Kay parent request to force Zale to end ad campaign is denied

Thu Jan 24, 2013 4:19pm EST

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Jan 24 (Reuters) - A federal judge on Thursday denied a request by Signet Jewelers Ltd, parent of Kay Jewelers, to force arch rival Zale Corp to drop ads touting some of its diamonds as the world's most brilliant.

The ruling allows Zale, which operates the Zales chain, to continue with a campaign begun in the autumn for its Celebration Fire diamond as it heads into the Valentine's Day period, the second most important for a jeweler after the holiday season.

Signet failed to prove it had suffered "irreparable" damage from Zale's claims, Judge John Adams of U.S. district court in Akron, Ohio, wrote in his ruling.

Any lost sales and customers due to Zale's campaign "could be remedied through an award of monetary damages," making an immediate injunction unnecessary, Adams wrote.

Signet's Sterling unit - whose divisions include Kay and Jared the Galleria of Jewelry - filed a lawsuit on Nov. 13, saying that Zale's ads boasting Celebration Fire diamonds are "the most brilliant diamond in the world" are false because Zale did not test every other cut of diamond in the world.

In its promotional materials, Zale says its claim is based on independent laboratory testing in 2012 of round cut diamonds from select leading national jewelers.

Signet pointed out that it can still seek monetary damages.

"We continue to believe in the strength of the merits of our case and we are moving forward according to the court's schedule," said Signet spokesman David Bouffard.

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