As we recently reported, Sterling Jewelers, owner of the Kay Jewelry and Jared Galleria brands, sued Zale, owner of the Zale and Gordon Jeweler brands, for false advertising under the Lanham Act. See Jan. 16, 2013 BPB Post, “The Brilliance of a Girl’s Best Friend is Challenged.”

Sterling claimed that the Zale’s promotion of its Celebration Fire diamonds as “the most brilliant diamonds in the world” is false.

In addition, Sterling alleges that Zale’s representation that independent testing demonstrated that the Celebration Fire diamond was the world’s most brilliant diamond is an establishment claim that cannot be shown to be truthful.

In addition to damages and a permanent injunction, Sterling also petitioned the court for a preliminary injunction. Preliminary injunctions are considered extraordinary remedies.

Generally, to preliminarily enjoin the actions of the defendant, the plaintiff must show:

  1. there is a strong likelihood that it will prevail on the merits at trial;
  2. it will suffer irreparable harm if the injunction does not issue;
  3. that the injunction would not cause substantial harm to others; and
  4. the public interest will not be disserved by the issuance of an injunction.

A hearing was held in late December and the Court ruled on January 24th, 2013 that Sterling was not entitled to a preliminary injunction because it had not demonstrated irreparable harm.

Specifically, the Court found that if Zale continues its current promotion, the harm to Sterling “at most would be lost sales and possibly lost customers.”

The Court concluded that both items “could be remedied through an award of monetary damages.” Read the Sterling Decision.

Source: Sterling Jewelers, Inc. v. Zale Corporation, Case No. 5:12-cv-02823 (N.D. Oh.).

ITC Denies K-V Pharmaceutical’s Complaint

In October 2012, KV-Pharmaceuticals filed a 337 petition with the International Trade Commission asking the ITC to block importation of the active ingredient 17-HPC.

That ingredient is used in compounding preparations that compete with KV’s Makena brand, an FDA-approved orphan drug indicated for the prevention of premature deliveries in women with at-risk pregnancies. See The Brand Protection Blog Post, “K-V Pharmaceuticals Calls Upon the ITC To Defend Its Makena® Brand,”

Late last year, the ITC declined to investigate the matter and dismissed KV’s complaint. In a December 21, 2012, letter to KV’s counsel the ITC wrote “KV’s complaint does not allege an unfair method of competition or an unfair act congnizable under 19 U.S.C. § 1337(a)(1)(A), as required by the statute and the Commission’s rules.” Read the International Trade Commission’s Letter.

Typically, 337 petitions allege that the importation of goods violate the intellectual property rights of domestic holders of patent, copyright and trademark rights. KV’s complaint did not allege that the importation of 17-HPC infringed any Makena patent, trademark or copyright.

Rather, KV asserted that the U.S. Food and Drug Administration (FDA) had granted the company market exclusivity—akin to the exclusivity enjoyed by patent holders—when it approved Makena under the Orphan Drug Act. KV had previously filed suit to compel the FDA to enforce this grant of exclusivity but a federal court refused to do so. See The Brand Protection Blog post, “Can a Drug Company Require the FDA to Protect the Market Exclusivity of its Brand Drug?”

This history was apparently important to the ITC which cited the federal court decision dismissing the suit and noted that the FDA “is charged with the administration of the Food, Drug and Cosmetic Act.”

Source: International Trade Commission


These updates were prepared by Bob Rouder (rrouder@fulbright.com / 512 536 2491) and Saul Perloff (sperloff@fulbright.com / 210 270 7166) of Fulbright’s False Advertising Practice.