COWAN 

LIEBOW 

LA' 

BY FEDERAL EXPRESS 

Federal Trade Commission 

May 29, 2012 

6th Street and Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

Attention: Donald S. Clark, Esq., Secretary 

Cowan, Liebowitz & Latman, P.c. 

1133 Avenue of the Americas 

New Yorl<, NY 10036 

(212) 79~9200 Tel 

(212) 575-0671 Fax 

www.cll.com 

CJ. Erickson 

(212) 790-9274 

cje@cU.com 

Re: Advisory Opinion Request of MJJ Brilliaut Jewelers, Inc. 

Marking/Advertising of Precious Metal Jewelry 

Dear Secretary Clark: 

On behalf of our client MJJ BriJliant Jewelers, Inc., New York, New York ("MJJ" or the 

"Company"), and as discussed with Federal Trade Commission Counsel via telephone 

conference, [ .J 

In light of the expected solicitation of public comments governing proposed revisions to the 

Jewelry Guides, the Company believes it will be more beneficial to address these general issues 

in concert with the comments of other interested parties. The Company does, however, seek 

guidance on its proposed marking and advertising of certain products to ensure that its 

procedures are within the letter and intent of the existing Jewelry Guides. This request is 

appropriate under the Commission's Rules of Practice because the proposed marketing andlor 

advertising claims involve a novel question of fact or law for which there is no clear Commission 

or court precedent. 

Product 

the escalating cost of precious metals, notably gold, coupled with increasing demand, 

has resulted in an industry demand for more reasonably priced alternatives. MJJ has inve.sted 

JFK Aml"ORT·OFF[ClI • 2016 LINDEN BIND. Surra 18, ELMONf, NY 11003 • (212) 790-.9200 
Cowan, Liebowitz & Latman, P.C. 

FTC Bureau of Consumer Protection 

May 29, 2012 

Page 2 

significant resources in developing an alternative alloy formulation that preserves the appearance 

and functionality of gold at a more reasonable cost to consumers .. The proprietary alloy, 

identified as [ J (hereinafter, the "MJJ Alloy"), and is 

composed of [ ]% gold (periodic IJlement Au), [ )% silver (periodic element Ag), [ ]% 

__ _palladi urn (neriodic elemenLP_a),_and_[_]O,-'"-hase_metals. 

Law 

The issue herein is whether MJJ Brilliant's proposed use of the term "gold" as part of its 

attempt to accurately identify the specific composition of the MJJ Alloy in jewelry is proper 

under Section 5 of the FTC Act, which declares ''unfair'' or "deceptive acts or practices" 

unlawful. The Cotrunission's Policy Statement on Deception! states that the Commission 

analyzes deceptive business practices under the following rubric: 

1. There must be a representation, omission or practice that is likely to mislead the 

consumer. This includes the "use of bait and switch techniques." 

2. The practice is examined from the perspective of a reasonable person in the 

circumstances. If the practice "is directed primarily to a particular group," such as 

Internet users, "the Commission examines reasonableness from the perspective of that 

group." 

3. The representation, omission or practice must be a material one, i.e" it is likely to affect 

the consumer's conduct or decision regarding the produce or service. 

Thus, an advertisement is "deceptive" if it includes material information that is false or 

that is likely to mislead a consumer acting reasonably under the circumstances. Likewise, an 

advertisement is deceptive if it omits material information, and that omission is likely to mislead 

a consumer acting reasonably under the circumstances.2 Requiring accurate disclosure of 

material terms allows consumers to compare sirhilar services offered by one or multiple 

providers and weigh the different terms being offered in making decisions about what services to 

purchase. 

