IP UPDATE
Exploring the latest in intellectual property law
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Exploring the latest in intellectual property law
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Late arrival: Fourth Circuit remands after mootness raised for first time on appeal

by | Jul 30, 2026 |

The US Court of Appeals for the Fourth Circuit remanded an insurance coverage dispute for the district court to determine whether settlement of the underlying lawsuit eliminated any concrete interest in the declaratory judgment action and rendered the case moot. Covington Specialty Insurance Company v. Omega Restaurant & Bar, LLC, Case No. 24-1364 (4th Cir. July 20, 2026) (Wilkinson, Wynn, Berner, JJ.)

Covington Specialty Insurance issued a commercial general liability policy to Omega Restaurant & Bar, which operated a nightclub in Virginia Beach, Virginia. The policy provided coverage for certain personal and advertising injuries.

In September 2020, several professional models sued Omega in Virginia state court, alleging that Omega used their images in advertisements without authorization. Omega removed the action to the US District Court for the Eastern District of Virginia.

In May 2021, Covington filed a separate action in the same district seeking a declaration that it had no duty to defend or indemnify Omega in connection with the models’ lawsuit. The parties filed cross-motions for summary judgment.

While the declaratory judgment action was pending, Omega settled the underlying lawsuit. Under the settlement, Omega consented to entry of a $155,000 judgment and assigned to the models its rights and claims against Covington under the insurance policy. The record did not show that Omega informed the district court presiding over the coverage action that the settlement had occurred.

The district court subsequently granted summary judgment for Covington and denied Omega’s cross-motion. The court found that the policy did not cover the injuries alleged in the underlying complaint and concluded that Covington had neither a duty to defend nor a duty to indemnify. Omega appealed.

Omega argued that the district court erred because the underlying complaint alleged conduct that potentially fell within the policy’s coverage. Covington responded by arguing for the first time that the settlement had rendered the dispute moot.

The Fourth Circuit explained that mootness is jurisdictional because Article III limits federal courts to deciding live cases and controversies. A case becomes moot when the parties no longer retain a legally cognizable interest in the outcome and the court cannot grant meaningful relief. The relevant inquiry is whether the parties retain any concrete interest, however small, in the litigation’s outcome.

Although Covington did not raise mootness until more than two years after the settlement, the Fourth Circuit explained that a jurisdictional objection cannot be waived or forfeited. The timing of the argument, however, left the appellate record insufficiently developed because the district court had never considered the effect of the settlement.

The record did not establish whether any cognizable interest remained in the coverage dispute or whether Covington had withdrawn or otherwise abandoned its defense of Omega in the underlying action. Without those facts, the Fourth Circuit could not determine whether the case remained live.

The Fourth Circuit therefore remanded for the district court to determine whether the settlement rendered the declaratory judgment action moot. It did not reach the merits of the coverage dispute and left Omega free [...]

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Heirs’ lights flicker out: Sixth Circuit affirms MillerKnoll’s Bubble Lamp rights

by | Jul 23, 2026 |

The US Court of Appeals for the Sixth Circuit affirmed summary judgment for the manufacturer of an iconic lamp design, finding that the designer’s heirs could not pursue trademark infringement and related tort claims based on the contractual transference of ownership and use of the intellectual property associated with the lamp. The Court concluded that the governing agreements authorized the manufacturer’s conduct and that the designer’s family later ratified the manufacturer’s ownership by accepting royalties with knowledge of its ownership claim. Nelson v. MillerKnoll, Inc., Case No. 25-1940 (6th Cir. July 7, 2026) (Boggs, Clay, Gilman, JJ.)

George Nelson, a prominent mid-century furniture designer, created the cloth-covered hanging fixtures known as the Bubble Lamp while serving as design director of Herman Miller, now MillerKnoll. George and Herman Miller did not enter into a formal written agreement addressing ownership of the Bubble Lamp’s intellectual property during the designer’s employment.

