Article

Note: In settlement of litigation between Metabolite Laboratories, Inc. (Original Licensee) and Laboratory Corp. of America Holdings (Sub- Licensee) over alleged patent infringement, it was agreed that a letter of credit would be issued for the account of Sub-Licensee in favor of Original Licensee. The letter of credit was intended to be available in the event that Sub-Licensee was subsequently found to be liable with regard to an aspect of the sub-license agreement.

Since there had been no determination of liability, Sub-Licensee/Applicant sued Original Licensee/ Beneficiary seeking declaratory judgment that it was not liable so that the letter of credit could be discharged. Original Licensee claimed that Sub- Licensee had breached the settlement agreement by refusing to pay funds from the letter of credit. On cross motions for summary judgment, the United States District Court, District of Colorado, Weinshienk, J., granted summary judgment in favor of Sub-Licensee. The Judge stated that Sub-Licensee had no legal obligation to pay funds, concluding that there had been no violation of the settlement agreement.

[JEB/mcb]

COPYRIGHT OF THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE

The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.