United States District Court, D. Delaware
is no basis in the law to undo a contract made. On this
guiding principle, Plaintiff Callwave's motion (D.I. 658)
to enforce a settlement agreement between itself and third
party Telecommunication System Inc. is
sued Defendants Verizon and Google for infringing U.S. Patent
No. 6, 771, 970. TCS supplies the accused systems to Verizon.
Accordingly, TCS has indemnified Verizon.
exchange of emails and phone calls between Callwave and TCS
culminated in an August 8, 2016 email that reads:
[T]hank you for the call today and for Callwave's counter
proposal to the remaining terms in disagreement-i.e.,
payment. We understand Callwave's counter-proposal for
this term is $850k for the first payment, and $300k for the
second payment. My client accepts.
Please provide us a draft of the settlement agreement in
addition to the motion to stay.
(D.I. 660-1 at 2). Two days later, the parties filed a joint
stipulation and agreement to stay the case because they had
"reached an agreement in principle regarding
settlement...." (D.I. 537). From that date, TCS and
Callwave marched forward in their attempt to memorialize the
agreement in a formal contract. Drafts, comments, and edits
were exchanged. (D.I. 660-1 at 18-85).
September 15, though, the attempt to formalize the agreement
in writing hit a bump. As Google remained in the case, I
ruled on a § 101 motion and invalidated the '970
patent. That ruling is now on appeal.
my order, the "agreement in principle" transformed
to an agreement to agree in TCS's eye. TCS refused to
continue the effort to reduce the agreement to writing. It
now argues that comments on drafts show there was not
agreement on all of the essential terms.
law directs me to enforce a settlement agreement if "a
reasonable negotiator...would have concluded, in that
setting, that the agreement reached constituted agreement on
all of the terms that the parties themselves regarded as
essential...." Loppert v. Windsortech, Inc.,
865 A.2d 1282, 1285 (Del. Ch. 2004). The inquiry is an
objective one. Id. When the parties agree "the
contract should be formally drawn up and put in writing,
" the lack of a formal writing does not defeat the
contract absent "a positive agreement that it
should not be binding until so reduced to writing and
formally executed." Id. at 1287 (quoting
Universal Products Co. v. Emerson, 179 A. 387, 394
indicators demonstrate that a contract was made. First, the
August 8th email clearly demonstrates that TCS believed an
agreement had been reached. The August 8th agreement set out
the payment terms and a July 21st email set out the
boundaries of the license Callwave would offer TCS. (D.I.
660-1 at 2, 7). Intermediate emails demonstrated that the
terms from the July 21st email carried through and were part
of the agreement struck on August 8th. (See Id. at
2-6). For example, a July 22nd email thanked Callwave for
"agreeing to the terms, other than payment" and
confirming that the covenant not to sue would allow damages
to accrue. (Id. at 5). These emails used the
language of contract- "this formal offer"- and the
language of resolution-"my client accepts."
(Id. at 2, 8).
the stipulation filed with this court clearly indicates an
agreement had been reached. It represented to this Court that
the parties had "reached an agreement in
principle...." That stipulation evidences that Callwave
considered the matter settled and that Verizon, an interested
and close observer of the negotiations, did as well.
the tenor of the comments in the drafts reflect an effort to
memorialize an agreement already reached. Even if TCS's
characterization of the comments were correct, any revisions
and comments contradicting the agreement reached on August
8th would simply be requests for modification of the
points out there were open contract terms such as
assignability, notice, choice of law, and confidentiality.
(See id. at 7). Delaware law, however, explicitly
provides that "[a] settlement agreement is enforceable
if it contains all essential terms, even though it expressly
leaves other matters for future negotiation."
Loppert, 865 A.2d at 1289.
have found an enforceable contract existed on August 8th,
specific performance of that contract is the appropriate
remedy. Id. at 1289-90. The terms of the contract
include the agreement as memorialized in the emails of July
21, 22, and August 8. In the effort to reduce the contract to
writing in late August and early September, several
additional terms were agreed to by TCS and Callwave and are
also part of the ...