Seiko Moves Against Fake Watches

A serious dent in the watch counterfeiting business in the United States was made recently by Seiko. Between July and September 2000, three lawsuits were filed by Seiko Corp. of Japan, one of the world’s largest watchmakers, and Seiko Corp. of America, its U.S. subsidiary based in Mahwah, N.J. The suits led to the seizure by federal marshals of thousands of fake Seiko watches. Seiko announced the results of the company’s actions on Dec. 18.

“Seiko takes this [counterfeiting] issue seriously and is trying to protect our customers and potential customers from counterfeiters to the greatest extent we can,” says Lawrence Rosenthal, U.S. legal counsel for Seiko. “We want to put a significant bite [on vendors of counterfeit Seiko watches], cut off activity wherever we can, and convey the idea that counterfeiting Seiko watches is not a healthy activity.”

Seiko has always enforced its trademark, and it works closely with U.S. Customs and other federal officials on counterfeiting issues. But the most recent actions were different because they involved the seizure of a substantial number of counterfeit watches, and many of the defendants named were affiliated or somehow connected with one business.

The first suit was filed in July in the U.S. District Court for the Southern District of Florida. Seiko’s preparation had involved purchases of fake watches by undercover investigators, evaluation of them by SCA watch experts, and inclusion of the watches as evidence in the legal suits. Based on that, the court authorized raids by federal marshals at the business facilities of 12 defendants in four cities in three time zones—Los Angeles, New York, Dallas, and Miami, which Rosenthal called “the field headquarters of the operations.” Some 25,000 fake Seiko watches were seized, and a few more were added to the collection during subsequent raids on other defendants in New York during August and September.

That case resulted in a permanent restraining order—issued in mid-December—against the defendants, which enjoins them from dealing in counterfeit Seiko watches.

Based on information from the 12 initial defendants, Seiko brought suit in August against five other defendants in the U.S. District Court for the Southern District of New York, where they obtained a temporary restraining order barring the sale or distribution of counterfeit watches.

That was followed in September by a third Seiko suit in the New York court against two more defendants, based on information obtained in the two prior actions. Seiko again obtained a restraining order against the sale of fake watches.

Many of the counterfeit watches allegedly originated in China, say Seiko officials, and were imported to the United States. However, a great deal of watch counterfeiting now is done domestically. “People bring in blank watches, make up fake dials in their basement, and put them on the watches,” says Rosenthal. Whatever their origin, examination of the watches showed they were of poor quality and likely to stop working within a year.

Seiko announced the lawsuits and their results in mid-December, after the judgment was announced in the Florida case. Negotiations in the two New York cases still are ongoing at press time. Seiko reportedly was seeking permanent injunctions in those cases as well.