Los Angeles-based watch customization specialist laCaliforniene has not commented since Rolex filed a lawsuit in November last year accusing it of counterfeiting its products.
But the company broke cover last week with answers submitted to the charges brought by Rolex at the Central District of California court, arguing that the complaints listed by Rolex do not amount to legal infringements.
It is not the first time Rolex has launched a lawsuit against a customisation specialist. A previous case against Melrose.com in 2013 was settled out of court when a federal judge ordered founder Krishan Agarwal to pay Rolex $8.5 million in damages.
laCalifornienne’s legal team is hoping for a different outcome this time round and looks prepared to fight.
Tony Traina, a writer at Rescapement, a publication and newsletter dedicated to the watch industry, takes up the story …
On January 15, laCalifornienne submitted an answer to Rolex’s complaint filed in the Central District of California and denied the claims brought by Rolex. These denials, include, among others claims, that:
laCalifornienne operated to “advertise, promote, and offer for sale merchandise bearing counterfeit copies” of Rolex’s registered trademarks;
laCalifornienne’s actions included “replacing the original watch crystals; refashioning bezels; and altering the dials by ‘stripping the paint and finish from the original watch face dials and repainting and refinishing them in vibrant colors’”;
laCalifornienne’s watches no longer attained the aesthetic, performance, or function to the same quality standards of original Rolex watches; and
laCalifornienne’s use of Rolex’s trademarks creates the impression that its products and services emanate from Rolex or are authorized or approved by Rolex, causing confusion among consumers and irreperable harm to Rolex.
Stating these facts in its original complaint, Rolex brought three causes of action: counterfeiting, trademark infringement, and false designation of origin and unfair competition, all in connection with the advertising, promotion, and service and sale of watches that are “not genuine products of Rolex.”
In addition to denying the claims brought against it, laCalifornienne raised six affirmative defenses (essentially, saying “yes, maybe we did this, but it’s OK because…”). While some of these affirmative defenses are more legalese than substantive (for instance, alleging that Rolex failed to mitigate any damages that it allegedly suffered and reserving the right to raise additional defenses), there is one potentially interesting defense they’ve raised, called “nominative fair use”.
The nominative fair use doctrine provides an affirmative defense to trademark infringement, allowing someone to use the trademark of another as a reference to describe the other (trademarked) product and compare it to their own.
Californian law says that the nominative fair use defense may apply when the product in question cannot be readily identified without use of the trademark; only so much of the mark is used as is reasonably necessary to identify the product; and the defendant has done nothing that would suggest sponsorship or endorsement by the trademark holder.
By invoking the nominative fair use defense, laCalifornienne is trying to say that it was allowed to use Rolex’s trademarks because it’s merely using them to reference Rolex’s products. Rolex’s retort will be that laCalifornienne was doing much more than that, attempting to trade on and profit from Rolex’s trademarks.
Meanwhile, it’s not clear laCalifornienne is totally confident in its own defense. Since Rolex filed its suit back in November, you’d be hard pressed to find laCalifornienne publicizing its Rolexes: they haven’t posted a Rolex photo on their Instagram since, limiting themselves to colourful Cartier Tanks instead.
Retail partners such as FarFetch still have laCalifornienne watches for sale, and continue to refer to them as Rolex watches.
The case is: Rolex Watch U.S.A., Inc. v. Reference Watch LLC d/b/a laCalifornienne; Courtney Ormond; and Leszek Garwacki, 2:19-cv-09796 (C.D. Cal).