MORRISVILLE, NC -- (Marketwire) -- 07/27/11 -- Charles & Colvard, Ltd. (NASDAQ: CTHR), the sole manufacturer of created moissanite gemstones, The Most Brilliant Jewel in the World®, learned yesterday that BetterThanDiamond.com allegedly requested that the U.S. Patent and Trademark Office (USPTO) conduct an ex parte re-examination of Charles & Colvard's U.S. Patent No. 5,723,391 (the '391 Patent). BetterThanDiamond.com has not provided Charles & Colvard with a copy of its re-examination request. Charles & Colvard strongly believes in the validity of the '391 Patent and intends to vigorously defend the '391 Patent should the USPTO grant the request.
"This re-exam request is the result of a threat by BetterThanDiamond.com's owner against Charles & Colvard to attack our patents if we did not agree to supply moissanite gemstones directly to it," said Randy McCullough, Chief Executive Officer of Charles & Colvard. "We chose not to partner with BetterThanDiamond.com because we believe the process it uses to alter the color of our gemstones is temporary and in the long term would lessen the durability and value of moissanite in the marketplace. As a result, Charles & Colvard's warranty will not cover moissanite gemstones that have been altered in any fashion."
Mr. McCullough continued, "Although we asked BetterThanDiamond.com several months ago to disclose why it questioned the validity of the '391 Patent, which has never been challenged since its issue over 13 years ago, BetterThanDiamond.com would not specify the basis for its position, refusing to engage with us in any meaningful discussion of the matter. At Charles & Colvard, we are proud to be the industry leader in providing top quality moissanite to discriminating customers, and we will not be coerced into business deals with those who may not share our commitment to quality and unparalleled customer service."
The '391 Patent may be re-examined only if the USPTO finds that the information provided in the request raises "a substantial new question of patentability." The USPTO's determination of this issue is based solely on the information provided in the request and must be completed within three months. Charles & Colvard firmly believes that all of the claims of the '391 Patent are valid and enforceable. Charles & Colvard is confident in the strength of its entire intellectual property portfolio and is committed to vigorously defending, maintaining and strengthening the patents that protect its moissanite gemstones and technology.
In addition, Charles & Colvard has an exclusive supply agreement with Cree, Inc. well into 2015 for the supply of gem-quality silicon carbide that is required to fashion moissanite gemstones.
About Charles & Colvard, Ltd.
Charles & Colvard, Ltd., based in the Research Triangle Park area of North Carolina, is the global sole source of moissanite, a unique, near-colorless created gemstone that is distinct from other gemstones and jewels based on its exceptional fire, brilliance, luster, durability, and rarity. Charles & Colvard Created Moissanite® is currently incorporated into fine jewelry sold through domestic and international retailers and other sales channels. Charles & Colvard, Ltd. is headquartered in Morrisville, North Carolina, and its common stock is listed on the NASDAQ Global Select Market under the symbol "CTHR". For more information, please access www.moissanite.com or www.charlesandcolvard.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements expressing expectations regarding our future and projections relating to products, sales, revenues, and earnings are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations, and contentions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "continue," and similar words, although some forward-looking statements are expressed differently.
All forward-looking statements are subject to the risks and uncertainties inherent in predicting the future. You should be aware that although the forward-looking statements included herein represent management's current judgment and expectations, our actual results may differ materially from those projected, stated, or implied in these forward-looking statements as a result of many factors including, but not limited to, our dependence on consumer acceptance and growth of sales of our products; our dependence on third parties for the sales and marketing of our products to end consumers; dependence on a limited number of customers; our current customers' potential perception of us as a competitor as we enter the finished jewelry business; general economic and market conditions, including the current economic environment; dependence on Cree, Inc. as the current supplier of the raw material; intense competition in the worldwide jewelry industry; the financial condition of our major customers; risks of conducting business in foreign countries; the pricing of precious metals, which is beyond our control; our ability to protect our intellectual property; and possible adverse effects of governmental regulation and oversight, in addition to the other risks and uncertainties described in our filings with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and subsequent reports filed with the SEC. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur except as required by the federal securities laws, and you are urged to review and consider disclosures that we make in the reports that we file with the SEC that discuss other factors relevant to our business.