German Court Bans 'Cultured Diamonds'

A Munich court has issued a restraining order against a German distributor of lab made synthetic diamonds produced by the Gemesis Corporation to stop using the term “cultured diamonds” when marketing its products to the public in Germany, saying the term is misleading.

The case was brought against Gemsmart GmbH, a Munich-based distributor for Gemesis, by the Central Office for Control of Unfair Competition following an advertisement placed by the company in the local press, which stated that “…cultured diamonds have the same chemical, optical and physical properties as their counterparts that were created in the ground”.

The wording of the advertisement was similar to that used by Gemesis on its website, where it says: “Gemesis Cultured Diamonds are laboratory-created diamonds that have the same chemical, optical and physical characteristics as earth-grown diamonds.”

The court ordered Gemsmart to refrain from using the term “Cultured Diamonds,” or “Zuchtdiamanten” in German, which was the term used in the advertisement.

In future, the court said, the company can only refer to laboratory created diamonds as “diamonds” if the word is immediately preceded by one of the modifying adjectives, “synthetic” or “artificial”.

In reaching the decision, the judges relied on the terminology and definitions contained in the Diamond Book of CIBJO, the World Jewellery Confederation.

The judges also attached to their ruling an order that a financial penalty of up to €250,000 would be incurred for each case of non-compliance with the restraining order, adding that a jail term will be imposed on the manager of the defendant’s company if the penalty is not paid.

Legal commentators have suggested that since the ruling has taken place within the jurisdiction of a member country of the European Union, the verdict could have an impact on future rulings in other EU countries.

In the United States, the world’s largest jewelry market, the term “cultured diamonds” has not been challenged in court.

However, Cecilia L. Gardner, the executive director and general counsel of the New York-based Jewelers Vigilance Committee (JVC) wrote, “The Federal Trade Commission Guidelines for the jewelry Industry address the use of the term ‘cultured’ only as applied to pearls.”

“However,” Gardner continued, “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.”

CIBJO President Gaetano Cavalieri welcomed the verdict, emphasizing that the international jewelry trade had won a double victory in this case. “First of all, 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. I am sure that soon, we will have an industry-wide consensus on the banning of the term ‘cultured diamonds,” he said.