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establishes only that Worldwide Diamond has apparently lost some amount of business and
business opportunities. The possibility that Worldwide Diamond will suffer insolvency as a
result of actions by Blue Nile and Atit during the pendency of this litigation does not have any
evidentiary support in the record and is speculative and remote. In addition, any injury
Worldwide Diamond has suffered, and might suffer in the future, is compensable with money
damages. Accordingly, I deny Worldwide Diamonds Motion for a Preliminary Injunction.
Background1
Worldwide Diamond manufactures cushion-cut diamonds that generate a hearts and
arrows pattern visible in the presence of light at low magnification (the Ideal Cushion). (Am.
Compl. 14, 17; id. Ex. A.)2 Worldwide Diamond began using the Ideal Cushion Marks in
September 2012, to advertise, promote, distribute, and sell diamonds in the United States. (Id.
26.) It owns the Patent entitled Cushion shaped gemstone, covering the design of its
cushion-shaped diamond, which was issued on September 3, 2013. (Id. 12-13.) Worldwide is
also the owner of the Ideal Cushion trademark issued on May 20, 2014, and the mark over Ideal
Cushion with corresponding diamond design, which is the subject of a pending application filed
November 22, 2013. (Id. 24-25.)
Since 2008 Worldwide and its affiliates have sold more than 7,600 square and cushioncut diamonds embodying the Hearts and Arrows Trade Dress in the United States for more than
$21,000,000 in gross sales. (Id. 19.) Worldwide Diamond has sold more than
in diamonds bearing the Hearts and Arrows Trade Dress worldwide. (Pl. Mem. 4.) 3

Unless otherwise noted, the facts set forth here are drawn from the allegations of the First Amended Complaint. I
assume those allegations to be true for purposes of this background summary. My references to these allegations
should not be construed as a finding as to their veracity, and I make no such findings.

Am. Compl. refers to the First Amended Complaint. (Doc. 22.)

Pl. Mem. refers to the Memorandum of Law in Support of Plaintiffs Motion for Preliminary Injunction. (Doc.

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Worldwide Diamond mines, cuts, and polishes its diamonds in Canada, where the cost
of doing so is significantly higher than it is in other countries, such as India and China. (Id. at
2.) To maintain its profit margin, Worldwide Diamond relies upon its ability to charge its
retailers a premium. (Id.) To do so, Worldwide Diamond has cultivated a reputation of
exclusivity by representing to its consumers that the Ideal Cushion cannot be obtained from any
other source, and only sells its proprietary cuts to brick and mortar retailers. (Id.) Worldwide
does not sell to consumers on the internet. (Id.)
Worldwide Diamond is also a De Beers Sightholder, a position that permits Worldwide
Diamond to obtain a specific number of high quality rough diamonds. (Id. at 2.) In addition,
Worldwide Diamond partners with Forevermark, the De Beers brand reserved for the most
exclusive and reputable diamond manufacturers. (Id. at 3.) As a result, Worldwide Diamond
must maintain certain quality standards to maintain this partnership. (Id. at 3.) All Ideal
Cushion diamonds are then sold with an accompanying Forevermark certification. (10/6 Tr.
33:8-34:4.) 4 The Forevermark certifications cost approximately

each

month and require that Worldwide Diamond have each of its diamonds certified by the
Forevermark Diamond Institute in Antwerp, Belgium. (Pl. Mem. 3.)
Blue Nile, an online retailer of diamonds, also sells cushion-cut diamonds that generate a
hearts and arrows pattern (the Blue Nile Diamonds). (Am. Compl. 35.) Atit supplies Blue
Nile with the Blue Nile Diamonds, (Mehta Decl. 3),5 which Blue Nile began selling in
November 2013, (Forman Decl. 7).6 Defendants also have a patent over these diamonds,

16.)
4

10/6 Tr. refers to the transcript of the preliminary injunction hearing on October 6, 2014.

Mehta Decl. refers to the Declaration of Atit Mehta. (Doc. 23-25.)

