In the luxury industry, and certainly in the watch industry, the ‘brand’ carries a lot of value. This is value that the industry goes to great lengths to build and protect. This goes hand in hand with a never-ending battle against counterfeiters, such as the one detailed in this case. What follows is a story about a counterfeit watch sold for 80 US dollars that ended up costing someone more than 1 Million US dollars.
On this occasion, the Swiss took said battle to New York of all places. More precisely Canal Street, a ‘hot spot for fun and action’ – but also famous for its never ending supply of knockoff-goods from whichever luxury brand has your fancy. While counterfeit goods are a demon that will likely forever haunt the luxury industry, the industry is not about to give up trying to take it down.
While this story concluded just last week, it started as early as May 2012. At that time an Omega private investigator visited 375 Canal Street and documented his purchase of a counterfeit Omega Seamaster watch.
The case which ensued, Omega SA v. 375 Canal LLC, is interesting in the sense that they did not go after the seller of the counterfeit Omega Seamaster but rather went after the landlords (Canal LLC). They deemed the landlord responsible for allowing trademark infringement by its tenants. Omega essentially sued the landlord in Manhattan for what they call ‘contributory’ trademark infringement. The jury agreed and called the landlord ‘wilfully blind‘ to trademark infringement by its tenants.
This wilful blindness is further substantiated in the case notes which clarify that ‘the property has a long history of litigation alleging counterfeiting and trademark violations. In 2006, the City of New York sued Canal for nuisance resulting from the sale of counterfeited merchandise at 375 Canal Street. Canal settled, paid an $8,000 penalty, and agreed that 375 Canal Street could not be used in any way for the sale and/or possession of trademark counterfeit merchandise or pirated merchandise.’
As a result the jury awarded Omega $1.1 million in statutory damages based on the sale of an $80 dollar (!) counterfeit Omega watch.
For the curious legal minds reading here, feel free to dig through the case notes in full right here.