“All Possible Claims and Counterclaims” Dismissal in a Settlement Precludes Later Federal Lanham Act Suits, and May Be Enforced via Rule 54(b) Reconsideration

I. Introduction

Clear Touch Interactive, Inc. v. The Ockers Company (4th Cir. Apr. 1, 2026) is a settlement-preclusion case with major consequences for IP litigants who settle one dispute and then attempt to pursue trademark claims in a second forum. Ockers sued Clear Touch in South Carolina state court over reseller agreements. The parties settled and agreed—critically—not only to execute a mutual release, but also to file a dismissal “with prejudice” of “all possible claims and counterclaims that have or could have been brought … as part of the Litigation.” Within weeks, Clear Touch filed a federal lawsuit asserting Lanham Act and related claims arising from Ockers’s use of “TouchView.”

The central issues on appeal were: (1) whether the state-court settlement/dismissal had res judicata effect barring Clear Touch’s later federal IP claims; (2) whether the district court properly used Rule 54(b) to reverse its earlier interlocutory view on the eve of trial; and (3) several trial-management rulings (shell-entity liability, witness exclusion/inclusion, and post-verdict motions).

II. Summary of the Opinion

The Fourth Circuit affirmed across the board. It held:

  • TouchView Interactive, Inc. (the corporation) obtained summary judgment because the record showed it was a “mere shell” with no assets, employees, or commercial activity, and Clear Touch’s evidence showed only brand usage by Ockers rather than infringing conduct by the corporate entity.
  • Clear Touch’s federal IP claims were barred by res judicata based on the settlement’s distinct dismissal clause requiring dismissal “with prejudice” of “all possible claims and counterclaims … [that] could have been brought” in the state litigation—language broader than the separate release clause.
  • Rule 54(b) reconsideration was procedurally proper because the district court could revise nonfinal orders upon substantially different evidence and/or clear error causing manifest injustice.
  • The district court did not abuse its discretion on the motions in limine (excluding a late-disclosed witness and allowing former counsel to testify after withdrawing as trial advocate), and it properly denied JMOL, a new trial, and remittitur challenges.

Judge Rushing concurred in part and dissented in part, arguing that claims based on post-settlement infringement acts “obviously could not have been brought” in the earlier litigation, and thus should not be barred by the “could have been brought” dismissal language.

III. Analysis

A. Precedents Cited

1. The modified res judicata framework for settlements

The court treated this as a classic “settlement preclusion” case: the ordinary claim-preclusion analysis is “modified” when the earlier action ends via a settlement/release. Relying on U.S. ex rel. May v. Purdue Pharma L.P., the court emphasized that preclusion attaches to “the matters specified in the settlement agreement,” quoting Norfolk S. Corp. v. Chevron, U.S.A., Inc.. It then applied Keith v. Aldridge for the governing principle: the “preclusive effect … is determined by the intent of the parties.”

For the baseline res judicata elements, the court cited SAS Inst., Inc. v. World Programming Ltd. (final judgment, identity of cause of action, identity of parties/privies), but stressed that, in settlement-dismissal cases, the settlement’s text and intent are the real battleground.

2. Concurrent jurisdiction and “could have been brought” counterclaims

To show the Lanham Act claims fit within “all possible … counterclaims … [that] could have been brought,” the court relied on:

  • Riley v. Dozier Internet L., PC, confirming state courts have concurrent jurisdiction over Lanham Act claims.
  • South Carolina’s permissive counterclaim rule (S.C.R. Civ. P. 13(b)) permitting unrelated counterclaims—supporting the court’s conclusion that Clear Touch’s IP claims were “possible” counterclaims even if not arising from the reseller-contract dispute.

3. Ongoing infringement and accrual principles

Clear Touch alleged “ongoing” infringement. The court referenced Lyons P'ship, L.P. v. Morris Costumes, Inc. for the proposition that each infringing act is a distinct violation for accrual purposes. But it treated that doctrine as subordinate to party intent: the settlement’s dismissal clause lacked the release’s temporal limitation, and the court read that drafting choice to encompass ongoing infringement claims that “could have been brought” at the time of settlement (given Clear Touch’s knowledge of the use and its demand for injunctive relief).

The majority also cited JM Smith Corp. v. PC I Corp and MAS Assocs., LLC v. Venick as persuasive applications of settlement/res judicata principles to later IP claims arising from the same challenged conduct.

4. Contract interpretation: handwritten terms and giving meaning to drafting differences

Applying South Carolina contract interpretation principles, the court cited Schulmeyer v. State Farm Fire & Cas. Co. (“cardinal rule” is intent as shown by contract language). It gave special weight to the handwritten settlement language under Hawkins v. Greenwood Dev. Corp. (handwritten terms prevail over printed terms). It further noted parallel interpretive rules from other jurisdictions via B. Elliott (Canada) Ltd. v. John T. Clark & Son of Md., Inc. (citing Schapiro v. Chapin), plus McDaniel v. Georgia Consol. Contracting Co. and In re Spagnol Enters., Inc..