Forman Decl. refers to the Declaration of Paul Forman. (Doc. 23-26.)

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which they acquired on March 18, 2014. (Scarpati Decl. Ex. A.)7
Procedural History
Worldwide Diamond filed this action on May 16, 2014. (Doc. 1.) Defendants answered
the Complaint and filed a counterclaim on June 23, 2014. (Docs. 10-11.) Worldwide Diamond
answered Blue Niles counterclaim on July 3, 2014. (Docs. 20-21.) Worldwide amended its
Complaint on July 14, 2014. (Am. Compl.) Defendants answered the Amended Complaint and
counterclaimed on August 7, 2014, (Docs. 27-28), and Worldwide answered the counterclaims
on August 26, 2014, (Docs. 29-30).
On June 24, 2014 Worldwide Diamond moved for a preliminary injunction seeking to
enjoin Blue Nile and Atit from creating, manufacturing, advertising, offering to sell, or selling
diamonds that infringe Plaintiffs rights in its cushion-cut diamond and its diamonds which
generate a hearts and arrows pattern. (Pl. Mem. 1.) Defendants opposed Worldwide Diamonds
Motion for a Preliminary Injunction on July 22, 2014, (Doc. 23), and Worldwide Diamond
submitted its Reply on August 1, 2014, (Doc. 25).8 On October 6, 2014, I heard argument on
Worldwides Motion.9
Legal Standard
A preliminary injunction is an extraordinary remedy never awarded as of right. Winter
v. Natural Res. Def. Council, 555 U.S. 7, 24 (2008). A party seeking a preliminary injunction
must show: (1) a likelihood of success on the merits; (2) a likelihood of irreparable harm in the

Scarpati Decl. refers to the Declaration of Michael Scarpati. (Doc. 23-1.)

The parties have filed unredacted versions of their briefs and supporting documents under seal.

Counsel for Worldwide brought one of its clients diamonds and one of Blue Niles diamonds to the oral argument,
and my law clerk and I were able to view the diamonds from various angles and vantage points. However, since my
decision is based upon Worldwides failure to establish irreparable injury, I do not rely on my observations of the
diamonds during oral argument.

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absence of the injunction; (3) that the balance of hardships tips in the movants favor; and (4)
that the public interest is not disserved by the issuance of the injunction. Salinger v. Colting, 607
F.3d 68, 79-80 (2d Cir. 2010). The party seeking the injunction must demonstrate by a clear
showing that the necessary elements are satisfied. Mazurek v. Armstrong, 520 U.S. 968, 972
(1997) (internal quotation marks omitted); see Juicy Couture, Inc. v. Bella Intl Ltd., 930 F.
Supp. 2d 489, 498 (S.D.N.Y. 2013). A plaintiff seeking an injunction that is mandatorythat is,
that will alter rather than maintain the status quomust show a clear or substantial
likelihood of success. Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 24 (2d Cir. 2004)
(quoting Tom Doherty Assocs., Inc. v. Saban Entmt, Inc., 60 F.3d 27, 34 (2d Cir. 1995)).
Irreparable harm is the single most important prerequisite for the issuance of a
preliminary injunction. Rodriguez ex rel. Rodriguez v. DeBuono, 175 F.3d 227, 233-34 (2d Cir.
1999) (per curiam) (internal quotation marks omitted); accord Naden v. Numerex Corp., 593 F.
Supp. 2d 675, 680 (S.D.N.Y. 2009) (citing Buffalo Forge Co. v. Ampco-Pittsburgh Corp., 638
F.2d 568, 569 (2d Cir. 1981)) (noting that [t]he threat of irreparable injury is a sine qua non).
To satisfy the irreparable harm requirement, Plaintiffs must demonstrate that absent a
preliminary injunction they will suffer an injury that is neither remote nor speculative, but actual
and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve
the harm. Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007)
(internal quotation marks omitted). The movant must establish a likelihood of irreparable harm
before the other requirements for the issuance of a preliminary injunction will be considered.
See Rodriguez, 175 F.3d at 234. In the absence of a showing of irreparable harm, a motion for a
preliminary injunction should be denied. Id.

