FTC Allows ‘Cultured’

In a setback for jewelry associations, the Federal Trade Commission said qualified use of the term cultureddiamonds should be allowed to describe lab-created stones.

A petition submitted to the FTC by 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. JVC later hired lobbying firm Patton-Boggs to press its case.

After reviewing the petition, the FTC declined to amend the Guides, explaining that when determining whether a term was deceptive, it had to rely on the “net impression of the entire advertisement.” The vote was 4–0.

“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 said.

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

In her response, JVC chief executive officer and general counsel Cecilia L. Gardner said the FTC noted that the new rules require marketers, when they use the term cultured, to “include one of the four clear terms (laboratory-created, laboratory-grown, [manufacturer]-created, synthetic) already obligatory under the Guides.”

“Our view is we won,” Gardner says. “The FTC said that, if you just call it cultured, that’s insufficient. I’m very pleased with that.”

Gardner says the two companies that use the word cultured already use the other terms with it. “Gemesis and Apollo were never the problem,” she says. “The issue was someone else who might use the word.”

Gemesis president Stephen Lux says his company is “very pleased” with the ruling and doesn’t expect to change its marketing. He argues, however, that the FTC should ban the word synthetic for lab-grown diamonds, since most consumers think it refers to fake diamonds, including cubic zirconia.

Tom Chatham, of Chatham Created Gems, called the ruling a “vindication,” noting that his father, Carroll, was served by the FTC with a cease-and-desist order in 1959 forbidding use of the term “Chatham Cultured Emerald.”

“We are considering the impact and possible change to our advertising,” says Chatham, who currently only uses the term created. “Even a corporate name change is not out of the question at this time. Everything we have done for the past 50 years has been based on this threat of renewed litigation. My father would have been pleased to see this outcome, finally.”