After George’s death, his widow, Jacqueline Nelson, entered into a 2006 agreement under which Herman Miller agreed to pay royalties on certain products designed by George. In 2015, while a related foundation was litigating against another company that had registered and sold Bubble Lamp trademarks, George’s son, Mico Nelson, executed an addendum on Jacqueline’s behalf. The addendum expanded the royalty arrangement to include “Nelson branded Lamp Products” and granted Herman Miller exclusive worldwide rights to manufacture, use, sell, and license those products.

Herman Miller later acquired the Bubble Lamp business and related trademark registrations, including two product-configuration marks and the BUBBLE LAMP word mark.

The Nelson family sued MillerKnoll, alleging that it had improperly obtained the Bubble Lamp’s intellectual property as part of a broader scheme to deprive the family of George’s rights. The complaint asserted federal and state trademark infringement, fraud, conspiracy, unjust enrichment, and cancellation of the trademark registrations. The district court granted summary judgment to MillerKnoll on all claims. The Nelson family appealed.

The principal issue on appeal was whether the 2006 agreement and 2015 addendum merely licensed MillerKnoll to use the Bubble Lamp’s intellectual property or also authorized MillerKnoll ownership of that intellectual property.

Applying Michigan contract law, the Sixth Circuit concluded that the agreements unambiguously granted MillerKnoll both ownership and use rights. Although the agreements referred to “Licensed Products,” that term was contractually defined to include products whose rights MillerKnoll owned. Other provisions granted MillerKnoll “exclusive right, title, and interest” in the covered designs and the sole right to enforce the associated proprietary rights.

That contractual authorization defeated the Nelson family’s Lanham Act claim. The Sixth Circuit explained that authorized use of a mark cannot support an infringement claim under § 43(a) because authorized conduct does not create the type of source confusion the statute is intended to prevent.

The same reasoning foreclosed the state-law trademark and tort claims. Because the agreements authorized MillerKnoll’s ownership and use of the Bubble Lamp’s intellectual property, the Nelson family could not recover for conduct to which it had consented.

The Sixth Circuit also concluded that Mico independently ratified MillerKnoll’s ownership. [...]

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Lanham Act vs. First Amendment: Clarifying the proper scope of commercial speech

by | Jul 23, 2026 |

The US Court of Appeals for the Tenth Circuit affirmed in part and reversed in part the dismissal of a false advertising complaint, clarifying that courts must take a “holistic” approach when determining whether challenged statements constitute commercial speech under the Lanham Act. KetoNatural Pet Foods, Inc. v. Hill’s Pet Nutrition, Inc., Case No. 24-3185 (10th Cir. July 14, 2026) (Tymkovich, Phillips, McHugh, JJ.)

KetoNatural Pet Foods sells grain-free pet food while Hill’s Pet Nutrition sells more traditional pet food containing grains. KetoNatural alleged that Hill’s lost sales and market share after KetoNatural and other nontraditional pet food companies entered the market. According to KetoNatural, Hill’s responded by working with veterinarians and nonprofit organizations to publicize false claims that boutique, exotic, and grain-free (BEG) diets are associated with an increased risk of dilated cardiomyopathy in dogs.

KetoNatural sued Hill’s for false advertising under the Lanham Act. To state a false advertising claim, a plaintiff must plausibly allege, among other elements, that the defendant made a false or misleading representation of fact in commercial advertising or promotion.

Hill’s moved to dismiss KetoNatural’s complaint. The district court granted the motion, finding that KetoNatural had not adequately alleged either that Hill’s engaged in commercial speech or that the challenged statements were false. KetoNatural appealed.

The Tenth Circuit concluded that KetoNatural plausibly stated a claim for false advertising based on some of the statements made by Hill’s on its website, but Hill’s was not vicariously liable for the statements made by certain veterinarians and nonprofit organizations. In drawing these conclusions, the Tenth Circuit relied on the Supreme Court’s 1983 decision in Bolger v. Youngs Drug Products Corporation, which enunciated three factors for determining whether speech is commercial in character:

  • It is an advertisement,
  • It references a specific product, and
  • It is made with economic motivation.