5. Rule 54(b) reconsideration standards

The Fourth Circuit relied on Am. Canoe Ass'n v. Murphy Farms, Inc. for the proposition that interlocutory orders may be revised “at any time” before final judgment, and Carlson v. Bos. Sci. Corp. for the three recognized grounds: substantially different evidence, intervening change in law, or clear error causing manifest injustice. It contrasted this flexibility with the stricter standards for final judgments under Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co. (Rule 59(e)) and Justus v. Clarke (Rule 60(b)). For the “substantially different evidence” nuance, it cited U.S. Tobacco Coop. Inc. v. Big S. Wholesale of Va., LLC.

In discussing the “clear error” threshold, the majority noted recent rhetoric from Chavez-Deremer v. Med. Staffing of Am., LLC (quoting U.S. Tobacco Coop. Inc. v. Big S. Wholesale of Va., LLC), and traced that “dead fish” formulation to TFWS, Inc. v. Franchot and Bellsouth Telesensor v. Info. Sys. & Networks Corp.. The court expressed “doubts” about importing such a high bar into the Rule 54(b) context, but found the earlier ruling “dead wrong” anyway because it made the dismissal clause superfluous.

6. Evidentiary and trial-management authorities

For summary judgment standards, the court cited United States v. 8.929 Acres of Land in Arlington Cnty. and Anderson v. Liberty Lobby, Inc.. For witness exclusion due to late disclosure, it cited Saudi v. Northrop Grumman Corp., Nelson-Salabes, Inc. v. Morningside Dev., LLC, Benjamin v. Sparks, S. States Rack & Fixture, Inc. v. Sherwin-Williams Co., and Wilkins v. Montgomery. For reviewing evidentiary decisions, it cited United States v. Johnson. For the lawyer-as-witness problem, it cited United States v. Freitekh and Brown v. Daniel.

7. Post-trial standards and South Carolina substantive claims

For JMOL, the court relied on U.S. ex rel. DRC, Inc. v. Custer Battles, LLC (quoting Chaudhry v. Gallerizzo) and Sardis v. Overhead Door Corp.. For breach of contract accompanied by a fraudulent act, it applied Edens v. Goodyear Tire & Rubber Co. (citing Floyd v. Country Squire Mobile Homes, Inc.) and for breach elements S. Glass & Plastics Co. v. Kemper. For new trial, it cited Hicks v. Ferreyra, Minter v. Wells Fargo Bank, N.A., U.S. Equal Emp. Opportunity Comm'n v. Consol Energy, Inc., and Hicks v. Anne Arundel County. For jury instructions, it cited Volvo Trademark Holding Aktiebolaget v. Clark Mach. Co.. For waiver/invited error, it cited Hicks v. Ferreyra (2020), United States v. Herrera, and Shields v. United States.

B. Legal Reasoning

1. The opinion’s key doctrinal move: separating “release” from “dismissal”

The Fourth Circuit’s most consequential reasoning is its strict separation of two contractual instruments often blurred in settlement practice: (i) a release (here limited to claims “arising out of or relating to the subject matter of the Litigation” and limited to claims arising “prior to the Effective Date”), versus (ii) a dismissal-with-prejudice covenant (here requiring dismissal of “all possible claims and counterclaims that have or could have been brought … as part of the Litigation”).

The court held the release clause did not cover Clear Touch’s federal IP claims (they were not “subject matter” claims and were alleged to be ongoing after the effective date). But the dismissal clause did cover them because (a) Lanham Act claims could be brought in state court (Riley v. Dozier Internet L., PC), and (b) they were “possible counterclaims” under S.C.R. Civ. P. 13(b) even if unrelated to the reseller dispute.

2. “Could have been brought” as a drafting choice with sweeping effect

The majority read “could have been brought” to mean “available as a counterclaim in that procedural vehicle,” not “transactionally related.” That reading transforms a settlement of a contract/trade-secrets dispute into a bar on later federal trademark litigation—even where the trademark issues were not pleaded in the original suit—so long as they were procedurally bringable and within the parties’ intended settlement sweep.

3. Intent evidence reinforced the textual reading

While the court grounded its holding in text, it considered the context of negotiation: Clear Touch’s statement that it intended to bring “multiple intellectual property counterclaims” and Ockers’s insertion of handwritten language “including all possible claims and counterclaims.” The state judge’s “buyer’s remorse” remarks and enforcement order dismissing “all possible claims and counterclaims” further confirmed the settlement’s purpose.

4. Rule 54(b): prioritizing correctness over litigation momentum

The court approved the district court’s decision to reverse its earlier interlocutory stance just after jury selection, emphasizing Rule 54(b)’s flexibility (Am. Canoe Ass'n v. Murphy Farms, Inc.; Carlson v. Bos. Sci. Corp.). It found two permissible grounds: (1) “substantially different evidence discovered during litigation” (including live testimony and deposition excerpts not previously considered), and (2) correction of clear legal error that would cause manifest injustice by forcing trial on claims already settled.

