An article in the Financial Times published on 31 October 2017 discusses why lab-grown diamonds pose a threat to big miners such as De Beers in the diamond jewellery sector. While sales of lab-grown diamonds are currently only about two per cent of supply in this multi-billion dollar sector, it is reported that they are expected to reach ten per cent by 2030 and perhaps more. Speed of growth is linked to changing consumer taste and reduced costs.
However, consumer taste and cost may not be the only factors to influence the speed of growth of lab-grown diamonds in the jewellery sector. For years, De Beers has sought to protect the natural market by developing equipment and techniques for distinguishing between natural and lab-grown diamonds. However, it is also a matter of public record that a significant portfolio of patents has been amassed directed to single crystal diamond materials suitable for jewellery applications. Lab-growers such as Sumitomo, IIa Technologies, Diamond Foundry, and New Diamond Technology are also seeking to develop a patent position in relation to the growing lab-grown diamond market.
Until recently, the single crystal diamond patent portfolios seem to have laid relatively dormant. However, we’ve begun to see some activity surfacing in recent years. One of the first of a number of more active diamond patent skirmishes actually started back in 2010, when an opposition was filed against a Sumitomo patent for optical quality single crystal CVD diamond material. That opposition was successful in severely limiting the scope of the patent to details of the specific synthesis method, the decision being upheld even after an appeal by Sumitomo. A further opposition to another Sumitomo patent for optical quality single crystal CVD diamond material followed. However, as recently as 4 October 2017, a decision has been issued rejecting the opposition and maintaining the Sumitomo product patent in unamended form. As such, it would appear that Sumitomo has maintained an interesting patent position in relation to optical quality single crystal CVD diamond material suitable for jewellery applications.
In addition to the two actions launched in Europe, it is also a matter of public record that in January 2016, a patent infringement action was launched against IIa Technologies in Singapore. That infringement action is still ongoing and the outcome will be keenly followed by lab-growers around the world.
It remains to be seen whether these skirmishes will escalate within the lab-grown diamond jewellery sector and what effect that may have on the sector’s growth and development. However, given the large start-up and development costs associated with a lab-grown diamond business, it would be wise for companies and investors to consider the patent landscape and freedom to operate issues with the aim of developing a patent position to protect their interests.