Is this a Hamilton Knockoff? I Believe So

Tiffany Inc. v. eBay Inc., 600 F.3d 93, established that trademark owners have the burden of policing for counterfeit items when their products are sold in an online marketplace. United States Court of Appeals for the Second Circuit.

eBay and Amazon do not have to police their sellers. The trademark owners must do that through a program known as VeRO (Verified Rights Owners).

Here’s a quote from the eBay Help & Contact pages:

As part of our mission, we are committed to helping to protect the intellectual property rights of rights owners and to providing our users with a safe and enjoyable place to trade.  

For this reason, eBay has created the Verified Rights Owner (VeRO) Program so rights owners can report listings that infringe their rights. Any person or company who holds intellectual property rights (such as a copyright, trademark or patent) which may be infringed by listings or items sold on eBay is welcomed to participate in the VeRO Program. 

Question:

How would you like to pay $250 for a quartz watch with a famous logo the trademark owner says isn’t in their catalog?

The price seems reasonable, especially when you consider Hamilton’s lowest priced Khaki is $400 and it only tells the time. It doesn’t have rotating bezels, military time markers, a leather band, screw down crowns or a Tachymeter. With those features, Hamilton watches run closer to $1000.

When we asked Hamilton, actually asked Swatch, about this watch, they told us that it’s not one of theirs.

Is someone bootlegging this model in the US? That’s a question I wanted to ask. I inquired about gray market products and received a surprising response.

Unofficial, unauthorized, or unintended distribution channels don’t exist in the Swatch world.  They don’t have distributors; “our products are not commodities, we own our distribution channels and don’t use third party distributors or wholesalers.”

Another way you might consider the official response infers their employees – account managers or representatives – handle the channel. Some are regional account representatives and others have only one account, like a Lord and Taylor.

Swatch is the largest watchmaker in the world and they own 19 brands including Hamilton, Rado, Omega, Longines and so forth. They don’t need third parties.

Possible Sources

Swatch owns factories throughout China and Thailand and make their own cases, wristbands, dials, hands and movements. They also make parts in Asia that they assemble in Switzerland. Approximately 50% of Swatch’s workforce is Asian.

If you had a third party watch and wanted it to look credible, you could put an off-the-shelf ETA movement in it. That would lend some perceived legitimacy to a watch. That’s not difficult. ETA Quartz movements are made and assembled in Asia and sold generically, unlike ETA mechanical movements.

One design possibility with apparent similarity exists. Notice the model below, which the Singapore Army had made for service personnel. It’s got to be a Hamilton, right?

Take a closer look. Here’s a close-up on the left of the movement in the Singapore Army case. On the right, a Hamilton with a stock ETA movement.

This does not resemble an ETA Movement

This is an ETA movement

Also, the back of this watch does not have a Hamilton crest.

This is a standard back

I’m uncertain whether or not the watch in question is a real Hamilton watch. I do question it. Absent the concentric or related search results on Google and eBay, I haven’t found it in any other market.

You might not like this story if you own one, but let’s give interested folks a chance.

Cognitive Remorse 

Back of watch above

As a start, I suggest you Google this item. It’s listed as a Hamilton H74451833 Men’s Khaki Field Quartz Watch. Click  here to see the Google Search.

You can also see how many of these watches are listed on eBay.

In your searches, notice the Hamilton Ads, which have nothing to do with this watch. Then notice the people who sell it. They’re the same companies that show-up in search results for many watches found on eBay. From a strictly superficial guess, the companies look like a possible syndicate. When you search and see the same sellers offering the same product, it lends some perceived reality to the existence of that product.

I bought the watch pictured above, along with dozens of other watches for a market research project commissioned by a company in the US. I had a budget and had to report on each watch I found. I found results that I didn’t expect.

It takes very few resources to produce a watch like the one above. The trademark holder doesn’t patent their watch styles. They also use
metal molds in the manufacture of their stainless steel cases. Hamilton watches are easy to fabricate.

A Chinese watch manufacturer could assemble one of many such products in-house with off-the-shelf parts. I doubt such a manufacturer would produce this watch since the Chinese government has clamped down on such activities.

More likely than not, someone produced this watch in Thailand. ETA manufactures most of their quartz movements and cases in Thailand. The case is marked “made in Thailand”.

I’m surprised a watch hit the market with an unknown model number, unauthorized sellers and a warranty Hamilton will not honor.

I’m also stumped and surprised to see a number of dealers showing this watch at the same time with similar prices.

The watch above and many other Swatch brands have cases made in Thailand. So much for a notion of purity of the term – “Swiss Made”. That’s another story – what does Swiss Made really mean?

Is it Chinese?

I place a lot of product queries in China. While many people believe the Chinese have a grand plan for creating replicas, it doesn’t fit their business practices. The Chinese have little retail marketing expertise. Many domestic brands exist in China and they are tightly regulated. If they make a domestic brand, that’s their business model.

The other business model involves custom outsourcing.

