Clear Touch Interactive, a designer and manufacturer of interactive technology products, had entered into reseller agreements with The Ockers Company beginning in 2014, granting Ockers exclusive rights to sell Clear Touch panels in designated territories. After Clear Touch revoked Ockers's exclusivity rights in 2017, Ockers developed a competing "TouchView" product, prompting Clear Touch to terminate the reseller relationship in 2019.
Judge Wynn wrote that the parties' settlement agreement contained broad dismissal language requiring dismissal "with prejudice all possible claims and counterclaims that have or could have been brought against any Party as part of the Litigation." The court distinguished this dismissal provision from the narrower release language, noting that Clear Touch's intellectual property claims "could have been brought as a counterclaim in the state-court litigation" since state courts have concurrent jurisdiction over Lanham Act claims.
The case arose after Ockers sued Clear Touch in South Carolina state court for breach of contract in 2020, which the parties settled in June 2021. Despite signing the settlement agreement, Clear Touch filed federal trademark infringement claims against Ockers just weeks later, leading to the res judicata dispute that culminated in Magistrate Judge Kevin McDonald's summary judgment ruling dismissing Clear Touch's claims on the eve of trial.
The decision underscores the importance of carefully crafted settlement language, particularly the distinction between release provisions covering past claims and dismissal provisions covering potential future litigation. Judge Rushing dissented in part, arguing the settlement should not bar trademark claims based on post-settlement infringing conduct, since such claims "obviously could not have been brought as part of the settled litigation."