The Hill’s website stated that BEG diets were linked to a higher risk of canine heart disease without promoting any particular product. Although such statements did not constitute “a classic advertising campaign” and did not reference a specific product, they functionally served to promote Hill’s products given the company’s position as one of three dominant market players in the traditional dog food industry. And critically, Hill’s was clearly economically motivated to make such statements to regain its waning market share.

Furthermore, the Tenth Circuit found that KetoNatural had adequately alleged that these statements were false because, under the establishment claim doctrine, which had been adopted by other federal appellate courts, KetoNatural sufficiently pleaded that “the scientific studies” that Hill’s relied on did “not establish the assertion for which they are cited.”

By contrast, the Tenth Circuit concluded that Hill’s was not vicariously liable for the statements made by veterinarians and nonprofit organizations. According to the Court, the veterinarians and other third parties were too attenuated from Hill’s such that a reasonable inference could not be drawn that their statements were promoting Hill’s products. Moreover, the veterinarians and other third parties lacked an adequate economic motive. Importantly, KetoNatural [...]

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Who decides trademark strength: Judge or jury?

by | Jul 16, 2026 | ,

The Supreme Court granted certiorari to decide whether the strength of a trademark in a likelihood-of-confusion analysis under 15 U.S.C. § 1114 is a question of law for the court or a question of fact for the jury. RiseandShine Corp. v. PepsiCo, Inc., Case No. 24-1016 (Supr. Ct. June 29, 2026).

RiseandShine sued PepsiCo in the US District Court for the Southern District of New York, alleging that PepsiCo’s Mtn Dew Rise Energy drink infringed RiseandShine’s RISE marks for cold-brew coffee products. The district court granted RiseandShine a preliminary injunction, but the US Court of Appeals for the Second Circuit vacated and remanded.

The Second Circuit concluded that the district court erred in its analysis of the strength of the RISE marks and the similarity of the parties’ marks. Treating trademark strength as a question of law, the Second Circuit found that the RISE marks were weak because of the “strong logical associations between ‘Rise’ and coffee.” After reviewing images of the parties’ cans, the Second Circuit also concluded that the district court erred in finding PepsiCo’s mark confusingly similar to the RISE marks.

On remand, the district court entered summary judgment for PepsiCo, relying on the Second Circuit’s determination that the RISE marks were “inherently weak as a matter of law” and that the similarity factor “weigh[ed] strongly against” RiseandShine. The Second Circuit affirmed, reiterating that trademark strength is a question of law.

RiseandShine petitioned for certiorari, which the Supreme Court granted. The question presented is: Whether trademark strength is a question of fact in a likelihood-of-confusion analysis under 15 U.S.C. § 1114.



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Up in smoke: Eighth Circuit sends Lanham Act dispute to state court

by | Jun 25, 2026 |

The US Court of Appeals for the Eighth Circuit affirmed dismissal of a trademark dispute on forum non conveniens grounds, finding that the Lanham Act claims concerning ownership and scope of trademark rights arose out of a stock purchase agreement and therefore belonged in the state court designated by the parties’ forum selection clause. Vaughn Boyd v. Deadwood Tobacco Company, Case No. 25-1659 (8th Cir. June 8, 2026) (Smith, Kelly, Grasz, JJ.)

The dispute stemmed from the 2018 sale of Deadwood Tobacco, a South Dakota cigar business associated with the DEADWOOD family of marks. Prior to the sale, Deadwood Tobacco and Drew Estate had collaborated on a successful cigar line sold under names including Sweet Jane, Fat Bottom Betty, and Crazy Alice. The stock purchase agreement reserved trademark registrations associated with those three brands from the transaction. After acquiring the company, the new owners launched additional cigar products under other Deadwood Tobacco branding. Vaughn Boyd and Drew Estate (the sellers under the agreement) subsequently alleged that the new products infringed trademark rights they had retained under the agreement.

After the parties failed to reach a resolution, Boyd and Drew Estate filed suit under the Lanham Act in federal district court in Florida. The district court concluded that the asserted trademark claims arose out of the stock purchase agreement and therefore fell within the scope of the agreement’s South Dakota forum selection clause.

