Phoenix, AZ. The U.S. District Court for the District of Arizona issued a ruling in favor of Nixon Peabody client, Ulta-Lit Tree Company, finding that defendant Simple Living Solutions LLC materially breached the parties’ binding settlement term sheet by failing to enter into a final settlement in accordance with the term sheet.
This victory comes after nearly three years of litigation seeking to enforce Ulta-Lit’s patent covering an innovative tool kit that diagnoses and repairs issues with miniature LED lights often found on holiday decorations. Along the way, Nixon Peabody secured several victories for Ulta-Lit, including favorable rulings on claim construction and the imposition of discovery sanctions against the defendant.
“Our relationship with Nixon Peabody began more than 20 years ago when we partnered with the firm’s IP attorneys to help us to assemble a strong patent portfolio for light set repair tools that are the core of our business,” said John DeCosmo, president of Ulta-Lit Tree Company. “When our hard work in the market was interrupted due to IP infringement, Nixon Peabody rose to the occasion to successfully litigate and defend the very patents they wrote. We survived the ultimate stress test.”
In November 2021, the parties entered into a binding term sheet that outlined material terms to be included in a formal settlement agreement to resolve the litigation. However, the defendant refused to include material terms specified in the term sheet in the ultimate settlement agreement, which forced Ulta-Lit to file a motion to enforce the settlement sheet in January 2022.
Following an evidentiary hearing in June 2022, Judge Diane H. Humetewa ruled that the “[d]efendant materially breached the November 2021 Term Sheet.” As part of the ruling, the court authorized Ulta-Lit to seek recovery of its attorneys’ fees and costs in connection with bringing its motion to enforce the binding term sheet. The court’s quick ruling led to a favorable settlement for Ulta-Lit.
“The infringement of Ulta-Lit’s patent was an existential threat to their thriving business,” said Nixon Peabody intellectual property partner Justin Swindells, who led the litigation team for Ulta-Lit. “We are very pleased with the court’s decision, which not only continues to protect Ulta-Lit’s ground-breaking business and vital intellectual property rights but also upholds the settlement sheet’s terms to grant attorney fees to the prevailing party in a dispute connected to the term sheet.”
In addition to Swindells, the Nixon Peabody team included Chicago intellectual property associate Angelo Christopher.
