DIAMOND.COM: THE LETTER OF THE LAW?

Byline: Vicki M. Young

NEW YORK — Does anybody want to buy a consonant?
If the answer is yes, make sure that the letter — and its subsequent use in cyberspace — doesn’t offend a third party’s sensibilities.
Diamond.com Inc. last month filed a lawsuit against Rapaport Corp. for trademark infringement over Rapaport’s use of the name Diamonds.com for its competing e-commerce site, as well as for defamation over a story in that site’s Rapaport Diamond Report.
The suit, filed in a Miami federal court, classified Diamond.com as an e-commerce site offering consumers an assortment of more than 20,000 diamonds, with a retail inventory value in excess of $20 million. The competitor’s site, Diamonds.com, which started out as a business-to-business vehicle, now sells a limited selection of jewelry to consumers, according to the lawsuit.
Diamond.com, which court papers said is seeking to make an initial public stock offering “within in the next two months [Aug. 31],” is hoping to keep its wheel of fortune spinning by preventing consumers from being diverted to the competing site. It contends in those documents that Rapaport’s use of the Diamonds.com name is “likely to cause confusion among the general public as to the origin of its products.”
Michael Rapaport, the principal shareholder of Rapaport, was also named as a defendant in the suit. He did not return phone calls for comment Friday.
Alan Lipton, chief executive officer and president, told WWD that Diamond.com is reviewing market conditions for the possible IPO plans. Lipton said the company has private funding from the Steinmetz Diamond Group, an international diamond manufacturing and trading group, and Softbank. Steinmetz is the principal shareholder of Diamond.com’s owner, Odimo.com.
Domain names — those words between “www” and a three-letter suffix, like “.com” or “.org” — serve as Internet addresses that allow users to locate and enter a particular Web site. Those names initially are assigned, on a first-come, first-served basis, by various parties, including Network Solutions Inc., a domain-name registrar.
Diamond.com said it was the first to register its name with NSI as a domain name, back in 1993. That action was followed up by a trademark application in September 1999. Court papers state the defendant didn’t file
its trademark application until November 1999 and didn’t register its Diamonds.com name as a domain name until 1994.
As for the defamation claim, that cause of action arose from a statement published in the Rapaport Diamond Report, which, Diamond.com said, “impugned the business and reputation of Diamond.com and Odimo.com.”
Diamond.com is seeking an order barring defendants from using the competing name in connection with diamond selling online, as well as unspecified compensatory and punitive damages.
In a separate matter involving domain names, Sunglass Hut International said last week that it has prevailed in a dispute against http://www.aaanet-inc.com over its use of the “confusingly similar” http://www.sunglasshot.com domain name. The dispute was resolved by the National Arbitration Forum, which ruled that the competitor must turn over the infringing name to Sunglass Hut “at no cost, automatically and without further litigation,” according to the eyewear retailer.

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