Following that dismissal, Deadwood filed a related contract suit in South Dakota state court and Boyd and Drew Estate countered with a Lanham Act claim in federal district court in South Dakota. The South Dakota district court likewise determined that the dispute arose from the agreement and that the forum selection clause was valid and mandatory. Boyd and Drew Estate appealed the district court decision.

On appeal, Boyd and Drew Estate argued that their claims arose exclusively under federal trademark law rather than contract law and therefore did not “arise out of” the agreement. They further contended that the forum selection clause was permissive rather than mandatory and could not divest federal courts of jurisdiction. Finally, they asserted that public policy favored adjudication of Lanham Act claims in federal court.

The Eighth Circuit rejected each argument. Beginning with trademark ownership, the Court emphasized that trademark rights are inseparable from the goodwill they represent. Because determining the scope of Boyd and Drew Estate’s retained trademark rights required analyzing what goodwill, if any, accompanied the reserved marks, resolution of the dispute necessarily depended on interpreting the stock purchase agreement. The Court therefore concluded that the trademark claims arose out of the agreement, notwithstanding that they were pleaded solely under the Lanham Act.

The Eighth Circuit also found that the forum selection clause was mandatory. The agreement provided that disputes arising out of the agreement “shall” be venued in Lawrence County, South Dakota, and that the Lawrence County circuit court “shall have jurisdiction.” Applying South Dakota law, the Eighth Circuit found the language unambiguously mandatory and concluded that the reference to [...]

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Hague Service Convention: A “closed universe” of permissible service methods

by | Jun 11, 2026 |

The US Court of Appeals for the Seventh Circuit reversed a district court decision denying a motion to vacate a default judgment for lack of proper service under the Hague Service Convention, finding that where the Convention applies, it provides the exclusive means of valid service and prohibits email service in China. Kangol LLC v. Hangzhou Chuanyue Silk Import & Export Co., Ltd., Case No. 25-2205 (7th Cir. May 29, 2026) (Kirsch, Jackson-Akiwumi, Pryor, JJ.)

Kangol sued several defendants, including Hangzhou, for trademark infringement, counterfeiting, unfair competition, false designation of origin, and trademark dilution. Kangol moved for a temporary restraining order (TRO) and permission to serve Hangzhou by email, which the district court approved. Kangol sent an email to Hangzhou that included a link to the complaint, TRO, and additional documents, after which the parties engaged in settlement discussions.

Because Hangzhou did not appear before the district court, the court entered default judgment in favor of Kangol. Subsequently, Hangzhou filed a motion to vacate the default judgment, arguing that the judgment was void under Federal Rule of Civil Procedure 60(b)(4) because the Hague Service Convention does not permit service by email in China. The district court denied the motion, concluding that the Convention allows service by email in China. Hangzhou appealed.

Hangzhou argued that the judgment was void under Rule 60(b)(4) for lack of personal jurisdiction because email service violated the Convention. The Seventh Circuit reviewed the issue de novo and analyzed whether the Convention applied, and if so, whether it prohibits email service in China.

Before reaching the merits, the Seventh Circuit rejected Kangol’s arguments that Hangzhou had waived its service objection and that its motion to vacate was untimely. The Court explained that Hangzhou’s participation in settlement discussions did not create a reasonable expectation that it would defend the suit on the merits or otherwise constitute waiver of its jurisdictional objections. The Court also found that Hangzhou’s Rule 60(b)(4) motion was filed within a reasonable time under Federal Rule of Civil Procedure 60(c)(1), noting that Hangzhou sought relief shortly after Kangol successfully enforced a portion of the default judgment by collecting funds from one of Hangzhou’s online accounts.

Kangol argued that the Hague Service Convention did not apply because Article 1 excludes cases in which the address of the person to be served is not known, and Kangol maintained that Hangzhou’s address could not be reliably determined despite Kangol’s efforts to do so. In evaluating whether a defendant’s address is “not known,” district courts generally require plaintiffs to undertake reasonably diligent efforts to ascertain the defendant’s mailing address. The district court, however, did not determine whether Kangol’s efforts satisfied that standard, concluding instead that it need not resolve the Convention’s applicability because, even if the Convention applied, it permitted service by email in China.

