U.S. District Court Invalidates ‘Elara’ Patent

In July 2003, the U.S. District Court for the Northern District of Illinois, located in Chicago, entered the Federal Jury verdict finding U.S. Design Patent No. D338,851 (the “‘851 Patent”), covering the “Elara” (formerly known as the “Flanders Brilliant”) diamond design, to be invalid—as being fully anticipated by an earlier (“prior art”) gemstone design. Additionally, the Court ruled that the ‘851 Patent is unenforceable as a matter of law due to the commission of inequitable conduct before the U.S. Patent and Trademark Office.

The “Elara” diamond is currently marketed by Kuwayama Europe N.V., a wholly owned subsidiary of the Japanese publicly traded company Kuwayama Corporation (JASDAQ 7889), and Flanders Diamond USA Inc., a subsidiary of Flanders Diamond Israel, which is in turn jointly owned by Kuwayama Europe and Moti Ganz Diamond Manufacturers, a De Beers’ sightholder located in Tel Aviv, Israel.

The lawsuit was originally brought in 2000 by National Diamond Syndicate (NDS), a Chicago-based diamond wholesaler, after NDS was accused by Flanders Diamond USA of patent infringement arising from the sale of NDS’s Flanders Cut diamond.