Yehuda to fight Blue Nile unfair-competition lawsuit

The Yehuda Diamond Co. said it plans to fight a federal lawsuit filed by Blue Nile that claims ads on Yehuda's Web site make "false and misleading statements" in comparing its clarity-enhanced diamonds to natural diamonds sold by Blue Nile.

The lawsuit, filed on Dec. 18 in the U.S. District Court in Seattle against Yehuda parent company Diascience Corp. of New York, stems from ads on Yehuda.com in which Yehuda compares its diamond prices to those of diamonds sold by Blue Nile. The ads point out individual Yehuda diamonds that are priced significantly below diamonds of the same weight, cut, color and clarity sold on Blue Nile's Web site.

But, the Seattle-based online jeweler says the comparisons do not tell the full story, and accuses the New York diamond company of unfair competition, copyright infringement and violations of the Washington Consumer Protection Act.

"These diamonds are not equivalent, and Yehuda's Web site falsely represents that they are," the lawsuit says. "Moreover, to emphasize a false equivalence between Yehuda's artificially enhanced diamonds and Blue Nile's natural diamonds, Yehuda wholesale copied portions of Blue Nile's copyright-protected Web site and displayed the Blue Nile Web pages on the Yehuda.com homepage."

Yehuda, which does not sell to consumers directly but instead uses its site to send consumers to retail jewelers that sell its clarity-enhanced stones, insists that the comparisons are fair game.

"What would be misleading would be to prevent consumers from being able to make the choice between our clarity-enhanced diamonds and those Blue Nile sells without clarity enhancement," Yehuda Diamond Co. President Dror Yehuda said in a statement issued on Friday. "The public needs to know that our prices, which come with unsurpassed expert service, are—plain and simple—lower than Blue Nile's prices."

Yehuda also points out that the Web site contains full details on its quality-enhanced diamonds, and consumers are also encouraged to visit a local jeweler to check out the stones for themselves.

He told National Jeweler that the company has taken down the copyrighted material from Blue Nile's Web site, and that the material had only been posted for one day.

In the suit, Blue Nile seeks a preliminary and permanent injunction that would bar Yehuda "from making false or misleading comparisons, orally or in writing, between Yehuda's artificially clarity-enhanced and Blue Nile's natural diamonds," court papers said.

It also asks that Yehuda be made to notify its customers and the diamond industry of the difference in quality between the two products.
Source: nationaljewelernetwork