Synthetics: Isolating the Threat

In 2004, a Munich court ordered a German distributor of synthetic diamond manufacturer Gemesis to refrain from using the term ‘cultured diamonds’ when marketing its products to the public in Germany. The court said that the term was ‘misleading,’ relying at the time of the judgment on the terminology and definitions contained in the Diamond Book of the World Jewellery Confederation (CIBJO).

It is not without significance that vast amounts of energy have been expended trying to find common ground on what diamonds created in a laboratory

should be called. This battle on nomenclature heavily impacts the main concern of the issue, according to International Diamond Council (IDC) Chairman Stephane Fischler. The IDC is pushing to ensure proper disclosure of the level that will result in consumer confidence. Although, Fischler explains, specific industry bodies have made progress on the issue, there is much more work to do, particularly with the word ‘cultured.’

Some producers of synthetic diamonds have argued that they have every right to use ‘cultured’ to describe their product, while others in the gem diamond business are vehemently opposed. Florida-based cultured diamond manufacturer Gemesis has long maintained that it has the right to use the term. In a recent interview with IDEX Online, following the FTC‘s ruling that the use of the term in relation to synthetics was not misleading, the company said it “has always used the terms in conjunction with other disclosure language such as ‘diamonds grown by man‘ and will continue to do so.”

Fischler is among those in the gem industry who find this stance worrying. “Our position is that use of the word ‘cultured’ does not accurately represent the product,” he told IDEX Magazine. The main issue, he says, is one of confusion of origins. The term ‘cultured,’ until its more recent use with synthetics, has traditionally been applied to pearls that are given a ‘helping hand’ by humans but whose production process is still on the whole natural.

Synthetic diamonds, on the other hand, are created by machine in a process that copies what happens in nature when natural diamonds are formed, deep in the bowels of the earth, but is one almost entirely controlled by humans.

Using ‘cultured’ therefore, says Fischler, to describe synthetic diamonds, has the potential to be misleading and use of it should be limited to pearls – lest consumers get the message that diamonds created in a laboratory were actually created through a natural process similar to that of cultured pearls. Therefore the threat, and the concern in the gem industry, is not that gem-quality synthetic diamonds will be set in engagement rings and solitaire earrings and sold in jewelry stores – “Good luck to them,” Fischler says – but that the truth will not be disclosed properly, potentially affecting consumer confidence in the diamond industry as a whole. “We are adamant that in the future, people – including retailers and the authorities – will ban the term ‘cultured’ in reference to synthetics,” Fischler says, adding that he is actually more concerned with the attitude of “some synthetics producers” whose marketing activities are conveying to consumers the idea that synthetic diamonds are more ‘socially conscious’ than their natural counterparts, or even ‘conflict free,’ in contrast with diamonds from Africa.

This will do more harm to the artisanal diamond miners in Africa who rely on the revenue from the natural diamonds they dig out of the ground, Fischler says, adding forcefully that he is “quite concerned” that these marketing objectives will actually hurt the people of Africa for whose benefit they claim to be acting. Almost on cue, shortly after these comments were made, the San Francisco Chronicle published an article entitled, “Lab-Grown Diamonds Sparkle Blood-Free.” The piece was written following the first lab-made diamond conference held in San Francisco in September and pointed out that, although some in the industry expected Gemesis to peddle its wares as “conflict free,” Gemesis President and CEO Stephen Lux said such apprehensions were unfounded. “We can’t play that angle,” Lux commented to the reporter. “The industry has cleaned up its act. We’ll let the customer draw his or hew own conclusions.”

The significance of such an article was not lost however, and, the following day, a columnist from the same publication, Jon Carroll, wrote that “the great thing about fake diamonds is that they are not taken from the earth with great toil. There is absolutely no slavery, always a comforting thought.” Another well-known name in the synthetic gem-quality diamond industry, Apollo Diamond Gemstone, commented on the issue that, while it “believes in, and promotes, the benefits of full disclosure of origin of all diamonds whether grown by Apollo or extracted through mining,” it cannot help if some consumers choose to buy its brand because of such issues of origin. When queried regarding its position on the promotion of lab-made diamonds as either more environmentally friendly than natural stones or as ‘conflict free,’ the company said, “Apollo recognizes that consumers gravitate to different brands for a variety of reasons and recognizes that origin is one of those.”

On another front of the synthetics field, Jewelers Vigilance Committee CEO and General Counsel Cecilia Gardner was recently at the forefront of a legal movement petitioning the U.S. Federal Trade Commission to amend the Guidelines for the Jewelry, Precious Metals and Pewter Industries to state that it would be unfair or deceptive to use ‘cultured’ to describe gemstones created in a laboratory, specifically diamonds. Leveling a blow to these efforts, and handing a victory to synthetics producers such as Gemesis, the Commission declined to amend the Guides and, in the course of its decision, rejected three surveys that had sought to gauge consumers’ perception of the terms. The FTC stated that, even if the term is misleading, “There is no evidence to suggest that the use of qualifying language in the Guides fails to render the term non-deceptive.”

“In addition, the Commission concludes that there is insufficient evidence to establish that the qualified use of the term ‘cultured diamonds’ is unfair,” it added.

In response, Gardner said that while the FTC did not find the use of the term ‘cultured’ in itself deceptive, if a marketer were to use that term, it would be required to also use the term “laboratory created,” “laboratory grown,” “[manufacturer name] created” or “synthetic,” a response that provided little clarity to the issue.

“The trade associations that signed the petition (a menagerie of alphabet soup including JVC, MJSA, AGTA, JA, CIBJO, the Cultured Pearl Association, AGS, DCA, WFDB and DMIA) universally took the position that the term ‘cultured’ ought to be added to the list of terms that are deceptive and unfair when describing synthetic gemstones,” Gardner commented.

“We are pleased with the FTC ruling as it condones the way that we use the term cultured,” Clark McEwen, COO of Gemesis told IDEX Online at the time. Although the saga continues with no end in sight, Cecilia Gardner confirms that the threat to the gem diamond and jewelry industries from synthetics is not a given and that the real issue is in fact disclosure. “The only threat pertaining to synthetics is related to the possibility of selling them as natural – and this [threat] exists from mine to retail,” she told IDEX Magazine.

“The market for gemstones is very active – and the industry has to ensure that buyers know what they are getting,” an issue she says is addressed through training. “The industry,” Gardner continues, “has to ensure that everyone all through the supply chain is aware of their disclosure obligation – and that these synthetic stones are clearly identified and explained to purchasers.”