All images featuring colorful Rolex watches have been scrubbed from La Californienne’s Instagram page and its other social channels temporarily suspended, as the custom watch company has managed to settle the lawsuit that Rolex filed against it. In a jointly-filed judgment by consent and permanent injunction both dated May 28, the court has signed off on a final judgment in favor of Rolex and against La Californienne in connection with the trademark infringement, counterfeiting, and unfair competition lawsuitthat Rolex filed in November 2019.
In accordance with the judgment and injunction, which Judge Gary Klausner of the U.S. District Court for the Southern District of New York signed late last week, La Californienne is subject to a final judgment for trademark counterfeiting, trademark infringement, and false designation of origin and unfair competition, and permanently barred from engaging in an array of specific conduct, namely, “using any of the Rolex registered trademarks or any reproduction, counterfeit, copy or colorable imitation of the Rolex registered trademarks in connection with the advertisement, promotion, offering for sale, or sale of its altered Rolex watches.”
The Los Angeles-based company – which is in the business of customizing authentic, pre-owned luxury watches, including Rolex models, and selling them by way of established retailers, like Farfetch and Goop, for upwards of $6,500 – is also barred from “engaging in any course of conduct likely to cause confusion, deception, or mistake, or dilute the distinctive quality of the Rolex registered trademarks.” Additionally, La Californienneis legally prohibited from using or continuing to use the Rolex marks on its “website, the Internet (either in the text of a website, or as a keyword, search word, metatag, or any part of the description of the site) or in any promotion or advertising in connection with its altered Rolex watches or any goods or services not authorized by Rolex.”
In short: the parties’ settlement enables La Californienne to continue to customize and sell Rolex watches, but not with Rolex’s name or its various trademarks, such as its crown symbol, attached to the watches, themselves, or on any advertising of the watches.
The terms of the parties’ agreement give La Californienne 10 days to “take all steps necessary to remove from [its] websites, or any other website containing content [it has] posted … offering for sale altered Rolex watches,” which is why its Instagram is now devoid of any Rolex offerings. “Notwithstanding the foregoing,” the Judgment states that, ”if asked, La Californienne can advise that its altered Rolex watches were formerly vintage Rolex watches” that have since been modified.”
The settlement comes just days after the parties filed a Proposed Stipulated Judgment by Consent and Permanent Injunction, which was shot down by the court – without prejudice – on the basis that it “resolves only a portion of the parties or claims.” Rolex and Californienne swiftly followed up with an amended filing, which was approved by the court, and brings the case to an end prior to trial. While the previous filing made mention of a confidential settlement agreement, which may have included monetary damages to be paid by La Californienne to Rolex in connection with its previous uses of the Rolex marks, the new filing makes no mention of a confidential agreement or any monetary damages. It does state that “each party shall bear their own attorney’s fees and costs.”
As for La Californienne’s current offerings, it is still selling modified Cartier watches, using Cartier trademarks both on the watches, themselves, and in its descriptions and advertising of those watches, a practice that it argued (in the Rolex case) falls neatly within the nominative fair use doctrine, a specific type of fair use, the nominative kind allows – according to the Ninth Circuit, at least – for the “reasonably necessary” use of another party’s trademark solely to identify that party or its products as long as such descriptive use does not “suggest sponsorship or endorsement by the trademark holder.” (It would have been striking – and potentially quite telling for other pending cases – to see which way the court sided on La Californienne’s fair use argument).
Cartier, which is no stranger to litigation (although seemingly a bit less aggressive than Rolex, which has gone so far as to sue a similarly named New York deli in the past), has not initiated legal action against La Californienne.
As noted in our recent article about the parties’ initial Stipulated Judgment by Consent and Permanent Injunction, the case is a particularly interesting one given that it centers on Rolex’s notorious bright-line rule for how it distinguishes between authentic and counterfeit products (according to Rolex, if sizable changes have been made to an otherwise perfectly authentic watch, that a watch becomes a counterfeit). That definition of counterfeiting – which seems to be broader than the definition of a counterfeit as set forth by the federal trademark statute – is proving to be less than unusual, with Chanel, for instance, pointing to a variation of it in the suit that it filed against What Goes Around Comes Around (“WGACA”).
In that case, Chanel is arguing that the luxury reseller has “built its business by piggybacking on the reputation of a handful of select luxury brands – including Chanel,” and has been actively selling infringing goods and attempting “to deceive consumers into falsely believing [that it] has some kind of approval of or relationship or affiliation with Chanel or that Chanel has authenticated WGACA’s goods in order to trade off of Chanel’s brand and good will.”
In particular, Chanel has taken issue with WGACA’s alleged modification of Chanel products prior to selling them, with counsel for the Paris-based brand arguing in a recent correspondence with the court that “it would be possible to imagine a case ‘where the reconditioning or repair [of a product] would be so extensive or so basic that it would be a misnomer to call the article by its original name, even if the words ‘used’ or ‘repair’ were added.” That case is still underway in the U.S. District Court for the Southern District of New York.
*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).