Rolex has secured a permanent injunction against Jewelry Unlimited, a company that it accused of selling modified Rolex watches that it advertised as “100% Genuine Pre-Owned” and “100% authentic as made by the manufacturer.” On the heels of an almost-across-the-board win in November, when a federal court in Georgia found that the strength of Rolex’s marks, the similarity of the two parties’ goods, Jewelry Unlimited’s intent to misappropriate Rolex’s marks, and evidence of actual confusion weighed in favor of Rolex’s trademark-centric claims, Jewelry Unlimited consented to a permanent injunction.
A Bit of Background: The case got its start in July 2023 when Rolex filed suit in the U.S. District Court for the Northern District of Georgia, accusing Jewelry Unlimited, a retail jeweler in Atlanta, and Lalani (collectively, “JU”) of selling modified Rolex watches with customizations, including dial replacement, bezel installation, bracelet swaps, and added diamonds. Given that the modified Rolex watches retain the Rolex logo and branding after being modified by JU, and in light of JU’s advertisement of the watches as “100% Genuine Pre-Owned” and “100% authentic as made by the manufacturer,” Rolex set out claims of counterfeiting, trademark infringement, false advertising, false designation of origin, and unfair competition.
In an order in November, as first reported by TFL, the U.S. District Court for the Northern District of Georgia granted Rolex’s motion for summary judgment as to liability. Among other things, Judge Timothy Batten found that JU’s disclosures about the nature of the watches were “insufficient and fail to warn a reasonable consumer about the relationship (or lack thereof) between JU and Rolex” and that just as the U.S. Court of Appeals for the Fifth Circuit addressed in a nearly identical situation in Rolex Watch USA, Inc. v. Meece, JU’s use of Rolex trademarks on its modified Rolex watches amounts to counterfeiting.
The Judgment & Permanent Injunction
Fast forward to February 21 and in a consent judgment, JU agreed to a permanent injunction, effectively prohibiting it from manufacturing, advertising, or selling any products that bear counterfeit versions of Rolex’s trademarks. The injunction specifically bans JU from: offering up any reproduction, counterfeit, copy, or colorable imitation of Rolex’s registered trademarks; marketing materials that mislead consumers into believing that its products are affiliated with or endorsed by Rolex; and engaging in any other activities that constitute trademark infringement or unfair competition under U.S. law.
As part of the judgment, JU is also required to immediately and permanently cease all sales of counterfeit Rolex products (i.e., watches that were modified without Rolex’s authorization); surrender any existing inventory that violates Rolex’s trademarks; and cooperate with Rolex to ensure compliance with the court’s order.
THE BIGGER PICTURE: The outcome serves as the latest cautionary tale for companies that are in the business of customizing/modifying luxury goods (including but not limited to watches) without the authorization of the brand owners – which, as this cases and others like it indicate – are consistently willing to take action to protect their trademark rights. This case falls neatly in line with Rolex’s enforcement strategy, which has seen it actively pursue litigation against unauthorized sellers globally, leveraging trademark law to protect its prestigious brand image.
Like nearly every other luxury brand in the market, Rolex routinely wages straightforward counterfeiting cases (in which the defendants are offering up watches that were never made/offered up for sale by Rolex). More interestingly, of course, the Swiss watch titan has consistently taken on sellers of customized/modified watches (i.e., watches that are crafted from either brand-new authentic Rolex products or genuine pre-owned ones), arguing that swapping out its authentic watch parts for non-Rolex parts and making use of the Rolex trademark in connection with these altered watches amounts to counterfeiting. It also “renders [the] warranty [on these watches] null and void,” the company has argued.
The court’s decision in this case, followed by the consent judgment, marks the latest win for Rolex when it comes to its crackdown on customizations.
The case is Rolex Watch USA, Inc. v. Jewelry Unlimited, Inc., 1:23-cv-03391 (N.D. Ga.).
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