The US Court of Appeals for the Second Circuit has overturned the dismissal of a copyright lawsuit brought by Rapaport USA against online diamond marketplace Nivoda.
The decision, handed down on 4 September, does not establish that Rapaport's prices are protected by copyright, nor does it find Nivoda liable for infringement. Instead, the court ruled that the case had been dismissed prematurely because questions remain about how Rapaport determines the figures in its weekly Price List.
The subscription-only list provides diamond values and is widely used by the trade as a benchmark for dealer pricing.
Rapaport argues its figures represent its opinion of diamond values, rather than actual transaction prices. According to the company's complaint, it develops the figures using market analysis, research, proprietary knowledge, and decades of industry relationships.
The dispute arose after Rapaport alleged that Nivoda used its benchmark figures on its online marketplace to show how individual diamonds were priced against the Rapaport list and took legal action in January 2025.
Rapaport argued that this use required copying its pricing information and constituted copyright infringement. Nivoda sought dismissal, arguing, among other things, that individual diamond prices could not be protected by copyright.
A lower court agreed, applying the copyright "merger doctrine". The doctrine provides that when an idea can only be expressed in one, or very few, ways, the expression effectively merges with the underlying idea and cannot receive copyright protection. The lower court reasoned that the market price of a particular diamond could be expressed only as a number.
The Second Circuit disagreed, saying the lower court had made an important assumption without sufficient evidence: that Rapaport's figures represented objective market prices.
If the figures instead reflect Rapaport's expert opinion about what a particular diamond is worth, the court said, there may be numerous ways to express that opinion. In that situation, copyright protection could potentially apply.
The appeals court also said the lower court had failed to properly consider the possible range of values that could be assigned to a diamond. The court has now sent the case back to the lower court for further proceedings.
Several issues remain unresolved, including whether Rapaport's copyright registrations cover the weekly lists, whether individual prices are copyrightable and whether Nivoda's actions could qualify as fair use.
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