The U.S. Court of Appeals for the Second Circuit has revived a copyright infringement lawsuit involving Rapaport USA, Inc. and Nivoda USA LLC. The court ruled on September 4, 2026, that Rapaport's case against Nivoda, which allegedly copied diamond prices from Rapaport's weekly price list, should not have been dismissed at an early stage. This decision could have significant implications for the diamond pricing industry and how copyright law applies to market price listings.
Rapaport, a well-known information provider in the diamond industry, publishes a weekly price list that is used by dealers to determine diamond prices based on various factors such as size, color, and clarity. The company claims that Nivoda, which operates an online marketplace for diamonds, copied prices from this list and displayed them on its website. The case, filed under docket number 25-1065, began when Rapaport accused Nivoda of copyright infringement, arguing that the copying of its price list constituted a violation of copyright law.
The dispute escalated when Nivoda filed a motion to dismiss the case, asserting that Rapaport had not secured the necessary copyright registrations for the price lists and that the prices themselves were not copyrightable. The U.S. District Court for the Southern District of New York agreed with Nivoda, concluding that the merger doctrine applied. This legal principle states that copyright protection does not extend to expressions of ideas that can only be expressed in a limited number of ways. The district court ruled that allowing Rapaport's case to proceed would improperly protect an idea, as the market prices for diamonds can only be expressed numerically.
In its appeal, Rapaport argued that the district court erred by applying the merger doctrine too early in the process. The Second Circuit agreed, stating that the lower court had not fully explored how the price list was created and whether its prices could indeed be expressed in only one way. The court emphasized that there were still crucial questions regarding the originality of the price list and its creation process, which warranted further examination.
Judge William J. Nardini, along with Circuit Judges Livingston and Pérez, stated in the ruling, "We agree that the district court erred by applying the doctrine on this motion to dismiss because crucial questions remain as to how the price list is created and therefore whether its prices can, in fact, be expressed only one way." The court ultimately vacated the district court's judgment and remanded the case for further proceedings.
This ruling is significant as it underscores the complexities surrounding copyright law, particularly in relation to market pricing and the expression of ideas. The court noted that the merger doctrine must be applied with caution, especially when the ideas at stake involve subjective opinions and market estimates. The court's decision to remand the case allows for a deeper exploration of how Rapaport's price list is formulated and whether it indeed reflects a unique expression deserving of copyright protection.
The implications of this ruling could be far-reaching for the diamond industry and other sectors where pricing information is critical. If the court ultimately finds that Rapaport's price list is protected under copyright law, it could set a precedent for how similar pricing compilations are treated in the future. The decision also raises questions about the balance between protecting intellectual property and ensuring that market data remains accessible to the public.
As the case moves forward, it will be interesting to see how the district court addresses the remaining issues raised by Nivoda, including whether Rapaport's price lists were adequately registered for copyright protection and whether Nivoda's use of the prices constitutes fair use. The outcome of this case could reshape the landscape of copyright law as it pertains to market pricing and the rights of information providers.
In conclusion, the Second Circuit's ruling to revive Rapaport's copyright infringement case against Nivoda marks a pivotal moment in the ongoing legal discourse surrounding copyright law and market pricing. The decision not only highlights the importance of thorough examination in copyright cases but also emphasizes the need for clarity in how copyright law applies to the expression of market data.