Clear Touch Interactive, Inc. v. The Ockers Company
The Fourth Circuit affirmed the district court's grant of summary judgment dismissing Clear Touch Interactive's trademark infringement and unfair competition claims against The Ockers Company and related defendants on res judicata grounds following a prior state-court settlement. After Clear Touch sued Ockers in federal court for Lanham Act § 32 and § 43(a) violations based on Ockers' use of the "TouchView" mark, the district court initially allowed the claims to proceed, finding that the parties' settlement agreement release language—covering claims "arising out of or relating to the subject matter" of prior state litigation—did not bar federal intellectual property claims. On the eve of trial, however, the district court reversed course under Rule 54(b), granting summary judgment to defendants based on separate dismissal language in the settlement requiring the parties to dismiss "all possible claims and counterclaims that have or could have been brought" in the state action. The Fourth Circuit affirmed, holding that Clear Touch's infringement claims fell within the dismissal provision's scope because state courts have concurrent Lanham Act jurisdiction and South Carolina's permissive counterclaim rules would have allowed Clear Touch to assert these claims in the original breach-of-contract litigation, regardless of relatedness to the reseller agreement dispute.
The decision turns on contract interpretation principles requiring courts to give distinct meanings to separate settlement provisions and enforcing parties' demonstrated intent. The court rejected Clear Touch's argument that the release provision's temporal limitation to pre-settlement conduct should be read into the dismissal language, finding South Carolina law required giving independent effect to the handwritten "all possible claims and counterclaims" modification added during mediation. Critical to the court's analysis was evidence that Clear Touch had told Ockers' counsel it intended to assert intellectual property counterclaims in state court and that Clear Touch's CEO knew of the TouchView mark before settlement, establishing the claims "could have been brought" in the prior action even though Clear Touch alleged ongoing post-settlement infringement. The court also affirmed the district court's exercise of Rule 54(b) authority to revise its interlocutory summary judgment ruling based on "substantially different evidence"—the CEO's deposition and live testimony from Ockers' counsel about Clear Touch's stated intent—applying the less stringent standard for reconsidering non-final orders compared to Rule 59(e) or 60(b) motions. Judge Rushing dissented, arguing the dismissal language should not bar claims accruing after the settlement's effective date.