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Image: laCalifornienne

Custom watch company laCalifornienne has built up a dedicated following for its colorful takes on vintage Cartier Tank and Rolex Oyster Perpetual timepieces since Courtney Ormond and Leszek Garwacki first set up shop in Los Angeles in 2016. Forbes called the husband-and-wife duo’s offerings “the most beautiful customized watches [on the market],” while Gwyneth Paltrow’s Goop touted the “distinctly modern feel” and “youthful upgrade” that laCalifornienne brings to the market.

Three-year old laCalifornienne has found fans – and stockists – across the globe thanks to its “magnificently, entrancingly bright, colorful, and fun” pieces, as jewelry and watch site JCK describes them. However, one company, in particular, is not keen on laCalifornienne’s creations: the world’s most valuable watch company, Rolex, which filed a strongly-worded suit against the brand and its founders/operators Ms. Ormond and Mr. Garwacki in a California federal court on Friday, calling “Counterfeit!”

Unlike most other fashion and luxury-centric counterfeiting cases, which see brands file suit against third parties for making and selling outright fake products (i.e., products that bear the famous brands’ trademark(s) but are not produced by and/or authorized by the brands), the case at hand is different – and interesting – thanks to Rolex’s notorious bright-line rule for how it distinguishes between authentic and counterfeit products.

laCalifornienne’s business works a bit like this: Ormond and Garwacki source “100% authentic timepieces” – including “pre-owned Rolex watches” – which they put a boldly-hued spin on. They then sell the “Rolex” watches to consumers for between $6,500 and $14,000-plus by way of retailers, such as Browns, Galeries Lafayette, Goop, Maxfield, The Webster, and Farfetch, among others.

The problem, according to Rolex, is that in addition to swapping out its traditional metal wristbands for colorful leather ones (a fair-game move in Rolex’s eyes, as it does not stand to impair the workings of the watches, themselves), laCalifornienne goes a step further. It customizes the watches with a combination of equally colorful – but non-Rolex approved – parts, such as dials, crystals (i.e., the cover located between the dial and the hands), etc. And that is (part of) where laCalifornienne gets itself in trouble.

As distinct from nearly every other product on the market, which can be altered freely by its owner without losing its status as an authentic good, the same is not true for Rolex watches, at least not according to Rolex. In accordance with the 114-year old watchmaker’s long-standing policy, the alteration of its timepieces to include non-authentic Rolex parts (or parts not otherwise approved by Rolex) transforms an authentic watch into a counterfeit. Additionally, such a move “renders Rolex’s warranty [on its watches] null and void,” in large part because the swapping of parts makes it so that “Rolex can no longer assure the quality or performance of such watches.”

So, despite the fact that laCalifornienne’s watches, themselves, bear the Rolex name and other trademarks of the brand, and regardless of their origin as authentic Rolex watches, the American arm of the Swiss stalwart asserts that laCalifornienne’s watches are “not authorized or sponsored by Rolex” and in fact, are downright, counterfeit because they “have been altered by the substitution or modification of parts not provided or authorized by Rolex.”

In the case at hand, Rolex claims that laCalifornienne’s watches “no longer attain the aesthetic of original pre-owned Rolex watches” and maybe more significantly, they “no longer perform or function to the same quality standards as unaltered pre-owned Rolex watches.”

Further along in its complaint, Rolex points to two particular laCalifornienne watches, which it says it examined and found to differ significantly from its offerings. Speaking of one laCalifornienne watch that a Rolex investigator purchased and another that a laCalifornienne consumer sent to one of Rolex’s official jewelers for service, Rolex says that in addition to containing non-Rolex parts, both watches’ bezels were “bent and not properly fitted to the watch, and therefore [making it so that] water is likely to leak through, and ultimately, adversely affect the dial and movement of the watch,” among other alleged flaws.

Focusing specifically on the fact that at least one laCalifornienne client sent his/her watch to an authorized Rolex dealer for service in October (Rolex refused the watch because company policy prohibits it from “servicing [altered] watches because it cannot guarantee [their] quality or performance”), Rolex claims that laCalifornienne is actually confusing consumers as to the source of its watches and Rolex’s connection with them. Such a likelihood of confusion – which is the central issue in a trademark infringement case – is not dispelled, per Rolex, by the defendants’ “printing of their name on the dial of the altered [products],” since the watches also “bear one or more of Rolex’s registered trademarks.”

That potential for confusion is bolstered by the defendants’ aim to “mislead consumers” in a “calculated manner” by “falsely advertising and offering for sale ‘Rolex watches’ … on its website, Instagram page and Facebook page,” Rolex alleges.

But more than merely confusing consumers as to the nature and origin of the watches, themselves, Rolex claims that laCalifornienne is chipping away at the immense value of its trademark, which it has used for “nearly a century on and in connection with [its] watches and related products,” making it “one of the most famous marks in the world.”

As a result of the esteemed nature of its brand and its high quality offerings, Rolex says that its watches “are known to retain and/or increase in value [after purchase],” making the purchase of a new or “a pre-owned/vintage Rolex watch highly regarded in the watch industry as a smart and reliable investment,” a tenet that quickly becomes void once its watches’ parts are swapped.

In addition to “engaging in a course of conduct [that is] likely to cause confusion, deception or mistake, or injure Rolex’s business reputation” and also “diluting the distinctive quality of Rolex’s registered trademarks,” Rolex claims that laCalifornienne is actively “benefitting and profiting from [its] outstanding reputation for high quality products and its significant advertising and promotion of Rolex watches and the [company’s] trademarks” by making it seem as though its watches are “authorized, sponsored, or approved by Rolex when they are not.”

With all of this in mind, Rolex sets forth claims of trademark infringement and counterfeiting, as well as false designation of origin, and urges the court to grant it injunctive relief to immediately and permanently prevent the laCalifornienne from continuing to sell “counterfeit” or otherwise “infringing” watches. In terms of monetary damages, the famed watch co. asserts that the defendants are on the hook for “an amount representing three times Rolex’s damages and/or [laCalifornienne’s] profits, whichever is greater, or an election of statutory damages [of up to $2,000,000 for each counterfeited mark]; and reasonable attorneys’ fees, costs including investigative fees, and pre-judgment interest.”

Here’s a point worth considering in closing: the term “counterfeit” has a formal legal definition in accordance with the Lanham Act (a counterfeit is “spurious mark which is identical with, or substantially indistinguishable from, a registered trademark”), which means that it is not a term that is up for interpretation by individual brands, themselves. With that in mind, it will be interesting to see how Rolex’s claims play out in court, assuming that laCalifornienne – or any emerging-stage brand, for that matter – has the resources to fight back against a company like Rolex.

*The case is Rolex Watch U.S.A., Inc. v. Reference Watch LLC d/b/a La Californienne; Courtney Ormond; and Leszek Garwacki, 2:19-cv-09796 (C.D.Cal).