The Seventh Circuit first analyzed the text and structure of the Hague Service Convention, relying on Supreme Court precedent (including Société Nationale Industrielle Aérospatiale v. US District Court for the Southern District of Iowa [...]

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Shocking: Fifth Circuit affirms disgorgement award based on willful infringement

by | May 21, 2026 |

The US Court of Appeals for the Fifth Circuit affirmed a finding of trademark infringement and unfair competition under the Lanham Act and Texas law, upholding an award of profits based on willful infringement. The Court vacated and remanded the permanent injunction as overbroad, however. Trojan Battery Co., L.L.C. v. Golf Carts of Cypress, L.L.C., Case No. 25-20243 (5th Cir. May 8, 2026) (Jones, Barksdale, Stewart, JJ.)

Trojan Battery has sold deep-cycle batteries, including batteries commonly used in golf carts, under the TROJAN mark for decades. It owns multiple federal registrations covering the Trojan name and related marks, including TROJAN for use on electric storage batteries; TROJAN BATTERY SALES for use in connection with retail and wholesale store services and wholesale distributorships; and the following graphic mark for use on electric storage batteries, deep-cycle electric storage batteries, and lithium-ion batteries:trojan-battery-company-logo

Golf Carts of Cypress (GCC) and Trojan EV (collectively, defendants), both owned by Federico Nell, entered the golf cart market between 2019 and 2020. Trojan EV marketed carts under the “Trojan-EV” name, and GCC sold those carts (bearing the below logo mark) alongside carts containing authentic TROJAN batteries.

Trojan Battery sued for trademark infringement and unfair competition. Following a five-day bench trial, the district court found liability, awarded disgorgement of defendants’ profits, and entered a permanent injunction. Defendants appealed.

Defendants challenged the district court’s likelihood-of-confusion analysis. The Fifth Circuit rejected that challenge, emphasizing that the district court did not clearly err in concluding that confusion was likely under the Fifth Circuit’s multifactor test. The Fifth Circuit acknowledged that the district court overstated the evidence of actual confusion. A single misdirected inquiry and several additional instances over more than two years were insufficient, standing alone, to show meaningful marketplace confusion. Nonetheless, the absence of convincing evidence on that factor was not dispositive.

Critically, the Fifth Circuit upheld the district court’s finding of intent. The trial court discredited Nell’s testimony that he was unaware of Trojan Battery’s marks and reasonably inferred that defendants adopted TROJAN-EV to capitalize on the senior mark’s goodwill. That finding weighed heavily in favor of confusion and supported the ultimate liability determination. Considering the record as a whole, the Court concluded that most factors favored Trojan Battery and affirmed the infringement finding.

The Fifth Circuit also affirmed the award of defendants’ profits. Applying the Lanham Act’s equitable framework, the Court found no abuse of discretion in awarding disgorgement as a deterrent against willful infringement. The Fifth Circuit endorsed the district court’s use of the Lanham Act’s burden-shifting approach to calculate profits, under which the plaintiff establishes gross sales and the defendant bears the burden of proving deductible expenses. Given the finding of willful infringement, the Court agreed that disgorgement was an appropriate remedy, particularly where injunctive relief alone might not deter future misconduct.

The Fifth Circuit reached a different conclusion as to the permanent injunction. Although injunctive relief [...]

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Personal jurisdiction: Are cease-and-desist letters enough?

by | Apr 30, 2026 |

In a decision clarifying how certain pre litigation enforcement efforts can establish personal jurisdiction, the US Court of Appeals for the Eleventh Circuit reversed the dismissal of Lanham Act and tortious interference claims for lack of personal jurisdiction, concluding that cease and desist letters sent into the jurisdiction satisfied the minimum contacts requirement and did not offend due process. Frida Kahlo Corporation v. Mara Cristina Teresa Romeo Pinedo, Case No. 24-10293 (11th Cir. Apr. 17, 2026) (Luck, Lagoa, Abudu, JJ.)

