With the love for diamonds and expensive
jewels, one has to take into consideration-ways of conducting business and how
one would not commit a crime while conducting business. In the business of delivering diamonds and
gemstones to other businesses and individuals, you must be aware of your business liabilities. There are numerous
liabilities while selling gemstones but several liabilities that come to mind
while transporting high end goods would be: trademark infringement, committing
bank fraud, and consumer disclosure.
A case that occurred in 2010 was between
Tiffany (NJ) Inc. and eBay Inc. Tiffany sued eBay for selling counterfeit Tiffany
merchandise on the eBay website. According
to caselaw.findlaw.com, the suit was “action-sounding” in trademark
infringement, trademark dilution, and false advertising. Tiffany does not sell
its merchandise, other than Tiffany’s “retail stores, catalogs, website and
through its Corporate Sales Department.”
Tiffany appealed the case and the appeal was rejected. Personally, it will take any jeweler a great
amount of time to sell jewelry, compared to the prestige of Tiffany & Co.,
Inc., that has developed over the years; they were definitely right in suing, but not in suing eBay. Tiffany has to live up
to the reputation that it has taken decades to build and they just can not allow some website that practically sells anything sell their high-end jewelry. In the eBay and Tiffany & Co., Inc. case,
eBay was not held responsible for the vendors who sold the counterfeit jewelry,
mainly because it was not eBay’s intent to sell counterfeit Tiffany
jewelry. A step that my future business
would have to take, when beginning its jewelry segment is to patent and trademark
all designs. Even though Tiffany was not
protected from a service website, such as eBay, the tort law protects them from
merchandisers and distributors. So if
Tiffany would have done some more homework, they could have sued the company
that massed produced the counterfeit merchandise; but that case could have had
an unfavorable outcome for Tiffany, as well, based on jurisdiction; what if the
counterfeit manufacturer was in China?
Everything depends on the circumstances.
Another liability that my future gemstone
business should understand is bank fraud.
While conducting business, I don’t want to get mixed up with anyone who
has a false bank account, false credit card, or who wants to be deceivable in
handing over any monetary funds, to my business. Thereby committing some type of bank fraud.
In the case of United States v. Wallace LNU, three men were charged with
conspiracy to defraud a bank, attempt to defraud a bank, conspiracy to extort
and use of extortion to collect on an extension of credit. In this case there, were stolen checks and
threats made to an undercover FBI agent, which initially was a hook, line, and
sinker for these guys. These were
dangerous men and I know that I will need personal security and banking
knowledge when conducting face-to-face business. I know that there will be people who will try
to do such things to my business and rob me blind. It is up to me to self-educated and become
aware of banking laws and to protect myself.
My last liability is consumer
disclosure. When selling gemstones
especially diamonds, the FTC or Federal Trade Commission, wants to make sure
that everyone is protected—the seller and the consumer. Things such as diamond weight and diamond
treatment has to be disclosed to the consumer.
This type of thing is not always done, but when it is, it prevents
lawsuits and unsatisfied customers. For
example when describing gems on a website, pamphlet, or catalog, fractional and
decimal weights have to be described as specifically as possible. Here’s the link to the FTC to understand it more in detail. This gives your business
a good reputation and satisfied consumers.
There are many liabilities in the gemstone
wholesaling business; the several mentioned are only but a few. But it gives you something to think about
before, during, and after, starting a business.
I’m still in the business plan phase, but these liabilities and any
others that I can think of, gives me the chance to gather much of the material
needed to start my business.
