From The Desk of Rajesh Bajaj

Mined v/s man made diamond at FTC!

De facto every leading player of gem-n-jewellery is busy to read-n-interpret the recently announced the Final Revisions to the Jewelry Guides by the US FTC (The Federal Trade Commission). Widely the FTC attempt remained to prevent trickery in jewellery marketing.

No doubt the FTC has commented on specific concerning issues of gemstones, pearls, diamonds and precious metal alloys. Yet, here I am focusing mined diamond v/s man made diamond! Yet I am not saying LGD (Laboratory Grown Diamond) v/s natural diamond!

Because, FTC says, diamond is not a natural! This can be now use for both, mine as well as for LGD too! De facto, the FTC has removed the word ‘natural’ from their definition for diamond! The Commission no longer defines a ‘diamond’ by using the term ‘natural’ because it is no longer accurate to define diamonds as ‘natural’ when it is now possible to create products that have essentially the same optical, physical, and chemical properties as mined diamonds!

However, the Commission cautions marketers that it would be deceptive to use the terms ‘real’, ‘genuine’, ‘natural’ or ‘synthetic’ to imply that a lab-grown diamond is not, in fact, an actual diamond. Means, LGD is not a Synthetic! This may mislead the market if it is use for LGD says FTC! Yet, it is not an absolute that one cannot use for LGD!

Successfully the International Grown Diamond Association (IGDA) convinced the FTC that use of Synthetic & Imitation word for LGD is confusing consumers! Because of uses of such words for LGD, mistakenly buyer believes the terms, describe simulated products made from glass, plastic, or cubic zirconium.

According to the Guidance, ‘The record indicates many consumers mistakenly believe ‘synthetic’ means an artificial product such as cubic zirconia, which lacks a diamond’s optical, physical, and chemical properties.’ The Commission does not ‘prohibit’ marketers from ever using ‘synthetic’ to disparage lab grown diamonds.

The FTC lacks a sufficient basis for doing so because the evidence does not establish that the term would be deceptive in every instance. If a marketer uses ‘synthetic’ to imply that a competitor’s lab-grown diamond is not an actual diamond!

High arguments noted to describe LGD as Cultured diamond! JVC & DPA & others had made several arguments inclding the study support of 2016 Harris study! They said, by adding Cultured’ word with LGD adds consumer confusion!

Despite several arguments from JVC & DPA, the FTC could not get convinced. According to the Commission, they lack a sufficient basis & therefore they are not advising to stop such use to marketers! FTC referred their Section 5.

‘The final Guides address the term cultured when used to describe laboratory-created diamonds in three ways.

Use of Cultured In contrast, other commenters contended that even qualified cultured claims confuse consumers.

1: They stated that lab-created diamonds are not natural and asserted that marketers use the term to make consumers associate these products with organic pearl cultivation methods. Many of these commenters argued it is inaccurate to describe a lab-grown diamond as cultured because it is not natural like a mined diamond or cultured pearl.

The final Guides therefore advise marketers against making unqualified cultured diamond claims to describe lab-created diamonds.

2: The Commission declines to issue guidance cautioning against any use of cultured. Because Section 5 of the FTC Act is the Guides’ legal underpinning, the Commission will not advise against any use of a term unless all uses are likely to be deceptive. Otherwise, the Commission would be chilling truthful, potentially valuable commercial speech.

3: The consumer perception evidence demonstrates cultured diamond can effectively be qualified.

Finally, use of ‘Real’, ‘Genuine’ and ‘Natural’ to Describe LGD the FTC guidance remained unchanged. According to the Previous Guides Section 23-24, ‘cautioned marketers against using such words or similar terms to describe a product that is ‘manufactured or produced artificially’.