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Discussion
Worldwide Diamonds claims of irreparable injury described in its declarations and
memoranda submitted in support of its Motion and discussed during oral argument are too
remote, conclusory, and speculative to justify the emergency intervention it seeks.
A. Summary of Worldwide Diamonds allegations and evidence of injury
Worldwide Diamond introduced the Ideal Cushion in September 2012. (Am. Compl.
26.) Worldwide Diamond has marketed itself as the exclusive provider of cushion-cut diamonds
that generate a hearts and arrows pattern, which enables it to charge its consumers a premium.
(Pl. Mem. 2.) Blue Nile began selling the Blue Nile Diamond in November 2013. (Forman
Decl. 7.) From November, 2013 to June 2014, Blue Nile sold
ranging in price from

(Id.)

Worldwide Diamond claims that an unidentified number of its retailers have returned an
unquantified number of the Ideal Cushion diamonds to Worldwide because their customers
believe that they can purchase similar diamonds directly from Blue Nile. (Rothstein Decl. 40.)
Worldwide Diamond also claims that it has lost other opportunities for new business because
customers are expressing doubt that Worldwide Diamond is the exclusive provider of cushioncut diamonds that generate a hearts and arrows pattern, (id. 43), specifically, after learning
that [Worldwide] was not the exclusive provider of cushion-cut diamonds: (1) a Malaysian
diamond retailer decided to delay a contract with Worldwide Diamond,10 (id. 38); and (2) a
U.S. based jewelry manufacturer and distributor withdrew [its] interest in selling the Ideal
Cushion, (id.). Worldwide Diamond is also concerned that this loss of exclusivity may threaten

10

From the record it is unclear whether the Malaysian diamond retailer delayed an existing contract with Worldwide
or delayed entering into a binding contract with Worldwide. (10/6 Tr. 8:5-22.) It is also not clear from the record
whether the Malaysian retailer delayed the contract specifically because it learned about the Blue Nile Diamonds or
for some other reason. (Id. 8:23-25, 9:1-2.)

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its relationship with Forevermark, De Beers, and two U.S. retailers, which could negatively
impact its reputation, sales, and revenues. (Id. 39, 41-42). Finally, Worldwide Diamond
declares that Blue Niles activities will force Worldwide Diamond to lower its prices, which will
lead to Worldwide Diamonds insolvency. (Rothstein Decl. 36-37; 10/6 Tr. 29:8-14.)
B. Worldwide Diamonds asserted injuries are remote and speculative.
To establish irreparable harm, Worldwide Diamond must demonstrate injury that is not
remote or speculative but actual and imminent, and for which a monetary award cannot be
adequate compensation. Tom Doherty Assocs., 60 F.3d at 37. It is not sufficient for a movant
to demonstrate the mere possibility of irreparable harm; the movant must show that it is likely to
suffer irreparable harm if equitable relief is denied. JSG Trading Corp. v. Tray-Wrap, Inc., 917
F.2d 75, 79 (2d Cir. 1990).
Worldwide has not provided any evidence, aside from its mere speculation, that it risks
losing additional customers. It claims that its retailers returned the Ideal Cushion to Worldwide
Diamond because the customers of the retailers can purchase similar diamonds at lower prices
from Blue Nile. (Pl. Mem. 6.) However, Worldwide has not produced affidavits, emails, letters,
or any other form of correspondence from these retailers or customers to substantiate this claim.
The law requires that Worldwide provide something more than its subjective belief that [it] is
injured or likely to be damaged before it will be entitled to injunctive relief. Johnson &
Johnson v. CarterWallace, Inc., 631 F.2d 186, 189 (2d Cir. 1980).
Although Worldwide has purported to identify examples of lost business, it has not
offered evidence that the sales of its cushion-cut diamonds decreased from prior years, or were
below their projections since the Blue Nile Diamonds began to be sold in November 2013. Even
if it had offered such evidence, Worldwide would still need to establish that such decreases were

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due to sales of the Blue Nile Diamonds.

