Handwritten Dismissal of All Possible Counterclaims in a Prior Settlement Precluded Later Asserted Intellectual Property Claims

Abstract

In Clear Touch Interactive, Inc. v. The Ockers Co., No. 2025-1304 (4th Cir. Apr. 1, 2026), the Fourth Circuit affirmed a district court’s judgment against Clear Touch Interactive, Inc., a manufacturer of interactive display panels, holding that its intellectual property claims against a former reseller, The Ockers Company, were barred by a prior settlement agreement. The agreement’s handwritten dismissal of “all possible claims and counterclaims” between the parties precluded the later filed trademark and trade secret claims including claims based on activities occurring after the settlement agreement.

Background and the District Court Decision

Ockers once operated as Clear Touch’s exclusive reseller within certain territories, selling and servicing Clear Touch’s interactive display panels. The relationship deteriorated after Clear Touch revoked Ockers’s exclusivity in 2017. Ockers then developed a competing product, which it called “TouchView,” before Clear Touch terminated Ockers’s reseller status in 2019.

Shortly thereafter, Ockers sued Clear Touch in state court, asserting a breach of the reseller agreement, trade secret violations, and other related business torts. During that litigation, Clear Touch indicated it would assert counterclaims for intellectual property infringement, but it never filed them.

After mediation, the parties settled their dispute. Two settlement provisions became important:

• The “Release Clause,” which provided that Clear Touch would: “release and discharge [Ockers and its affiliates] of and from any and all claims … and causes of action of every kind and nature whatever, arising out of or relating to the subject matter of the Litigation prior to the Effective Date of this Agreement, known and unknown.”
• The “Dismissal Clause,” which provided that the parties would: “jointly file a stipulation of dismissal … dismissing with prejudice all possible claims and counterclaims that have or could have been brought against any Party as part of the Litigation.”

Clear Touch, however, refused to sign a dismissal of all counterclaims in state court. Ockers moved to enforce the settlement agreement and compel Clear Touch to sign. While that motion was pending, Clear Touch sued Ockers in federal court, asserting trademark infringement, trade secret misappropriation, and unfair competition.

The state court ruled in Ockers’s favor and entered an order dismissing the state-court action with prejudice, “including all possible claims and counterclaims that have or could have been brought against any Party as part of this action.” With that decision in hand, Ockers responded in the federal action, arguing that the prior settlement agreement’s release and dismissal of “all possible counterclaims” barred Clear Touch’s IP claims.

The federal district court partially agreed, dismissing several contract and business tort claims.  But it permitted certain claims, including trademark claims, to proceed.

Shortly before trial, after the close of discovery, the court revisited the issue and ruled in Ockers’s favor, concluding that all of Clear Touch’s claims were barred. The court cited new evidence that established Clear Touch knew about Ockers’s use of the “TouchView” name before signing the settlement agreement and actually had expressed an intent to assert intellectual property counterclaims in the earlier case. Thus, all of Clear Touch’s claims were barred by the prior agreement.

Clear Touch appealed.

Fourth Circuit Appeal

The central issue on appeal concerned whether the settlement agreement barred Clear Touch’s federal claims. Because the prior judgment stemmed from a settlement agreement, the court looked to the parties’ intent in reaching that agreement to determine whether the later-filed claims should be barred.

In doing so, the court distinguished between the agreement’s Release Clause and the broader Dismissal Clause. It noted that the Release Clause did not cover Clear Touch’s pending claims. It only covered claims tied to the subject matter of the earlier dispute and limited to claims arising before the settlement agreement’s effective date.

The Dismissal Clause did not include the same subject-matter or timing limitations. Instead, it covered all possible claims and counterclaims that “have or could have been brought.” The court found that the expanded scope of the Dismissal Clause confirmed the parties’ intent to dismiss all possible counterclaims that could have been brought in the prior litigation, including the IP claims Clear Touch later asserted.

That conclusion was further supported by the context of the agreement. Indeed, after Ockers learned that Clear Touch was contemplating federal intellectual property counterclaims, it included this broad dismissal language as a last-minute handwritten modification to the settlement agreement, thus signaling its intent to bar Clear Touch from bringing these exact types of claims.

The Fourth Circuit decision also included a partial dissent, arguing that at least some of Clear Touch’s trademark infringement claims should not be barred. Specifically, the dissent noted that due to Ockers’s ongoing use of the mark, Clear Touch alleged infringement occurred after the date of the settlement agreement, thus falling outside of the temporal language of the Release Clause (releasing claims “prior to the Effective Date”) and the Dismissal Clause (dismissing claims “that have or could have been brought”).

Strategy and Conclusion

This case shows that one clause can expand an agreement beyond the stated release. Indeed, a dismissal with prejudice clause can be far broader than a stated release clause. Here, the Fourth Circuit’s decision turned on the parties’ intent in the settlement agreement, noting differences between clauses and the context of a last-minute handwritten provision, and ultimately barred later-filed intellectual property claims. Therefore, contract drafters should be sure to take consistent position among similar clauses and pay close attention to last-minute changes or handwritten edits that may broaden the scope of their agreements.

Further Information

For further information, see the Court’s full decision here.