Online Jeweler Blue Nile’s Lawsuit against Yehuda Dismissed
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03.11.09, 09:47
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Retail
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Online diamond retailer Blue Nile Inc.'s $60 million lawsuit accusing the Yehuda Diamond Co. of misleading advertising as a result of its diamond price comparisons with the online diamond jeweler has been dismissed by a federal jury.
The lawsuit came in the wake of advertisements on the Yehuda diamond website comparing the prices of Yehuda's clarity-enhanced diamonds to natural diamond prices of gemstones sold by Blue Nile. The ad indicated that Yehuda diamonds of the same carat weight, cut, color and clarity were much lower priced than diamonds sold by Blue Nile.
Fine jeweler Blue Nile claimed that the ads failed to tell the full story and accused diamond dealer Yehuda of unfair competition, copyright infringement and violations of the Washington Consumer Protection Act.
Blue Nile asked for exemplary damages of $60.2 million on the basis of alleged actual damages of $20.1 million.
National Jeweler quotes the suit: “These diamonds are not equivalent, and Yehuda's website falsely represents that they are. 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 website and displayed the Blue Nile webpages on the Yehuda.com homepage."
Yehuda, which stated that the copyrighted material from the Blue Nile website was only aired for one day, maintained that its diamond price comparisons are in the best interests of consumers.
Following the dismissal, Dror Yehuda, president of Yehuda Diamonds, stated: "This is a momentous victory for all consumers and for free-market competition. In essence, the jury told online jeweler Blue Nile that it can't use its massive size and legal muscle to prevent consumers from learning about lower-priced, quality alternatives to Blue Nile diamonds. In recent years, Blue Nile has preferred to fight is competitors in the courtroom rather than in the marketplace."
John Baird, a Blue Nile spokesman, stated in response to the ruling: “We’re puzzled and we’re definitely disappointed by the decision. The bottom line here is we believe consumers are the real losers.”
Yehuda has also stated that it intends to press on with the lawsuit it filed against Blue Nile in 2008. In that case, Yehuda claims that consumers who purchased rubies, emeralds, sapphires or jewelry containing those stones from Blue Nile were not informed that the gemstones had been treated to enhance their appearance.
In response to the gemstone suit filed by Yehuda, Blue Nile was quoted as stating that on its jewelry website it provides education and guidance with the aim of empowering fine-jewelry consumers, including information on both gemstone enhancements and gemstone care.
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By: Rachel Lieberman, Israel Diamond Industry Portal
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