Frida Kahlo and Frida Kahlo Investments (collectively, Kahlo) manage and license a portfolio of trademarks and publicity rights associated with the artist Frida Kahlo. Kahlo sued Familia Kahlo and Mara Cristina Teresa Romeo Pinedo (collectively, Pinedo) alleging tortious interference and Lanham Act violations arising from Pinedo’s efforts to halt a traveling Frida Kahlo exhibition and related merchandise.

Central to the dispute were cease and desist letters sent by Pinedo to Kahlo’s Florida based business partners. The letters asserted that Pinedo held superior rights to Frida Kahlo’s name, likeness, and trademarks and threatened legal action if the recipients continued their involvement with Kahlo. Kahlo alleged those claims were false and caused business partners to withdraw or hesitate, disrupting Kahlo’s licensing relationships.

Kahlo filed suit in Florida. Pinedo moved to dismiss for lack of personal jurisdiction. The district court granted the motion, concluding that Florida’s corporate shield doctrine protected Pinedo from jurisdiction and that, in any event, Pinedo lacked sufficient minimum contacts with Florida. Kahlo appealed.

The Eleventh Circuit reversed, concluding first that the corporate shield doctrine did not bar jurisdiction over Pinedo. The Court focused on the language of the cease and desist letters, which expressly identified Pinedo as the “heiress of the painter Frida Kahlo” and stated that the letters were sent “in our capacity as representatives of Mara Cristina Teresa Romeo Pinedo.” The Court found that those representations showed that Maria Pinedo was acting in her personal capacity, not merely as a corporate agent. As a result, the corporate shield doctrine, which can protect corporate officers from jurisdiction based solely on acts performed for a corporation, did not apply. Because the doctrine was inapplicable, Pinedo was subject to Florida’s long arm statute, which permits jurisdiction where a nonresident commits a tortious act outside the state that causes injury within Florida.

The Eleventh Circuit next addressed whether exercising specific personal jurisdiction would comport with due process. The Court answered in the affirmative, explaining that Pinedo intentionally directed conduct into Florida by sending cease and desist letters to Florida entities. The alleged tortious interference claims arose directly from those communications, satisfying the relatedness requirement for specific jurisdiction.

The Eleventh Circuit also found purposeful availment because Pinedo plausibly alleged an intentional tort, the letters were expressly sent to Florida entities, and it was reasonable for Pinedo to anticipate having to defend itself in Florida based on its actions.

Finally, the Eleventh Circuit concluded that Pinedo failed to make a compelling case that exercising jurisdiction would violate traditional notions of fair play and [...]

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“X” marks the spot: A single DuPont factor may be dispositive

by | Apr 16, 2026 |

The US Court of Appeals for the Federal Circuit affirmed dismissal of a trademark opposition, concluding that a single DuPont factor may be sufficient on its own to support a finding of no likelihood of confusion. Fuente Mktg. Ltd. v. Vaporous Techs., LLC, Case No. 24-1460 (Fed. Cir. April 8, 2026) (Prost, Taranto, Hughes, JJ.)

Fuente Marketing and Vaporous Technologies both sell smoking related products. Fuente owns two standard character trademark registrations for the letter “X,” used in connection with cigars and related accessories. Vaporous sought to register a highly stylized design mark for use with its vaping products. The parties stipulated that Vaporous’ mark consisted of “an abstract stick figure consisting of two diagonal intersecting lines in the shape of a wide stylized letter ‘X’ with a shaded circle above.”

Fuente opposed the application at the Trademark Trial and Appeal Board (TTAB), arguing that Vaporous’ mark was likely to cause confusion with Fuente’s “X” marks. Applying the DuPont factors, the Trademark Trial & Appeal Board dismissed the opposition, concluding that there was no likelihood of confusion. Fuente appealed.

The Federal Circuit reviewed the Board’s factual findings for substantial evidence and its ultimate likelihood of confusion determination de novo. Fuente challenged the Board’s analysis of two DuPont factors and argued that the Board improperly weighed the factors as a whole.

