A settlement agreement between the parties involved in the recent
Stretchline v H&M case has meant that H&M was precluded from challenging the validty of Stretchline’s patent. Stretchline had a patent for fabric tubes that encase under-wired garments, such as bras. They had a dispute with H&M a few years back, where Stretchline alleged infringement of its patent in 2011. Subsequently, the parties entered a settlement agreement. A year on, Stretchline sued H&M because it believed there was a breach of the settlement agreement as well as an infringement of its patent. H&M countered that it had not breached the settlement agreement and had not infringed the patent because its bras were not within the scope of the patent and that, in any case, the patent was invalid. Stretchline then applied to strike out parts of the case which raised the issue of the patent’s validity. At the Court of Appeal, it was held that the terms of the settlement agreement were indeed broad enough to preclude H&M from raising the issue of the validity of the patent in response to Stretchline’s 2012 claim for patent infringement. In this case, H&M had bound itself to compromise all issues in the dispute between the parties, including the issue of the validity of the patent, within the contractual agreement. The case reminds us to ensure that any settlement terms agreed upon do not subsequently limit the rights of the parties in case of a breach.
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