Court confirms seizure of partially counterfeit Rolex watches

The Maritime and Commercial Court has upheld the seizure by Customs of two counterfeit watches imported by a person who claimed that he had purchased the watches as private gifts (Case V-21-05, October 24 2006).

In July 2004 Mr Olivero, the owner of a Danish company called 2V Invest ApS, bought two watches - one made of red gold and the other of white gold - on the Internet for $4,300 each. The watches were sent to 2V in Denmark, but were returned to Hong Kong for repair. When the watches were returned to Denmark, they were seized by Customs at Copenhagen Airport. Rolex SA asserted that the watches were counterfeit, whereupon Customs suspended the release of the watches in accordance with Council Regulation 1383/2003 concerning customs action against goods suspected of infringing certain IP rights.

Upon examination of the watches, it appeared that the workings, the written guarantee and the case were original; however, the clock cases, the dials and hands of the watches and the watchbands were counterfeit. Further, the written guarantee did not apply to the workings in question. In addition, the brilliants were poor quality and the sapphires were artificial.

Rolex informed the Maritime and Commercial Court that the price of a new Rolex Oyster Perpetual Datejust in red gold was Sfr62,480 ($50,105) with brilliants on the watchband and Sfr34,480 without brilliants, while the price of an Oyster Perpetual Lady-Datejust in platinum was Sfr65,630.

The court found that the watches were counterfeit. Olivero argued that he had bought the watches as a private citizen as gifts for his wife and sister, and that he imported the watches as a private citizen. The court rejected this argument due to the fact that Olivero had paid for the watches through his company, which led the court to find that it must be presumed that the importation was commercial rather than private. Thus, the court confirmed the suspension of the goods by Customs as the watches infringed Rolex's trademarks.

The court further found that the appearance of the watches was protected by copyright as applied art, and that the alterations made were a violation of Rolex's copyright. The court stated that the right to alter a work of art is a right of the private owner only and, as the alterations were made for or by a company, they were found to be unjustified.
The court ordered that the watches be surrendered to the Danish state to be destroyed.
As the defendant had violated Rolex's copyright and trademark rights, Rolex was entitled to damages and reasonable compensation. The watches had not been brought into trade by 2V and consequently there was no basis for compensation for lost sales or disturbance in the market. However, the court found that Rolex was entitled to reasonable compensation for violation of its copyright and the use of Rolex's trademarks, and awarded Rolex Dkr75,000 ($12,885). Further, 2V was ordered to pay the costs of destruction, as well as Dkr60,000 to cover further costs.

Mads Marstrand-Jorgensen, Norsker & Co, Copenhagen