Settlement Agreement Precludes Appellate Jurisdiction

In Silicon Image, Inc. v. Genesis Microchip Inc., et al. (Fed. Cir. January 28, 2005), the case was resolved by the parties executing a settlement agreement embodied in a Memorandum of Understanding. The district court incorporated the terms of the MOU into its final order, ostensibly disposing of the case. The Order required Silicon to certify that it received the payment stipulated by the terms of the MOU as a precondition to the dismissal, with prejudice, of the underlying infringement cause of action.

In anlayzing whether this was a final judgment sufficient to provide appellate jusrisdiction, the Federal Circuit noted that the district court explicitly required Silicon to certify that it had received certain payments from Genesis, because the bargain embodied by the MOU made a dismissal with prejudice of Silicon’s patent infringement claims consideration for providing the agreed upon settlement amount and royalty payments. Once the district court determined that this was the bargain entered into by the parties, it was powerless to order a dismissal with prejudice of Silicon’s infringement claims until the parties complied with the terms of the agreement. By stipulating that dismissal could not be entered until the payment was received, Genesis foreclosed alternative solutions.

"In this case, the parties were the architects of their own settlement structure.
However unfortunate their choices in designing their settlement agreement, these
choices may not now be unilaterally undone by a court. Once the district court
determined that the MOU was an enforceable agreement and that it would not be
necessary to resume a full trial on the merits of the case, there were only
limited avenues to establish a basis for appeal, namely, by interlocutory or
final judgment."

"Genesis could have sought permission under 28 U.S.C. § 1292(b) and (c)(1) to immediately appeal the interlocutory judgment and order of the district court, or Genesis could have made the required payment pursuant to the MOU with the appropriate certification of receipt by Silicon. None of these avenues was followed, therefore there is no interlocutory or final judgment from which an appeal can be taken. Since under 28 U.S.C. § 1295(a)(1) this Court cannot review a decision by a district court that is not final, we dismiss this case for lack of jurisdiction. "