Invalidity as a defence for non-infringement?

Stretchline Intellectual Properties Ltd v H & M Hennes & Mauritz UK Ltd.

This case considered whether it was possible to use invalidity as a defence for non-infringement, when this was contrary to an earlier settlement agreement.

This was an unsuccessful appeal from the judgment of Sales J ([2014] EWHC 3605 (Ch) that, following the settlement agreement, H & M could not put validity in issue by way of defence or counterclaim.

Stretchline was the owner of United Kingdom Patent No. 2309038 relating to tubular fabric for use in underwired bras. Stretchline had previously brought infringement proceedings under the patent against H & M. H & M had made a counterclaim for revocation. Those proceedings had been settled by way of a settlement agreement.

Some time later, Stretchline believed that H & M was in breach of the settlement agreement and brought an action to enforce the settlement agreement (also alleging infringement of the patent). H & M relied on a defence of invalidity. At first instance Sales J held that the settlement agreement definitively settled all issues between the parties in the first action, so that validity could not be put in issue.

Kitchin LJ, giving the lead judgment with the other judges agreeing, dismissed the appeal. He commented that, although this was not an issue which the Court had been asked to decide, Stretchline was also precluded by the settlement agreement from pursuing its infringement claim. Kitchin LJ did not accept an argument by H & M that Stretchline had changed its construction of the claim in a way which could not have been foreseen when the settlement agreement was reached.