Diamond Services Mgmt. v. Fable Jewelry

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Contracts

New York Law Journal

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District Judge Shira Scheindlin

Diamond holds the exclusive right to sublicense certain patents utilized in making rings from tungsten. Its motion for summary judgment against jewelry designer and manufacturer Fable was premised on Fable's admitted failure to make royalty payments owed under their Oct. 1, 2008, license agreement, pursuant to which Diamond granted Fable a "non-exclusive, non-transferable, non-assignable license to make and sell tungsten rings. Fable's opposition to Diamond's motion rested on the falsely held notion that the covenant of good faith and fair dealing imposed a duty on Diamond to exceed the license agreement's express terms. Fable signed the license agreement despite seeking and not receiving a "most favored nation clause" for licensing terms consistent with those Diamond provided Fable's competitors. Fable's opposition to summary judgment failed to the extent it was grounded on the contract it wished it had signed, rather than the contract it actually signed. The court also held that even if Fable's implied covenant claims were valid and entitled it to damages, those damages were disputed and unliquidated. The court reserved decision on damages pending Fable's submission of information to Diamond and the court.

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