AGTA Slams Paraíba Lawsuit

By Gary Roskin -- JCK Online, August 1, 2008

The American Gem Trade Association is moving to dismiss the $120 million lawsuit targeting its use of the phrase “Paraíba tourmaline.” (See “Name Blame,” JCK, June 2008, p. 190.)

The case, filed by David Sherman and Paraiba.com, claims AGTA has redefined the locality-origin classification “Paraíba tourmaline” as a color-variety classification for similar gems from Mozambique and Nigeria. Sherman also is suing the Gemological Institute of America, Brazil Imports Inc., and several individuals, including AGTA present and past board members.

“We feel that the suit is absolutely without merit,” said AGTA president Douglas Hucker. GIA declined comment.

In an eight-page letter to the plaintiff’s attorney, AGTA lawyer Thomas E. Schuck gave a history of the discovery and the electric-blue and -green tourmaline from Paraíba, Brazil. He noted that subsequent discoveries of similar materials found in Nigeria and Mozambique have let the name “Paraíba” not only describe place but also color variety.

Schuck also argued the name “Paraíba” cannot be trademarked. “Since Paraíba 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,” Shuck wrote. He pointed out that Sherman himself is trying to “register the word mark 'Paraiba,’” suggesting that Sherman believes there is already a secondary usage of the name.

Opinion on the lawsuit is divided. Even some AGTA members say it isn’t right to change an origin to something that appears to be a marketing tool and use it on a laboratory identification report.

The Paraíba suit could fall under what appraisers call “advocacy,” where independent third-party appraisers are expressly forbidden to act as an advocate for a piece that is being appraised or evaluated. In this case, the professional gem laboratories, while not giving a monetary value, are most likely altering its market value.