Anyone contemplating making a fast buck by launching a line of “clone” watches based on the classic models of existing brands might want to think again.
Audemars Piguet was awarded $9.8m in damages in a recent US court case after a judge ruled that the trademark rights of its Royal Oak model had been infringed by an imitator.
The Royal Oak, which was launched in 1972 and remains the company’s signature creation, is notable for having a bezel secured by exposed screws, a distinctive, octagonal case and a textured “tapisserie” dial.
The work of the watch designer Gérald Genta – who is said to have created it in a single, overnight sketching session – it is regarded as being among a small group of all-time classics that includes the Rolex Submariner, the Jaeger-LeCoultre Reverso and the Cartier Tank.
Its success has resulted in the production of many direct fakes – copies passed off as having been made by Audemars Piguet – but the recent court ruling concerns a watch that was sold by the Swiss Legend brand under the model name Trimix Diver.
Swiss Legend, which advertises a range of 2,000 models on its website, was launched about 10 years ago and belongs to a big US watch distributor, the SWI Group. Its pretender timepiece retailed at hundreds of pounds rather than the thousands charged for a genuine Royal Oak (the entry-level men’s model costs £9,800), yet the US District Court for the Southern District of New York ruled that selling it still constituted an act of unfair competition.
To arrive at the $9.8m payout, the court awarded the full amount of the defendants’ profits from the sale of the Trimix Diver and trebled them for “bad faith” conduct. Swiss Legend has also been banned from making watches that might infringe other trademarks, and may have to pay Audemars Piguet’s legal fees.
Audemars Piguet’s chief executive, François-Henry Bennahmias, said after the judgment: “The Royal Oak was the first of its kind and, 40 years later, it remains unmatched among prestige sports watches.
“[It is] an authentic icon that is making an indelible imprint on the history of modern watchmaking. thus, we are fully committed to enforcing our rights to the Royal Oak design and insist our trademarks be fully respected.”
Mr Bennahmias would not comment further on the case, since elements of it are continuing – but some of his colleagues in the watchmaking industry who suffer similar problems were more vociferous.
Richard Mille, founder of the high-end watch company that bears his name, says: “The Audemars Piguet ruling at last demonstrates that judges are beginning to understand that legitimate brands are investing millions in infrastructure and design, only for these parasites to come along and copy what we have worked extremely hard to achieve.
“My strategy from the very beginning has been to give a hard time to the people who copy. When you make a watch with no dial or back and an unusual case shape, as we do, copying becomes difficult. But now it is obvious that people are taking legal advice about just how far they can go to copy the spirit of a particular brand without stepping over the line in the way Swiss Legend seems to have done.
“It is difficult to measure the financial effect,” adds Mr Mille. “Look at Rolex, for example. It is the most copied brand in existence, yet its watches sell like hot cakes.”
Equally passionate about fighting the fakers is Jean-Claude Biver, the chairman of Hublot and recently appointed president of the watchmaking division of LVMH.
“We estimate 1m copies of Hublot watches are made every year – the 142,000 pieces we seized last year probably accounts for 10-15 per cent of what was actually made,” Mr Biver says.
“The fake watch is a tragic consequence of a brand’s success, because the people who produce them only copy what they can sell.” He laughs: “So it is also a tragedy if your products are not copied, because that means they are not popular enough.”
Mr Biver points to an important distinction: “But, in the Swiss Legend case, these were not fakes. They were watches made by a genuine company, which operates a proper distribution operation and which is legitimately run.
“That is why Audemars Piguet was able to bring the case to court. It is far more difficult to fight the type of fakers who operate underground and are run by shady organisations.”
He adds: “The fact that these watches were being sold for a fraction of the price of a genuine Royal Oak is irrelevant. What matters is the fact that such products dilute the genuine design and affect the exclusivity of your brand.
“It results in damage to both prestige and exclusivity because, quite frankly, the copies are not worn by the sort of people you want your brand to be associated with.
“In my opinion, the US court’s award of $9.8m to Audemars Piguet was entirely fair. In fact, I think $50m would have been fair. How do you judge the value of potentially having your image destroyed?”
Spot the difference: The test for legal rulings
Stewart Cameron of Glasgow-based patent attorneys Cameron Intellectual Property says the laws regarding aesthetic design rights can be complex and ambiguous. But cases such as that involving the Swiss Legend and Audemars Piguet watches boil down to the simple matter of whether or not one object looks too much like another.
“There are jurisdictional differences around the world, but the key to the law in the UK is that an object does not infringe the rules if it conforms a different overall impression on the informed user. In the case of a watch, an ‘informed user’ might be considered by one judge to be a watch aficionado, whereas a different judge might say it could be any member of the public.
“How different an object needs to be is one of most uncertain areas of intellectual property law. An obvious example is the Coca-Cola bottle, which is a registered design. If someone were to copy that to sell their own brand of drink, it would be a clear infringement.
“It is often said that altering a few elements of a particular design can make it sufficiently different to get around the problem. That is a fallacy. It still needs to conform to a different overall impression.”