The Commission has formulated guides for various industry products, which set forth the 

Commission's "current thinking" about claims for certain products. The Jewelry Guides, which 

! Federal Trade Comm'n, Policy 8Mement on Deception (Oct. 14, 1983) 

2 Cliffdale Assocs" 103 F.T.C. at 175 (appending FTC Policy Statement on Deception). 
Cowan, Liebowitz & Latman, P.c. 

FTC Bureau of Consumer Protection 

May 29,2012 

Page 3 

are found at 19 C.F.R. Part 23 ("Jewelry Guides"), are administrative interpretations of Section 5 

of the FTC Act prohibiting "unfair or deceptive" statements or claims in a product's marketing if 

that marketing misrepresents a product's true composition. The underlying intent of these policy 

statements is to ensure that the representations in advertising "will put consumers on notice that 

____ ---.:th.e_p.I~t.Jl.<mtains..Jlertain-precious-metals,-thereb¥-putting_them-in-a-posith;>D-to-inquireof'-th~---- ---

jeweler as to the relevant value of the different metals and the overall value of the product.,,3 

Section 23.1 of the Jewelry Guides expressly states that "It is unfair or deceptive to 

misrepresent the type, kind, grade, quality, quantity, metallic content, size, weight. .. or any other 

material aspect of an industry product." Note 2 to § 23.1 further provides that "To prevent 

deception, any qualifications or disclosures ... should be sufficiently clear and prominent." The 

clear intent of the Jewelry Guides is to avoid deception of, or confusion among, consumer 

purchasers offmished articles of jewelry by prohibiting use of the term "gold" as an adjective for 

finished jewelry. They cannot be read to preclude advertisers from using truthful and accurate 

statements of product content, nor can they be interpreted in a way that prohibits the use of new 

materials developed and recognized throughout the industry subsequent to implementation of the 

Jewelry Guides. 

Industry Standard and Pra1:tice 

Precious metal alloys have become common in the jewelry trade over the past several 

years due to the escalating price of precious metals. The industry is replete with examples of 

advertising, marketing and labeling to such an extent that consumers now require greater content 

detail and clarification of the items they are purchasing. Attached are examples of current 

advertisements that evidence this trend. None of these identify the finished item of jewelry as an 

article of "gold," but rather provide content information to the consumer to avoid confusion and 

deception. We believe the truthful, accurate and complete description of product contents not 

only meets the requirements and intent of the Jewelry Guides, but is mandated by it. The failure 

to disclose this information is inherently deceptive as the broad range and use of precious metal 

alloys in the jewelry trade afford consumers no basis to assess the value of purchased 

merchandise. 

3 Guides for the Jewelry, Precious Metals, and Pewter Industries, 62 Fed. Reg. 16,673, 

16,674 (Apr. 8, 1997). 
Cowan, Liebowitz & Latman, P.C. 

FTC Bureau of Consumer Protection 

May 29, 2012 

Page 4 

Moreover, many of these products are the same color as 10kt., 14kt. and 18kt. gold. The 

similar color, coupled with the high price point of these products, imply a precious metal content. 

Prohibiting a truthful disclosure of the actual precious metal content serves only to exacerbate 

consumer confusion by creating an inability to distinguish between gold alloys of between 1 kt 

_ ancllQJ,<:t. This is clearl)l an unintended.Qonsequence,anda.violationof-atieast-the-intent-of-the----· 

Jewelry Guides. 

The Jewelry Guides were originally designed, in part, to prevent consumer deception and 

confusion when purchasing "finished articles of gold jewelry. A standard was implemented to 

provide a threshold for which a consumer can be assured of obtaining a known value. The 10 kt. 

minimum standard was implemented as the basis for identifying a "finished product as "gold." 

Products consisting of less than 10 kt. cannot, absent more, be identi"fied as gold. The Jewelry 

Guides do not, however, relate to, restrict or limit the use of gold in the construction of finished 

jewelry. In fact, in light of the introduction of new alloys which appear indistinguishable to the 

consumer in terms of look, color and feel, the Jewelry Guides must be read to permit accurate 

and truthful content information. 

