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ZippySack LLC v. Ontel Products Corp.

United States District Court for the Northern District of Illinois
182 F. Supp.3d 867 (2016)


Facts

ZippySack LLC and its licensee LF Centennial Limited (together, ZippySack) (plaintiffs) patented a specialty bedsheet that children zip up instead of making the bed. ZippySack sued Ontel Products Corp. (defendant) for patent infringement based on a similar product called ZipIt Friends. The parties entered a settlement and agreed to dismissal of the lawsuit with prejudice. The settlement agreement allowed Ontel to sell off approximately 80,000 ZipIt Friends, which Ontel believed was the amount remaining in its inventory. Shortly after dismissal, Ontel discovered that its estimate inadvertently excluded mail-order inventory, which it tracked separately from its retail inventory. Ontel advised ZippySack that it actually had 119,432 units remaining and would continue to sell off that amount in accordance with the terms of the settlement. ZippySack did not accept the increased amount as a reasonable modification and filed a second lawsuit for breach of the settlement. Ontel asserted unilateral mistake in defense. ZippySack moved to enforce the settlement agreement as written.

Rule of Law

Issue

Holding and Reasoning (Leinenweber, J.)

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