21 Sep Bra-Wars II: Stretchline win again against H&M
The settlement agreement came about through earlier patent infringement proceedings in which H&M had challenged the validity of the Stretchline patent. The settlement agreement included the clause that the parties compromised all the claims between them and H&M agreed not to sell any products which fell within the claims of the Patent.
When Stretchline discovered that infringing bras were still being sold, they sued H&M for breach of the settlement agreement. H&M denied that it was in breach and claimed that the Patent was invalid. The High Court struck out this ground of defence to infringement because the invalidity issue had been settled by way of the agreement. This decision has now recently been upheld by the Court of Appeal ( EWCA Civ 516).
At trial, H&M argued that the skilled person would appreciate that, on Stretchline’s construction, the invention would be invalid over the ‘common general knowledge’ the skilled person would be aware of because the fusible yarn was being used for its well-known purpose of bonding/fusing fibres. that its construction should be preferred. The trial judge Henry Carr J. rejected this argument on three grounds (it was really an attempt to challenge validity, H&M was not entitled to use the common general knowledge argument as a basis to reject Stretchline’s construction, and in any event, the common general knowledge argument failed on the evidence provided).
In the leading judgement Lord Justice Kitchin, The Court of Appeal upheld the High Court’s findings on Stretchline’s construction of the Patent and that H&M’s products fell within the claims of that Patent and that H&M was therefore in breach of the settlement agreement.
This case highlights the importance of settlement agreements and the effect the clauses can have on the available defences in subsequent litigation.