Robert Procop filed the suit in Los Angeles over a posting he says wrongly accused him of criminal and civil fraud over a 1985 diamond necklace transaction. He is seeking more than $500,000 in damages.
Hollywood's hottest couple made it official last month after Pitt proposed to Jolie, with whom he has been for six years. The couple have six children, three of them adopted.
Hilton's April 17 posting stated that Procop had not only been sued for fraud, but that an $89,000 judgment had been handed down against him, according to the lawsuit filed at the LA Superior Court.
It also stated that the buyer thought he was getting a 25.5-carat necklace, but in reality it was only 17.62 carats, the suit says.
"The statements that (Procop) was guilty of fraud in connection with a jewelry transaction and that the court in the fraud action had entered a judgment against plaintiff are false," the suit said.
Procop said the claim harmed his reputation, adding that Hilton refused to retract the posting. "As a world-renowned jewelry designer and jeweler, (his) reputation for honesty is of critical importance to his business," it said.
A spokesman for Hilton was not immediately available for comment.
Procop designed Jolie's engagement ring in collaboration with Pitt. The famous Beverly Hills jeweler, who has designed an entire collection inspired by Jolie, worked on the ring for a year.
The April 13 news that Pitt and Jolie - known collectively to fans as "Brangelina" - were engaged put an end to months of speculation about the couple and their plans to marry.
Jolie had stoked the media firestorm when she told ABC News in December that "the kids asked me the other day, and I asked them if it was just because they wanted to have a big cake."
Pitt, 48, and Jolie, 36, became close on the set of 2005 film "Mr. and Mrs. Smith." (AFP)
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