Laws & Litigation

‘MOTHER AND CHILD’ DESIGNER SUES ESSLINGER

Janel Russell, designer of the “Mother and Child” pendant sold under license by the Kirchner Corp., charges Esslinger & Co. of St. Paul, Minn., and designer Steven Ertle with copyright infringement in a suit filed in U.S. District Court in Minnesota. Kirchner is not a party to the suit.

Russell charges that Esslinger’s “Family Beginnings” collection is “an obvious copy” of the Mother and Child pendant, which was copyrighted in 1981. An earring and ring using the design were copyrighted in 1991.

Esslinger denies the allegations in the suit. Esslinger spokesperson Patricia Liquard says Ertle designed the collection after being inspired by the birth of his first child. “His design was copyrighted in June 1993,” she says. “It’s an original idea which stands on its own. Many designs on the market have copied the mother/child idea, but Steve’s design is built on the original idea of the traditional family – mother, father and the child.”

The suit asks that Esslinger be ordered to halt production and distribution of the “Family Beginnings” collection and to dispose of any molds and pieces in inventory. The suit also asks that Esslinger and Ertle be required to pay legal fees and any damages sustained since “Family Beginnings” was started.

If a settlement isn’t reached first, a trial will be held after Sept. 1, says Russell’s attorney, James R. Steffen of Faegre & Benson in Minneapolis.

JUDGE DISMISSES CHARGES IN ROYALCREST DISPUTE

U.S. District Court in New York has dismissed trademark infringement allegations that Suberi Bros. Inc. brought against Merit Diamond Corp. Both companies are headquartered in New York City.

Suberi Bros. asked Merit Diamond in June 1994 to cease using the Royalcrest diamond trademark, claiming it diluted Suberi’s Royal Cuts diamond product name and violated trademark and unfair competition laws.

Merit answered with a lawsuit claiming the name violated no laws. Suberi Bros. responded with a counterclaim saying the name did violate the laws.

In January, U.S. District Judge Sidney H. Stein dismissed Suberi’s claims, saying the company failed to show that “ordinarily prudent purchasers” would be misled by the Royalcrest name. “Merit’s Royalcrest mark, adopted in good faith, is sufficiently different so as not to cause an appreciable number of sophisticated diamond purchasers to be confused,” he said.

Merit also sought attorney fees from Suberi, but the judge denied that request.

CALIFORNIA JEWELER FACES CHARGES

A California District Attorney has filed a civil suit alleging that a jewelry business in Oxnard, Cal., misled the public when advertising its prices were lower than those for equivalent goods at the Los Angeles Wholesale Jewelry Mart and that the company manufactured its own jewelry.

The Consumer and Environmental Protection Division of the district attorney’s office in Ventura says its investigation of the long-running advertisements by George Thompson Diamond Co. did not substantiate either claim. The district attorney seeks penalties of $5,000 per violation, a permanent injunction against future use of the ads and a temporary restraining order (which was granted in mid-January) and preliminary injunction to prevent “further violations of law pending a trial.”

George P. Thompson, owner of the business, denies the district attorney’s charges.

The lawsuit says Thompson’s claims of lower prices were untrue because the competitor’s jewelry mentioned in the ads was of much higher quality and, in some cases, of a different style. In one instance, according to the suit, the compared ring was determined to be worth $1,500 more than Thompson’s ring even though the ad said it was the same quality.

Regarding the ads’ claim the business could offer low prices because it manufactured its own goods, the district attorney says Thompson made less than 2% of its gold jewelry. Up to 85% of the jewelry used in the ads was made by a diamond setting shop in Los Angeles and an additional 8% was bought from liquidations and close-out sales. In a statement disputing the charges, Thompson says he manufactures, in whole or in part, 60%-70% of the jewelry.

The district attorney also alleges the business:

  • Claimed to offer “wholesale prices” when it actually used a higher standard markup on items sold to the public than for those sold to other retailers.

  • Advertised “percent off” markdowns from the “regular retail prices” of competitors without disclosing there may never have been any sales at the regular price.

  • Overstated the total carat weight of its jewelry. Thompson maintains his carat weights are accurate. “The district attorney’s alleged appraiser is undoubtedly wrong or strongly biased,” Thompson says in the statement.

  • Claimed to “beat anyone’s regular or even sale prices – guaranteed in writing” without disclosing the “guaranty” was void if the customer wore the jewelry. In addition, the customer first had to buy the lower-priced ring and bring both pieces with proof of purchase to be sent out for an appraisal – which may or may not have been in the customer’s favor. Thompson says his guaranty is “rock solid.”

The district attorney’s 10-month investigation began with a routine request that the business substantiate its claims. A jewelry appraiser and graduate gemologist were retained to consult in the investigation, which included undercover purchases by investigators posing as customers.

Thompson says he stands behind his representations to the public and expects the allegations to be defeated.

CRIME WATCH ARMED ROBBERS HIT TRADITIONAL JEWELERS

At least six armed robbers stormed into Traditional Jewelers in Newport Beach, Cal., on Jan. 3, held store employees at gunpoint and escaped with two dozen Rolex watches and a dozen expensive pieces of jewelry. The robbery occurred at 7:30 p.m., 30 minutes before closing.

President Marion Halfacre says at least two men stood outside while four others entered the store, smashed showcases and fled within two minutes. “The armed security guard turned his head for a second, and that split second is when they came in,” he says. The thieves apparently had been waiting for the opportunity because they didn’t enter until all customers were out of the store, he adds. “They knew exactly what they wanted and where they had to go to get it.”

The robbers escaped in three stolen cars later found abandoned. Halfacre says a ring taken in the robbery was found in one of the cars.

The entire robbery was caught on the security camera videotape. Halfacre says two suspects were arrested, but released. He adds that police have some good leads and feel confident that all suspects will be apprehended.