In addition, The FTC has previously acknowledged the value of harmonization of U.S. 

and Canadian regulations applicable to trading partners in both jurisdictions. This stems from 

FTC comments on the Canadian Guide to the Precious Metals Marking Act and Regulations. 

The U.S. and Canadian Guides are strikingly similar, both prohibiting a dealer from selling, 

importing or advertising any precious metal article in a manner which is false or misleading as to 

the precious metal content. The Canadian Guides do not restrict the use of the term "gold," or 

prohibit providing an assay report to identify the contents of a gold alloy article, if used in a nondeceptive and non-misleading manner. We believe the U.S. jewelry guides can be read 

consistently with the Canadian guides in allowing MJJ's proposed marketing and advertising, as 

set forth below. 

MJJ Proposed Marketing and Product Stamping 

MJJ is aware that it cannot stamp or market its gold alloy jewelry with the traditional 

karat marking standard as the alloy is admittedly less than 10 karat fineness. The articles are, 

however, constructed of an alloy consisting of the precious metal elements gold, silver and 

palladium, with the appearance and feel of gold. Due to its unique new nlUlle and content, the 

composition of the MJJ Alloy is not yet nnderstood within the industry or the public based on 
Cowan, Liebowitz & Latman, P.C. 

FTC Bureau of Consumer Protection 

May 29,2012 

Page 5 

name alone, As with other trademarked or newly created products, market recognition and/or 

customer understanding of the product is based primarily upon information supplied by the 

trademark/patent owner or producer of the goods, Without such efforts, the consumer would be 

unable to malee a well-informed decision as to the product. Our reading of the Jewelry Guides 

. mandate£. thtLl:lcQurateJdentificationof ihe.specificcomposition of the·precious and-nQn-preciQus· 

metals contained within the MJJ Alloy, 

As discussed, MJJ proposes to market its gold alloy jewelry by fully declaring the 

contents, By doing so it is not describing the item as a gold product, but identifying the contents 

in an accurate, truthful, non-deceptive manner. Specifically, MJJ proposes use of the following 

in advertising and marketing materials, and requests confirmation that each is acceptable: 

(1) use of the term: consisting of a proprietary alloy of gold, silver, and platinum, 

(2) a link to a third party assay report identifying the precious metal content of the 

finished article. A representative report is attached. 

(3) identification of the specific percentage content of all precious metals in the 

finished article, 

(4) stamping its merchandise with the company's [ 1 trademark. 

All of the above are in compliance with the Jewelry Gnides as they do not misrepresent 

the advertised articles as gold and non-deceptively describe the items in a way that enables 

consumers to evaluate and compare the items against similar jewelry widely marketed and 

distributed to the public. As set forth above, we believe the proposed language eliminates 

consumer confusion, 

Conclusion 

In light of the Commission's clear jurisdiction and its enforcement activity in this area, 

MJJ has exercised due care in seeking advance direction from the Commission on proposed 

advertising of its jewelry. Based on the foregoing, and in accordance with Section l.3(c) of the 

Commission's Rules of Practice and Procedure, 16 C,F.R, § 1.3(c), we respectfully request that 

the Commission of FTC Staff issue an advisory opinion confirming that the marketing language 

is in accordance with existing law, agency regulations and applicable guidelines governing 
Cowan, Liebowitz & Latman, P,C. 

FTC BUl'eau of Consumer Protection 

May 29, 2012 

Page 6 

precious metal jewelry, as the proposed qualifying statements are accurate, truthful, and 

complete, providing consumers with non·deceptive information regarding the construction and 

value of our client's merchandise. Moreover, the proposed language does not mis-identify the 

wholesale and retail products as gold, nor does it in any way misrepresent the constituent 

__ materials._ - ----- ---- ----- ---- -

Should you have any questions or require additional information, please do not hesitate to 

contact our office. 

Sincerely, 

C.J. Erickson 

cc: MJJ Brilliant Jewelers