1233 WS Packaging v. Global Commerce
ED/WI 06-cv-674

DJ plaintiff WS appeals from Judge William Griesbach’s orders granting summary judgment to defendant.  WS filed a DJ action seeking a declaration of noninfringement regarding Global’s 6,406,062 patent.  The parties previously litigated, and settled with a mutual covenant not to sue:

The parties agree not to institute any action, proceeding or arbitration against the other based upon any claims, obligations or liabilities released and discharged above, or the use of any manufacturing technology (whether methods, apparatus, or know-how) currently in use by each respective party, except as provided in this Settlement Agreement.

Applying normal rules of contract construction, the court concluded that the DJ action involved "manufacturing technology" that was in use by WS at the time of the prior settlement.  It further noted that the ’062 patent was part of that settlement, and that Global could not sue WS for infringing the ’062 based on its current manufacturing uses.

On a motion for reconsideration, the court again rejected WS’s arguments.  In particular, the court found that Global’s freedom to sue WS’s customers did not mean WS could sue Global.  Rejecting WS’s "symmetry" argument, "symmetry, however desirable in art, poetry, and music, is not a principle of contract construction."

Comments