In addition, Worldwide has not put forth any evidence that its business relationship with
either Forevermark or De Beers is in jeopardy. In fact, during the preliminary injunction
hearing, counsel for Worldwide Diamond admitted that neither Forevermark nor De Beers has
contacted Worldwide, or in any other way informed Worldwide Diamond that these relationships
are at risk because of the Blue Nile Diamonds. (10/6 Tr. 34:5-17.) Therefore, the only basis for
the claim that Worldwides relationship with Forevermark and De Beers is in jeopardy because
of the Blue Nile Diamonds is Worldwides subjective belief and speculation. See Johnson &
Johnson, 631 F.2d at 189. Such belief and speculation do not amount to evidence of irreparable
harm.
While Worldwide claims that there is a threat of price erosion, its counsel admitted that
Worldwide Diamond has not lowered its prices. (10/6 Tr. 38:24-39:7.) Nor is there any
evidence, in the form of expert testimony or otherwise, regarding the likelihood of such price
erosion. For example, Worldwide does not claim that its retail customers have requested price
reductions because of the availability of the Blue Nile Diamonds.
C. Any likely injury is compensable with money damages.
Any injury to Worldwide Diamond is compensable with money damages. If Worldwide
Diamond ultimately proves that the unlawful conduct of Blue Nile caused it cognizable harm,
Worldwide Diamonds sales could be compared against its established track record and its
reasonable forecasts to determine the extent of its damages.
1.

Goodwill

Where the loss of a product with a sales record will not affect other aspects of a
business, a plaintiff can generally prove damages on a basis other than speculation. Tom

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Doherty Assocs., 60 F.3d at 38. In general, injury resulting from the loss of goodwill is
irreparable only when the very viability of the plaintiffs business, or substantial losses of sales
beyond those of the terminated product, have been threatened. Id. (emphasis added) (citations
omitted); see also Rex Med. L.P. v. Angiotech Pharm. (US), Inc., 754 F. Supp. 2d 616, 621-23
(S.D.N.Y 2010) (finding irreparable harm from loss of goodwill because producer would be
immediately deprived of its ability to sell an entire line of merchandise and would incur injury
to its overall reputation for reliability during its absence from the market (internal quotation
marks omitted)).
Here, any loss of goodwill would result from [Worldwide Diamonds] inability to
continue operating [its Ideal Cushion] business as [it] had in the past. Dexter 345 Inc. v.
Cuomo, 663 F.3d 59, 63 (2d Cir. 2011). Consequently, Worldwide Diamonds history of
operation . . . ensures that [it] will be able to calculate money damages for any loss of goodwill
[it] may have suffered. Id.; see also, e.g., Skydive Arizona, Inc. v. Quattrochi, 673 F.3d 1105,
1112-13 (9th Cir. 2012) (district court did not abuse its discretion in upholding jury award of
actual damages for loss of goodwill under the Lanham Act); Toltec Fabrics, Inc. v. August Inc.,
29 F.3d 778, 780-81 (2d Cir. 1994) (collecting cases calculating damages for loss of goodwill).
Worldwide Diamond has sold more than 7,600 diamonds that generate the hearts and
arrows pattern, 11 (Rothstein Decl. 28), and manufactures at least fifteen different types of
proprietary cut diamonds, (Pl. Mem. 3). However, during the preliminary injunction hearing,
counsel for Worldwide Diamond did not know what percentage of Worldwide Diamonds

11

In comparison, Blue Nile sold only

Blue Nile Diamonds from November 2013 to June 2014. (Forman Decl.
7.) Even if every sale of the Blue Nile Diamond is a diverted sale of the Ideal Cushion from Worldwide Diamond, it
is inconceivable that these losses would result in the complete destruction of Worldwide Diamonds business.
Furthermore, during oral argument counsel for Worldwide acknowledged that Blue Nile has not sold a significant
amount of the Blue Nile Diamonds. (10/6 Tr. 35:7-14.)