The Federal Circuit focused on the first DuPont factor, which evaluates the similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression. The court found that substantial evidence supported the Board’s finding that this factor weighed heavily against a likelihood of confusion. The Federal Circuit agreed that consumers were more likely to perceive Vaporous’ mark as a stylized stick figure rather than the letter “X.” Unlike Fuente’s standard character mark, Vaporous’ design mark did not sound like the letter “X” as it had no pronunciation, and it incorporated prominent visual features – including a shaded circle comprising roughly one fifth of the mark – that were “not a minor or unnoticeable feature.”

Although the Board found that the remaining DuPont factors were neutral or favored Fuente, the Federal Circuit explained that it could “discern the Board’s path to dismissal” and affirmed the conclusion that in a case like this one DuPont factor was sufficient to establish dissimilarity between the marks. The Court emphasized that a likelihood of confusion analysis is a balancing test, and no minimum number of factors must favor one party.

Practice note: This decision reinforces that a single DuPont factor, particularly the dissimilarity of the marks, may be dispositive of likelihood of confusion. Parties should not assume that favorable findings on other factors can overcome a clear lack of similarity in appearance, sound, connotation, or commercial impression.



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Settled means settled: Broad settlement release equates to res judicata

by | Apr 16, 2026 |

The US Court of Appeals for the Fourth Circuit affirmed a summary judgment decision, concluding that an intellectual property owner’s claims were barred by the scope of a settlement agreement resolving earlier state court litigation between the parties. Clear Touch Interactive, Inc. v. The Ockers Co. et al., Nos. 25-1304, 25-1374 (4th Cir. Apr. 1, 2026) (Wynn, Harris, JJ.) (Rushing, J. concurring in part and dissenting in part).

Clear Touch, a designer and manufacturer of interactive technology products, entered into exclusive reseller agreements with information and communications technology reseller Ockers in 2014. After Clear Touch revoked Ockers’ exclusivity in 2017, Ockers began developing a competing product called TouchView. Clear Touch terminated Ockers as a reseller in 2019. The following year, Ockers filed suit in South Carolina state court alleging breach of contract and asserting various tort, trade secret, defamation, and civil conspiracy claims.

In June 2021, the parties resolved the state court action through a settlement agreement that dismissed the case with prejudice and included a broad mutual release of all claims and counterclaims – known or unknown – that were brought or could have been brought and that arose out of or related to the subject matter of the lawsuit.

Despite that settlement, Clear Touch filed a federal action one month later against Ockers, two of its officers (John J. Houser and Jason Houser), and TouchView Interactive, asserting claims for trademark infringement, trade secret misappropriation, and unfair competition based on the TouchView product. The defendants moved for judgment on the pleadings, arguing that the settlement agreement and the state court’s dismissal with prejudice barred Clear Touch’s claims.

The district court initially allowed some claims to proceed, including certain Lanham Act claims and claims against TouchView Interactive, but dismissed the remainder. After discovery, however, the court revisited the preclusion issue and granted summary judgment to Ockers and its officers, concluding that all of Clear Touch’s remaining claims were barred by res judicata. The district court also granted summary judgment to TouchView Interactive, finding it to be a shell entity with no commercial activity. Following a jury verdict in favor of Ockers, Clear Touch appealed.

Clear Touch challenged the district court’s res judicata determination, arguing both substantive error and procedural error under Rule 54(b). The Fourth Circuit rejected both arguments. Substantively, the Fourth Circuit held that Clear Touch failed to create a genuine dispute regarding the settlement agreement’s plain language or the parties’ mutual intent to release all claims, including those that could have been brought, arising from the same operative facts. Even when viewed in the light most favorable to Clear Touch, the federal claims were precluded because they could have been asserted as counterclaims in the prior state court action, which had been dismissed with prejudice.

Procedurally, the Fourth Circuit found no abuse of discretion in the district court’s decision to revisit its earlier rulings. Rule 54(b) permits revision of nonfinal orders when new evidence emerges or a legal error becomes apparent. Here, supplemental evidence showed that Clear Touch [...]

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