Professional Jeweler Archive: German Court Bans Term 'Cultured Diamonds'

January 2005

First Run

German Court Bans Term 'Cultured Diamonds'

The case was brought against a distributor of Gemesis synthetic diamonds

A panel of three judges in a Munich district court ordered a German distributor of gem-quality synthetic diamonds to cease using the term “cultured diamonds” when marketing to the public in Germany, declaring the term misleading. The decision in November was made against Gemsmart GmbH, which distributes gem-quality synthetic diamonds produced by Gemesis Corp., Sarasota, FL.

The decision ended a case brought against Gemsmart, based in Munich, by Germany’s Central Office for Control of Unfair Competition, according CIBJO, the World Jewellery Confederation.

Additionally, the company must use the word “synthetic” or “artificial” immediately before the word “diamond” in reference to the product.

In reaching the decision, the judges relied on the terminology and definitions contained in CIBJO’s Diamond Book.

Possible Financial Penalty

The judges also attached to their ruling an order that a financial penalty of up to 250,000 euros would be incurred for each case of non-compliance with the restraining order, adding that jail will be ordered for the respective manager of the defendant’s company in the case of non-payment of the penalty. Legal commentators suggested that because the ruling took place within the jurisdiction of a member country of the European Union, the verdict could have an impact on future rulings in other E.U. countries.

“At a time in which we seek to protect, reinforce and strengthen the consumers’ confidence in natural diamonds and natural diamond-set jewelry, this is an important achievement,” says CIBJO President Gaetano Cavalieri. “I am sure that soon we will have an industry-wide consensus on the banning of the term ‘cultured diamonds.’”

In the U.S., the world’s largest jewelry market, the term “cultured diamonds” hasn’t yet been challenged in court. Cecilia L. Gardner, executive director and general counsel of the Jewelers Vigilance Committee in New York City, says the FTC Guides for the Jewelry Industry address the use of the term “cultured” only as applied to pearls. “However, it is the view of the JVC that the use of the term ‘cultured’ as applied to diamonds without additional information about how the product was created is insufficient disclosure to describe the true nature of a synthetic or laboratory-grown diamond,” says Gardner.

Planning to Fight

Gemesis says it will oppose CIBJO’s questioning of the use of the term cultured diamonds to describe synthetic diamonds, according to a release issued by the company. “Gemesis has consistently demonstrated our commitment to protecting consumers and retailers through our identification initiative,” says Gemesis President David Hellier.

Gemesis also said the World Federation of Diamond Bourses is undermining consumer confidence in synthetic diamonds by calling for labs to refrain from issuing grading reports for them. WFDB passed a resolution at its October 2004 congress to this effect (News/Diamonds, page 20). “These activities directly impede consumer access to cultured diamonds and the well-known benefits they provide, including the fact that they are environmentally and socially responsible,” says Gemesis.

Gemesis lab-grown diamonds can no longer be called “cultured” in Germany. Will the U.S. or the E.U. follow Germany’s lead?

Photo by Robert Weldon.

Copyright © 2005 by Bond Communications