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business is based on sales of the Ideal Cushion. (10/6 Tr. at 36:23-37:4.) Nor has Worldwide
quantified the number of retailers who purportedly returned diamonds or the number of
diamonds that were returned. Without this information it is impossible to even speculate
whether such returns or loss of goodwill would threaten the viability of Worldwides overall
business, or to project what losses, if any, might occur in the future. See Tom Doherty Assocs.,
60 F.3d at 38. Therefore, Worldwide has failed to carry its burden of showing that any harm
resulting from the loss of goodwill is irreparable.
2.

Lost Business Opportunities

Injunctive relief is warranted only where a movant claimed money damages that were
hard to measure plus irreparable harm, including loss of reputation, goodwill and business
opportunities. CRP/Extell Parcel I, L.P. v. Cuomo, 394 F. Appx 779, 781 (2d Cir. 2010)
(summary order) (emphasis in original). Here, Worldwide Diamond has failed to make such a
showing.
With regard to Worldwide Diamonds lost business opportunities with the Malaysian
diamond retailer and the U.S. based manufacturer that withdrew interest, counsel for
Worldwide Diamond was unable to shed any light as to the stage of negotiations, the length or
term of the contract, or the quantity of products to be provided relating to these business
opportunities. (10/6 Tr. 7:23-8:11, 38:13-23.) It is therefore entirely unclear whether
Worldwide Diamond lost an actual, tangible, business opportunity as a result of Blue Niles
purported infringement.
And like Worldwides other claims of irreparable harm, it fails to tie these purported
losses of business opportunities to sales or availability of the Blue Nile Diamonds. Worldwide
does not state that the Malaysian diamond retailer and the U.S. based jewelry manufacturer

10

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delayed doing business or refused to do business with Worldwide because of the Blue Nile
Diamonds. Rather, Worldwide merely states that these businesses decided not to do business
with Worldwide after learning that [it] was not the exclusive provider of cushion-cut
diamonds. (Rothstein Decl. 40; see 10/6 Tr. 8:23-25, 9:1-2.) Worldwide has failed to
establish the causal link between these lost opportunities and the sale or availability of Blue Nile
Diamonds. Although the timing is suggestive of a possible link, Worldwide does not provide
evidence that these businesses took action because of the Blue Nile Diamonds.
In addition, Worldwide Diamond has not asserted any obstacles to calculating damages in
connection with these lost business opportunities. See WorldHomeCenter.com, Inc. v. PLC
Lighting, Inc., 851 F. Supp. 2d 494, 503 (S.D.N.Y. 2011) (denying injunctive relief where
amended complaint alleged only loss of profits, business dealings, and prospective business
opportunities [b]ecause the harm alleged appears to be purely financial and therefore reparable
through monetary damages). Similarly, money damages are sufficient should Worldwide
Diamonds relationship with two of its U.S. retailers terminate because the amount of business
lost would be quantifiable. (See 10/6 Tr. 31:6-14.)
Finally, Blue Nile avers that it has the ability to satisfy any damage award in the event
liability is found. (See Forman Decl. 10.) Therefore, I find no reason that money damages are
insufficient, and Worldwide Diamonds request for injunctive relief is denied.
Conclusion
For the foregoing reasons, Worldwide Diamond has not made a clear showing that it is
imminently likely to suffer irreparable harm without this Courts emergency intervention. I
therefore need not address the other requirements for the issuance of an injunction, and I express
no view concerning Worldwide Diamonds likelihood of success on the merits. See Rodriguez,

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175 F.3d at 234. Worldwide Diamonds Motion for a Preliminary Injunction is DENIED. The
Clerk of the Court is respectfully requested to terminate the pending motion, (Doc. 12).
SO ORDERED.
Dated: November 6, 2014
New York, New York

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