Clear Touch Interactive Inc. designs and manufactures interactive technology products and had entered into reseller agreements with The Ockers Company starting in 2014, granting Ockers exclusive rights to sell Clear Touch panels in designated territories. After Clear Touch revoked Ockers' exclusivity in 2017, Ockers owner John Houser and his son developed a competing product called "TouchView," prompting Clear Touch to terminate the reseller relationship in 2019.
Writing for the majority, Judge James A. Wynn Jr. found that the parties' settlement agreement contained broad dismissal language that covered Clear Touch's intellectual property claims even though they weren't covered by the agreement's narrower release provision. "The dismissal language sheds the requirement of the release that the counterclaims 'aris[e] out of or relat[e] to the subject matter of the Litigation,'" Wynn wrote, noting that the parties agreed to dismiss "all possible counterclaims that could have been brought" in state court, which included the federal trademark claims.
The case arose after Ockers sued Clear Touch in South Carolina state court in 2020 for breach of contract and other claims, which the parties settled in June 2021. However, just three weeks after signing the settlement agreement, Clear Touch sent a trademark infringement notice to Houser and filed federal court claims in July 2021. The district court initially allowed some claims to proceed but reversed course on the eve of trial in November 2024 after reviewing additional evidence about the parties' intent.
The ruling could have broader significance for settlement negotiations in intellectual property disputes, particularly regarding the scope of dismissal language versus release provisions. Judge Stephanie Rushing wrote a partial dissent, arguing that trademark infringement claims based on conduct occurring after the settlement agreement should not have been barred since those claims "could not have been brought as part of the settled litigation."