CHAPTER 585 AN ACT TO PREVENT UNFAIR TRADE PRACTICES IN THE DIA- MOND INDUSTRY. WHEREAS, in the Diamond Industry, the maintenance of fair com- petitive conditions is essential and in the interest of protecting industry, trade and the public; and WHEREAS, any act or practice which fixes or controls prices through combination or agreement, or which unreasonably restrains trade or sup- 522 presses competition, or otherwise unlawfully injures, destroys or prevents competition, and any unfair trade practice is against public policy: Now, therefore, The General Assembly of North Carolina do enact:
Section 2. It is an Unfair Trade Practice for any member of the Diamond Industry: (a) To use, or cause or promote the use of, any trade promotional literature, advertising matter, guarantee, warranty, mark, brand, label, trade name, picture, design or device, designation, or other type of oral or written representation, however disseminated or published, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the type, kind, grade, quality, color, cut, quantity, size, weight, nature, substance, durability, serviceability, origin, preparation, production, manufacture, distribution, or customary or regular price, of any diamond or other product of the industry, or which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public in any other material respect. (b) In the sale, offering for sale, or distribution of products of the industry to use the unqualified word diamond as descriptive of or as an identification for any object or product not meeting the requirements specified in the definition of diamond hereinabove set forth, or which, though meeting such requirements, has not been symmetrically fashioned with at least seventeen -17 polished facets. The foregoing provisions of subsection (b) have application to the unqualified use of the word diamond. They are not to be construed as inhibiting: 523 1 The use of the words rough diamond as descriptive of or as a designation for, uncut or unfaceted objects or products meeting the requirements specified in the mentioned definition of diamond; or 2 The use of the word diamond as descriptive of or as a designation for objects or products meeting the requirements of said definition of diamond, but which have not been symmetrically fashioned with at least seventeen -17 polished facets when in immediate conjunction with the word diamond, there is either a disclosure of the number of facets and shape of the diamond or the name of a type of diamond which denotes shape and which usually has less than seventeen -17 facets (e.g., rose diamond); or 8 The use of the words imitation diamond as descriptive of or as a designation for objects or products which do not meet the requirements of said definition of diamond but have an appearance similar to that of a cut and polished diamond. When the word diamond is so used, the qualifying word or words shall be of at least equal conspicuousness as the word diamond. (c) To use the words reproduction, replica, diamond-like, or similar terms as descriptive of imitation diamonds. (d) To use the term synthetic diamond as descriptive of any object or product unless such object or product has in fact been artificially created and is of similar appearance and of essentially the same optical and physical properties and chemical structure as a diamond, or to apply the term diamond to any such man-made object or products unless it is immediately preceded in each instance with equal conspicuity by the word synthetic. (e) To use the word perfect or any other word, expression or representation of similar import, as descriptive of any diamond which discloses flaws, cracks, carbon spots, clouds, or other blemishes or imperfections of any sort when examined in normal daylight, or its equivalent, by a trained eye under a ten-power corrected diamond eye loupe or other equal magnifier. The use with respect to a stone which is not perfect of any phase (such as commercially perfect) containing the word perfect or perfectly is regarded as misleading and in violation of this subsection, and this subsection shall not be construed as approving of the use of the word perfect, or any word or representation of like import, as descriptive of any diamond that is of inferior color or make. Nothing is to be construed as inhibiting the use of the word flawless as descriptive of a diamond which meets the requirements for perfect set forth in this subsection. (f) In connection with the offering of any ring or rings or other articles of jewelry having a perfect center stone or stones, and side or supplementary stones which are not of such quality, to use the word perfect without clearly disclosing that such description applies only to the center stone or center stones. (g) To use the term blue white or any other term, expression or representation of similar import as descriptive of any diamond which 524 under normal, North daylight or its equivalent, shows any color or any trace of any color, other than blue or bluish. (h) To advertise, offer for sale, or sell any diamond which has been artificially colored or tinted by coating, irradiating, or heating, or by use of nuclear bombardment, or by any other means, without disclosure of such fact to purchasers or prospective purchasers, or without disclosure that such artificial coloring or tinting is not permanent, if such is the fact. (i) To use the terms properly cut, proper cut, modern cut, well made, or expressions of similar import, to describe any diamond that is lopsided or so thick or so thin in depth as materially to detract from the brilliance of the stone. (j) To use the unqualified expressions brilliant, or brilliant cut, or full cut to describe, identify or refer to any diamond except a round diamond which has at least thirty-two -82 facets, plus the table above the girdle and at least twenty-four -24 facets below. Such terms sheuld not be applied to single or rose-cut diamonds, either with or without qualification. They may be applied to emerald (rectangular) cut and marquise (pointed oval) cut diamonds meeting the abovestated facet requirements when, in immediate conjunction with the term used, disclosure is made of the fact that the diamond is of emerald or marquise form. (k) To use the terms clean, eye clean, commercially clean, commercially white, or any other terms, expressions, or representations of similar import in advertising, labeling, representing, or