$30,000 On His Signature Only

Submitted by patentadmin on Mon, 04/12/2010 - 11:13

If you change your mind about an agreed settlement and refuse to sign the settlement document, you’re not bound by the settlement agreement, right? Wrong! (MedPointe Healthcare v. Walter Kozachuk)

MedPointe claimed ownership of certain patent applications filed by Kozachuk, a former employee. During a mediation, the parties reached agreement that Kozachuk would assign the patent applications to MedPointe and receive $60,000 in exchange. The mediator, a magistrate judge, put the agreement “on the record.” However, Kozachuk then refused to execute the settlement agreement, claiming he had been inadequately represented during the settlement negotiations.

The district court went ahead anyway, enforcing the unsigned agreement and assessing $30,000 in sanctions against Kozachuk. Under New Jersey state law, a contract is formed when the parties agree on the “essential terms” and it is enforceable “regardless whether it has been reduced to writing.”

The Court discounted Kozachuk’s complaint of inadequate representation, “[i]n light of [his] high level of education, his obvious familiarity with the litigation process, and his failure to express any lack of understanding except after the fact…”

THE LESSON TO BE LEARNED: Be careful what you agree to, even if you’re not in New Jersey.

Add new comment