Judge Won’t Approve Emails as Settlement

HOUSTON (CN) - Emails are insufficient to create a binding settlement when the agreement requires both parties' signatures to become effective, a federal judge ruled in denying a company's motion to dismiss a patent infringement claim against it.

TechRadium sued 11 companies, including SwiftReach Networks Inc., for infringing on a patent for a mass notification system that allows users to send a message out to group members via multiple methods of communication.

SwiftReach moved to dismiss on the basis that it had reached a settlement and license agreement with TechRadium.

The parties' lawyers exchanged a series of emails in March to work out the proposed settlement, and after SwiftReach's president signed the deal it was e-mailed to TechRadium's counsel, who promised to forward the document for signature.

TechRadium's lawyer explicitly stated in a subsequent email that they were not guaranteeing or representing that TechRadium would sign the deal, and in a later email blamed the delayed signing on TechRadium's changing law firms.

TechRadium's lawyer informed SwiftReach's counsel that their client would not sign the agreement on June 6.

SwiftReach then moved to dismiss TechRadium's infringement claim, arguing that the agreement is enforceable. While TechRadium argued that the deal is not enforceable without one of its representatives' signatures.

U.S. District Lee Rosenthal sided with TechRadium in her July 12 ruling.

Rosenthal cited Rule 11 of the Texas Rules of Civil Procedure that states under Texas law no agreement between attorneys or parties is enforceable unless it is in writing, signed and filed with papers as part of the record, or unless it is made in open court and entered into the record.

"For an oral argument to be enforceable, the parties must read and agree to the terms in open court," Rosenthal wrote.

Because TechRadium and SwiftReach's agreement required the signature of both parties to become effective, and did not provide acceptance other than by signature the emails were not enough to create a binding settlement agreement, Rosenthal concluded.

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