The court also framed the trial judge’s choice as judicial-economy driven: better to correct a preclusion error before a long trial than to let a doomed claim proceed.

5. The dissent’s narrower view: post-settlement acts

Judge Rushing’s partial dissent focuses on the phrase “could have been brought.” Because claims based on infringing acts occurring after the settlement date could not have been pleaded earlier, the dissent would allow that “small sliver” of post-settlement infringement claims to proceed, relying on Lyons P'ship, L.P. v. Morris Costumes, Inc.. The dissent also questioned whether the supposed “new” evidence was truly “substantially different,” noting that similar declarations were already in the summary judgment record.

C. Impact

1. Settlement drafting: “release” language is not the whole story

The case’s practical lesson is that parties often negotiate releases carefully but treat dismissal language as boilerplate. This opinion treats dismissal language—especially “all possible claims and counterclaims … could have been brought”—as independently dispositive and potentially broader than the release. Future settlement drafters in the Fourth Circuit should expect courts to enforce:

  • handwritten expansions (“including all possible claims and counterclaims”);
  • dismissal-with-prejudice covenants that function as claim-preclusion accelerants;
  • and differences between clauses (e.g., when a release is time-limited but a dismissal covenant is not).

2. IP enforcement strategy: state-court counterclaims matter

IP plaintiffs sometimes assume federal court is the “proper” home for Lanham Act disputes. This decision reinforces that, because state courts have concurrent jurisdiction (Riley v. Dozier Internet L., PC), a party who settles a state-court case with broad “possible counterclaims” dismissal language may forfeit later federal trademark litigation that was procedurally available earlier.

3. Rule 54(b) litigation management: late-stage reversals are possible

The opinion also signals that the Fourth Circuit will tolerate significant procedural disruption when a district court corrects a nonfinal legal ruling under Rule 54(b) to reach what it views as the legally correct outcome—especially to avoid trying claims ultimately barred by preclusion. Litigants should treat interlocutory rulings as potentially revisable until final judgment, and plan trial strategy with that risk in mind.

4. A likely future battleground: the dissent’s “post-settlement acts” distinction

The dissent tees up an interpretive question that may recur: whether “could have been brought” clauses bar claims predicated on post-settlement conduct. Parties who want to extinguish future infringement disputes should draft expressly forward-looking language (the dissent cites Chaparral Commc'ns v. Boman Indus., Inc. as an example of “now has or hereafter may have” phrasing), rather than relying on “could have been brought” alone.

IV. Complex Concepts Simplified

  • Res judicata (claim preclusion): a final judgment can bar later lawsuits between the same parties over the same “claim.” In settlement cases, courts often look to what the settlement intended to resolve, not just what was pleaded (U.S. ex rel. May v. Purdue Pharma L.P.).
  • Release vs. dismissal-with-prejudice: a release is a contractual promise not to sue over specified matters; a dismissal with prejudice is a procedural termination that ordinarily prevents refiling. Here, the dismissal covenant was broader than the release and drove preclusion.
  • Concurrent jurisdiction: some federal statutes (including the Lanham Act) can be heard in state courts too, meaning a party may be able to assert federal trademark claims as counterclaims in state litigation (Riley v. Dozier Internet L., PC).
  • Rule 54(b): allows a court to revise nonfinal rulings before final judgment; it is more flexible than reopening a final judgment under Rule 59(e) or Rule 60(b) (Am. Canoe Ass'n v. Murphy Farms, Inc.; Carlson v. Bos. Sci. Corp.).
  • Motions in limine: pretrial requests to admit/exclude evidence or witnesses. Late-disclosed witnesses can be excluded under Rule 37(c)(1) unless the delay is substantially justified or harmless (S. States Rack & Fixture, Inc. v. Sherwin-Williams Co.).
  • Attorney as witness: ethical rules generally discourage a lawyer from serving as both advocate and necessary witness; one common solution is withdrawal as trial counsel so the lawyer testifies only as a fact witness (United States v. Freitekh).

V. Conclusion

Clear Touch Interactive, Inc. v. The Ockers Company establishes (and powerfully illustrates) that settlement language requiring dismissal “with prejudice” of “all possible claims and counterclaims … [that] could have been brought” can preclude later federal Lanham Act litigation—even when the release clause is narrower and even when the later suit is styled as addressing “ongoing” infringement. The court also endorses robust Rule 54(b) flexibility: interlocutory mistakes can be corrected late to prevent trial on claims the parties already settled.

The decision’s broader message is contractual: courts will read settlement packages clause-by-clause, enforce handwritten expansions, and give operative effect to drafting differences—so parties must draft “dismissal” provisions with the same care as “release” provisions, especially when future IP disputes are foreseeable.