David Yurman has filed suit against warehouse giant Sam’s Club for allegedly selling its jewelry without the authorization to do so. In its complaint, which was filed on September 4th in the U.S. District Court for the Southern District of Texas in Houston, Yurman alleges that "Sam’s Club’s wrongful, unauthorized promotion and sale" of David Yurman-braded jewelry in four Texas outlets and online falsely suggests that Sam's Club is an authorized seller of Yurman products. Moreover, Yurman states: "Sam’s Club tortiously interfered with and intentionally induced the breach of Yurman’s contractual relations with one or more of its authorized retailers." In addition to tortious interference, Yurman is charging Sam's Club with trademark infringement, false designation of origin, and unfair competition. The jewelry brand, which stocks at its own boutiques and at authorized retail stores (think: Bloomingdales, Saks, Nordstrom, etc.), is asking the court to award it monetary damages, as well as to prohibit Sam's from using its trademarks and selling its products.
So, what is really at issue here? Essentially, David Yurman does not want to be associated with stores like Sam's Club. Case in point: “Our company very carefully controls the retail distribution of our merchandise to ensure that David Yurman jewelry and timepieces are available at only the finest jewelry and department stores,” said Phillips Nazro, Yurman vice president and general counsel, in a statement.
In order to see what is going on here, it is important to note what is not. Primarily, Yurman is NOT alleging that Sam's Club is selling counterfeit jewelry (which would also give rise to trademark infringement claims). Instead, it is alleging that Sam's Club is "using of its stylized DAVID YURMAN trademark and reselling wrongfully acquired jewelry products." This implies that Sam's Club acquired the jewelry via the grey market (distribution channels which, while legal, are unofficial and/or unauthorized by the original manufacturer). A common example is the sale of imported goods (bought by small import companies or individuals not authorized by the manufacturer), which would otherwise be more expensive in the country to which they are being imported. Hence, the placement in Sam's Club and the discounted price. So, while the goods themselves are perfectly legal and the way in which Sam's acquired them is also legal, the marketing and subsequent sale of the goods without the authorization of the David Yurman brand is what gives rise to this lawsuit. Chances are, David Yurman did not authorize the importation or resale of the items at issue in the United States.