Suppose you’re thinking of becoming a jewelry designer or are already an independent jewelry designer. In that case, several legal requirements function in this industry. Here, we address some fundamental elements to support emerging jewelers staying on the right side of the law.
Work for Hire
Employers such as emerging jewelers typically employ full-time or part-time employees such as independent jewelry designers. Independent jewelry designers may do the same. If this is the case, you must protect your business by getting your staff members to sign a work-for-hire agreement.
This work-for-hire agreement is a legal contract. It should clearly state that any work that employees create in the scope of their employment or contract position for you is considered work for hire. Because of this status, the emerging jeweler also owns the work as the employer. This copyright protection is valid for 120 years and can be stated in the agreement.
State and Anti-Money Laundering (AML)
Any emerging jewelers or individuals considering becoming jewelry designers must comply with the law. So, if you deal with 50k purchases in covered goods from individuals or businesses outside of the U.S., then you must sign up for the AML program. This program also deals with retailer exceptions, 8300, and SARs. Likewise, the program covers OFAC searching and Denied Party Screening to protect your business from nefarious dealings.
Emerging jewelers can participate in the program, which has five parts and test for compliance once a year. This program is essential because of increasing enforcement in this area (IRS audits & State Department).
You can choose your membership type to access critical resources like the JewelPAC and JVC AML kit to protect your business.
State and AML, Responsible Sourcing
Another element that emerging jewelers face is dealing with responsible sourcing issues. You can use our guide to learn more about where your products come from, including State Department indications regarding sourcing and education on terminology.
FTC Guides and How to Advertise Jewelry
Independent jewelry designers and anyone considering becoming a jewelry designer need help to navigate this complex industry. Part of this process is discovering everything about FTC guidelines and disclosure issues that can impact your business. Many of these disclosure issues involve precious metals, diamonds, pearls, and gemstones and the legal implications surrounding terms such as handmade, disclosure, special claims, and more.
What Does Disclosure Mean?
The purpose of disclosure is to protect US consumers. Primary questions to ask when testing this concept are whether it is:
- Standard: Is it obvious in totality to the average person with no knowledge of the jewelry industry?
- Conspicuous? That is, is it before the cart if online?
FTC guides explain what conduct the FTC finds non-deceptive.
Use of the Term “Handmade”
Independent jewelry designers and emerging jewelers must be careful when advertising their work. Products may be called “handmade” or “hand wrought” only if they meet certain criteria. The product meets these criteria when the “entire shaping and forming of such product from raw materials and its finishing and decoration were accomplished by hand labor and manually controlled methods which permitted the maker to control and vary the construction, shape, design, and finish of each part of the individual product.”
A list of items considered raw materials include: “bulk sheet, strip, wire, precious metal clays, ingots, casting grain, and similar items that have not been cut, shaped or formed into jewelry parts, semi-finished parts, or blanks.”
Eco-Friendly and Conflict-Free Claims
When an emerging jeweler makes a product claim, they must do so within specific parameters.
So, if you make a special claim such as the product being “Green,” then you must be aware of the following:
- When marketing the products, the marketer must be able to substantiate a claim of “green” or “eco-friendly.”
- Green claims are complicated in the jewelry industry because a seller may not know all the supply chain details.
- The “no environmental impact” claim is impossible to substantiate when marketing lab-grown diamonds.
- Not mined, but the manufacturing process involves energy and emits carbon dioxide.
- A marketer can certainly compare the two processes, but an unqualified claim is not appropriate.
Made in USA Claims
If emerging jewelers wish to claim their product is made in the U.S.A., they must note the following:
- The FTC regulates these claims.
- “All or virtually all” of the components of a product must originate in the US to call it “Made in USA.”
- Use the existing doctrine that applies to all industries
- Examples of dos and don’ts:
- You can make qualified claims such as “Designed in New York” or
- “Made in the USA with the World’s Finest Materials”
Online and Social Disclosure
The Federal Trade Commission’s (FTC) “Dot.com” guidelines address several issues which emerging jewelers must consider, for instance:
- An ad that appears one way on a desktop computer may appear differently on a smartphone.
- The link must be obvious and clearly labeled if a hyperlink is used to lead to disclosure.
- If scrolling is necessary to reach a disclosure, that should be indicated by the text or visual cues.
- Disclosures should be made before consumers decide to buy and before they click on “add to shopping cart.”
Emerging jewelers and independent jewelry designers can access JVC’s Free FTC Guides Resource – “Understanding the FTC Guidelines.”
Trademark Overview
Are you thinking of becoming a jewelry designer or already an emerging jeweler? Then, you’ll need to know more about the trademark part of your business. Here are some basics to start you off:
- A trademark is any symbol, word, or device (including sound, color, or smell) capable of identifying your product and distinguishing it from others’ similar products.
- The function of identification of a trademark is that it defines a product as coming from one source as opposed to any other.
- Regarding quality assurance – a trademark symbolizes a consistent quality associated with the products sold under that trademark.
- Once the emerging jeweler obtains their trademark, it acquires protection, so others cannot use the term to describe similar products and services.
How Long Does Your Trademark Protection Last?
In the U.S., the protection of your trademark is indefinite. This means that as long as you continue to use the mark in commerce, it is protected by law, and the term “indefinite” can mean forever!
But you can only retain trademark rights if you continue to use the mark in commerce. If you don’t, this is called ABANDONMENT.
As an emerging jeweler or independent jewelry designer, you must understand that you can also lose your trademark rights if your mark becomes generic for the products it represents. This is called genericide.
Prime examples include” aspirin,” “thermos,” and escalator.” These brand names have become so generic that people use them to identify everyday items. This is why Google never tells you to “Google something” but instead says, “run a search on Google.”
Important: the National Gold and Silver Stamping Act
This act requires that if emerging jewelers stamp their precious metal items with a quality mark (i.e., 14K, 925), they are also required to stamp their federally registered trademark on the item. This action acts as a guarantee of fineness. And once you register your trademark with the U.S. Patent and Trademark Office as an independent jewelry designer, you comply with this federal law that applies to the jewelry business.
Find Out More Because Emerging Jewelers Need Legal Help
JVC Legal simplifies complex regulations in the dynamic industry of emerging jewelers, making it easy to comply with the law. Sign up as a member and access multiple programs, such as AML, to gain compliance certification and learn about trademarks, advertising, and other claims as a budding jewelry designer.
Find out more to ensure you operate your jewelry business within legal parameters.