Lazare Kaplan International and the Gemological Institute of America have settled their seven-year lawsuit over the GIA’s inscription technology, according to LKI’s most recent filing with the SEC.
The settlement, forged in September, stipulates that the GIA makes a one-time payment to LKI of $15 million. LKI also agreed to grant GIA a license to its patents, for which GIA will pay an inscription royalty through July 31, 2016. LKI doesn’t anticipate that will exceed 10 percent of its revenue.
The lawsuit, which dates back to 2006, claimed that GIA and codefendant PhotoScribe infringed on LKI’s patent for diamond inscription technology. At press time, it wasn’t clear whether the litigation with PhotoScribe, which has denied infringing LKI’s patents, was affected by the settlement.
The filing also says that LKI’s ongoing litigation against Antwerp Diamond Bank is continuing, with both sides currently in discovery.
The legal war with ADB and other “material uncertainties have a significant detrimental effect on the [LKI’s] ability to transact business in the ordinary course [including] without limitation, the ability of the company to maintain and/or expand its operations,” the filing said.
The uncertainties have also prevented from LKI from filing its latest financial results. The company hasn’t released full results since 2009, causing it to be delisted from NASDAQ.
It did report that net sales for the three months ended Nov. 30 totaled $13.5 million, a 15 percent drop from the prior year. The decline is due to falling of sales of non-branded polished diamonds, it added. However, revenue for the period was $29 million, up from the prior year’s $15.6 million, in part due to the GIA settlement.
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