AGTA Demands Dismissal of $120M Paraiba Lawsuit

By JCK Online Staff -- JCK Online, 6/9/2008 10:39:00 AM

In an eight-page letter, Thomas E. Shuck, representing the American Gem Trade Association’s law firm Parker Milliken, details reasons why the name Paraiba can be used both as a locality and a color variety. The letter demands that John P Hannon II, attorney for David Sherman and Paraiba.com, drop the complaint or "suffer consequences."

Sherman filed a $120 million lawsuit April 7 in Superior Court of the State of California, Santa Cruz, against the American Gem Trade Association; the Gemological Institute of America; Brazil Imports Inc.; and several individuals, including AGTA present and past board members. (See previous story)

Sherman objects to a move by AGTA and laboratories that belong to the Laboratory Manual Harmonization Committee concerning the name Paraíba. His suit claims that they have taken the locality origin classification Paraíba tourmaline and redefined it as a color variety classification, paraiba tourmaline, for similar gems found in Mozambique and Nigeria.

In a rebuttal filed May 29, Shuck, on behalf of the AGTA, writes: “We will give you and your client ten (10) days from the date of the\is letter to dismiss the Complaint, with prejudice. If the dismissal is filed within that time period, and only if the dismissal if filed within that time period, will my clients waive their claims to legal fees and costs which they feel have been wrongfully forced to incur, and which are considerable even at this early date. If Mr. Sherman fails to comply with this demand, we will proceed with a motion for summary judgment. When we prevail in the case, we will attach this letter to moving papers asking for sanctions under rule 11. I will likely recommend to my clients that they pursue an action for malicious prosecution against Mr. Sherman, his company, and you.”

Shuck makes several points that he and AGTA says negate the accusation that the place name Paraiba has been, as Sherman has been saying, “hijacked,” and claims that the $120 million lawsuit is “unmeritorious.”

Shuck spends five pages on “international nomenclature consensus,” including a history of the discovery and then naming of the electric blues and greens tourmaline from Paraiba Brazil. Subsequent history of the discoveries of similar materials found in Nigeria and Mozambique, with references to how the trade has used the name Paraiba not only to describe place, but also color variety. Shuck’s presentation then allows him to claim Sherman’s wrongful use case has “fatal deficiencies.”

Shuck points to that he defines as current trademark constraints. “Since Paraiba was originally a place name, it is not subject to trademark unless it has achieved a secondary meaning beyond its being the name of a place,” writes Shuck. He then points out that Sherman himself is trying to “register the word mark ‘Paraiba,’” suggesting that Sherman himself believes there is already a secondary usage of the name. “Based on Mr. Sherman’s assertion that ‘paraiba’ has achieved a secondary non-geographic meaning, as my clients maintain clearly it has,” writes Shuck.

“Tsavo Gem Imports, Inc., successfully registered the word mark ‘Paraiba Ice,’ Serial No. 76657016 on the Supplemental Register,” writes Shuck. Paraiba Ice is sold as “a simulant” with color similar to the Brazilian Paraiba Tourmaline. “On the basis of the prior issuance of the mark for ‘Paraiba Ice,’ there is virtually no possibility, barring examiner error, that Mr. Sherman will be able to register the name ‘Paraiba.’”