WWD.com/business-news/legal/gemex-sues-zale-competitor-1902691/

Diamond evaluation firm GemEx Systems Inc. has filed a suit against Zale Corp. for misrepresentation and unfair competition, alleging the jewelry retailer equated a rival’s diamond appraisal method with its own.

This story first appeared in the December 23, 2008 issue of WWD.  Subscribe Today.

According to a complaint filed in U.S. District Court for the Eastern District of Wisconsin in Milwaukee on Dec. 8, GemEx aided Zale in the development of the retailer’s Celebration diamond line between 2006 and 2008. The Mequon, Wis.-based GemEx said Zale used its BrillianceScope evaluation technology as part of an in-store sales program for the line.

GemEx alleged that, after its services were rendered in the Celebration development, Zale retained a competing analysis firm, GS Laboratories, also named as a defendant in the suit, for in-store diamond analysis. In the complaint, GemEx accuses the two companies of equating GS Laboratories’ rating technique with its own and confusing customers.

“We believe this lawsuit to be without merit and intend to fight it vigorously,” said David Sternblitz, vice president and treasurer of Dallas-based Zale. He said the company had no other comment.

“There’s no merit to anything that’s alleged, as far as I’m concerned, and all will come out in due time,” said Sam Barbuzzi, owner of GS Laboratories, also based in Dallas.

GemEx, which also is suing for promissory estoppel and unjust enrichment, is seeking an injunction against the two firms, unspecified damages and court fees.