FTC Says ‘Cultured’ Can Describe Lab-Created Diamonds

By JCK Online Staff -- JCK Online, 7/22/2008 3:21:00 PM

In a setback for several jewelry associations, the Federal Trade Commission, in a ruling released Tuesday, said that there is insufficient evidence to establish that the qualified use of the term "cultured diamonds" is deceptive or unfair when describing lab-created gemstones.

A petition submitted to the FTC by the Jewelers Vigilance Committee and 10 jewelry industry trade associations asked that the commission amend the “Guides” for the Jewelry, Precious Metals, and Pewter Industries to state that it is deceptive or unfair to use the term "cultured" to describe laboratory-created gemstones, even when the man-made gemstones possess essentially the same optical, chemical, and physical properties of natural, mined gemstones.

The petitioners (the Manufacturing Jewelers and Suppliers of America, American Gem Trade Association, Jewelers of America, CIBJO, The World Jewellery Confederation, the Cultured Pearl Association, American Gem Society, the Diamond Council of America, World Federation of Diamond Bourses, the Diamond Manufacturers and Importers Association of America, and International Diamond Manufacturers Association), argued that using "cultured" to describe such diamonds is either deceptive or unfair.

The current Guides do not address whether the term "cultured" can be used to describe laboratory-created gemstones, the FTC said Tuesday. Although the Guides do advise marketers to use specific qualifying language to make clear that the gemstones are created in a laboratory.

After reviewing the petition and consumer perception surveys that the jewelry trade groups relied on as evidence of their case, the FTC said in a statement that it declined to amend the Guides. The vote was 4-0.

The FTC explained that “Even if the surveys demonstrate that the unqualified use of the term ‘cultured’ to describe laboratory-created gemstones is misleading, there is no evidence to suggest that the use of the qualifying language set forth in the Guides fails to render the term non-deceptive.”

The FTC went on to say that it will “continue to evaluate advertising using the term ‘cultured diamonds’ on a case-by-case basis and recommend enforcement action when appropriate.”

In a response, Cecilia L. Gardner, JVC president, chief executive officer, and general counsel, said that the FTC agreed with at least part of the complaint.

“The trade associations that signed the petition … universally took the position that the term ‘cultured’ ought to be added to the list of terms that are deceptive and unfair when describing synthetic gemstones,” Gardner said. “The FTC agreed with us that the use of the word ‘cultured’ alone to describe synthetic gemstones would be insufficient to protect consumers. Their ruling that marketers be required to include one of the four clear terms already obligatory under the Guides that disclose the true nature of the product will go far to protect against consumer deception.”

More information of the petition and the ruling can be on the FTC and JVC Web sites.