describing any diamond when such terms are used for the purpose, or with the capacity and tendency or effect, of misleading or deceiving purchasers, prospective purchasers, or the consuming public. -1 To misrepresent the weight of any diamond or to deceive purchasers or prospective purchasers as to the weight of any diamond. The standard unit for designation of the weight of a diamond is the carat, which is equivalent to two hundred milligrams (1/5 gram). While advertisements may state the approximate weight or range of weights of a group of products, all weight representations regarding individual products shall state the exact weight of the stone or stones and be accurate to within 1/200th of a carat (one-half point). (m) To state or otherwise represent the weight of all diamonds contained in a ring or other article of jewelry unless such weight figure is accompanied with equal conspicuity by the words total weight or words of similar import, so as to indicate clearly that the weight shown is that of all stones in the article and not that of the center or largest stone. (n) To use the word gem to describe, identify or refer to any diamond which does not possess the requisite beauty, brilliance, value and other qualities necessary for classification as a gem. Not all diamonds are gems. For example: Small pieces of diamond rough or melee weighing only one or two points are not to be described as gems. Neither should stones which are grossly imperfect or of decidedly poor color be so classified unless they are of such a size as to be rare and desirable and valuable for that reason. 525 No imitation diamond can be described as a gem under any circumstances. (o) In connection with the offering for sale, sale, or distribution of diamonds or articles set with diamonds, to use as part of any advertisement, label, packaging material, or other sales promotion literature, any illustration, picture, diagram or other depiction which either alone or in conjunction with accompanying words or phrases has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning the type, kind, grade, color, cut, quality, size, weight, or character of any diamond, or which has the capacity and tendency or effect of misleading the purchasing or consuming public in any other material respect. (p) To use as part of any advertisement, label, packaging material, or other sales promotion literature, any illustration which exaggerates the size of a diamond inset or enlarges it out of proper proportion to the mounting, without clearly and conspicuously stating either the amount that the diamond has been enlarged in the illustration, or that the diamond in the illustration has been enlarged to show detail. (q) To represent, directly or indirectly, through the use of any statement or representation in advertising or through the use of any word or term in a corporate or trade name, or otherwise, that said member is a producer, cutter, or importer of diamonds, or owns or controls a cutting plant, or has connections abroad through which importations of rough or cut stones are secured, or maintains offices abroad, when such is not the fact, or in any other manner to misrepresent the character, extent, volume, or type of business being conducted. (r) To publish or circulate FALSE or misleading price quotations, price lists, terms or conditions of sale or reports as to production or sales which have the capacity and tendency or effect of misleading purchasers, prospective purchasers, or the consuming public, or to advertise, sell or offer to sell diamonds or articles set with diamonds at prices purporting to be reduced from what are, in fact, fictitious or exaggerated manufacturers or distributors suggested retail selling price, or that contains what purport to be bona fide price quotations which are in fact higher than the prices at which such products are regularly and customarily sold in bona fide retail transactions. It is likewise an unfair trade practice to distribute, sell or offer for sale to the consuming public in such manner diamonds or articles set with diamonds bearing such false, fictitious, or exaggerated price tags or labels. (s) To offer for sale, sell, advertise, describe, or otherwise represent diamonds or diamond-set merchandise as close-outs, discontinued lines, or special bargains, by use of such terms or by words or representations of similar import, when such is not TRUE in fact; or to offer for sale, sell, advertise, describe or otherwise represent such articles where the capacity and tendency or effect thereof is to lead the purchasing or consuming public to believe the same are being offered for sale or sold at greatly reduced prices, or at so-called bargain prices when such is not the fact. 526 19 (t) To advertise a particular style or type of product for sale when purchasers or prospective purchasers responding to such advertisement cannot readily purchase the advertised style or type of product from the industry member and the purpose of the advertisement is to obtain prospects for the sale of a different style or type of product than that advertised. (u) To use sale practices or methods which: 1 Deprive prospective customers of a fair opportunity to purchase any advertised style or type of product; or 2 To falsely disparage any advertised style or type or product or, without the knowledge of the customer, to substitute other styles or types of products which the advertiser intends to sell instead of the advertised style or type of product. (v) To advertise or offer for sale a grossly inadequate supply of products at reduced or bargain prices without disclosure of the inadequacy of the supply available at such prices when such advertisement or offer has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers. (w) To describe, identify or refer to a diamond as certified, or to use respecting it any other word or words of similar meaning or import unless: 1 The identity of the certifier and the specific matters or qualities certified are clearly disclosed in conjunction therewith; and 2 The certifier has examined such diamond, has made such certification and is qualified to certify as to such matters and qualities; and 3 There is furnished the purchaser a certificate setting forth clearly and nondeceptively the name of the certifier and the matters and qualities certified. (x) To aid, abet, coerce or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in this Act.