If I wanted to buy replicas to sell online, I would find a company on the mainland to make specific models. The manufacturer would require a minimum order quantity of 500 units and a hefty deposit up-front.

I haven’t seen companies with off-the-shelf warehouses full of replica watches in China. Most specialty watch manufacturers are small businesses, like Shenzhen Meigeer Watch Co., Ltd. They don’t stock watches. They require MOQs, because they have to set-up an assembly line, stock it with parts and make a run. That’s a typical business model in Shenzen and GZ.

In the screenshot below, you can get an idea of how smaller Chinese firms work. In this situation, the company advertises their ability to manufacturer a watch. They don’t have it “in-stock”. They do have the molds and parts suppliers. If you want to buy this model, they require a substantial deposit and have a MOQ of 500 pieces.

This will give you an idea of the company’s size

Most of the companies that contacted me about replicas were from Thailand. Their government doesn’t go out of its way to regulate industry there.

Here’s the typical talking points I get from Thai companies.

Thailand watch manufacturer, mold existed steel watches replica for Breitling

Thailand watch manufacturer mould existed steel watches replicas
Specification (approximate)
Case diameter: 5cm approx.
Case thickness: 1cm approx.
Case Material: Stainless Steel
Band Length: 25cm approx. (buckle include)
Band Material: Stainless Steel

Back to the Hamilton H74451833 above.

The watch depicted above, comes with an ETA 955.112 movement. You can find this at most on-line parts stores for about $28.50. Here’s an example. Hamilton uses this 1980’s era ETA movement in the several of their quartz watches. As I mentioned above, it’s an off-the-shelf component.

Unauthorized Sellers

What do the on-line retail shops say when asked about the Hamilton H74451833 warranty? They claim a two-year warranty, but it’s the seller’s warranty, not Swatch’s. Almost anyone can offer a two year warranty on a watch when the only vulnerable part is a $28.50 movement. I believe the parts house pays $15 for the movement.

You’ll receive a warranty card if you buy the watch above, but the seller prints those, not Hamilton.

Think how easy it must be to replicate any generic watch. You can buy their movement and hands in a parts store; case manufacturers will make and sell you the cases they use; the glass is generic, dials are cheap.

I contacted Hamilton

Hamilton provides information about the movements they use. When I visited their website, I could not find the model shown above. I thought it might have reached end-of-life. I wrote Hamilton and after several communications, here’s what I got:

“Dear Mr. Adelstein,

Thank you for your reply.

(The seller) is not an authorized Hamilton dealer and so my suggestion to you would be to contact them for further information regarding this timepiece. 

Hamilton would not know the provenance of this particular watch since it was not sold by Hamilton directly.

There are many companies on the internet, this is true, however the only authorized Hamilton site for purchase is our own. 

www.shop.hamiltonwatch.com

Purchases made from companies not authorized by Hamilton are not covered by warranty.”

In a previous email, she wrote:

Please advise where the timepiece was purchased.   The model number H74451833 does not reference in the (Swatch) United States database. [She works in the US].

Hamilton watches do not have serial numbers and so it is important to know where it was purchased. 

Hamilton authorized dealers are listed on www.hamiltonwatch.com    Just click on store locator.

Our only Hamilton authorized online shop is www.shop.hamiltonwatch.com 

I probed further, but according to the company, they don’t have this item in their database. I’m also stumped by the fact they don’t use serial numbers.

What Now?

I contacted eBay and the customer service department transferred me higher on the service ladder until I connected with the right person.

eBay does not have the authority to investigate this matter unless the trademark owner informs eBay of a violation. Swatch doesn’t report even though they are a VeRO member.

Here’s the official wording:

The Verified Rights Owners program (VeRO) allows intellectual property owners to report listings that infringe their rights on the site. 

eBay appreciates our reporting of items, but needs authorization. If we see a Replica Watch and report it, then they will look into it. It must say replica or be an obvious replica. I actually reported a seller once that claimed his products were Bergeon and eBay closed his store. That’s not much help unless the items are obviously counterfeit. In the Bergeon case, the products were obviously counterfeit.

If you want a Hamilton, stop, take a breath and head to their web site. Otherwise, you might have a Singapore movement in the Thai case, because it’s not difficult to make either.

Did you think that a sophisticated movement would guarantee an authentic watch? The patents on many movements used in the market today ran out in 1994. One example of an expired patent is the Valjoux 7750. Anyone can make an identical movement and many do, not necessarily for replicas. Since the movements cost so little, the replica makers buy look-a-like mechanisms without breaking a sweat.

Beware and Read

When I bought the watch above, I naively went to the seller’s website and made my purchase. Considering myself a sophisticated buyer, I didn’t think the company could be questionable. After the sale and the discussion with Hamilton, I went back and read this:

(SELLER’S NAME) purchases goods via authorized dealers and (seller) will warranty watches purchased from our website. We buy all of our products from authorized dealers, and respected industry wholesalers/distributors; therefore we have no pricing restrictions. 

The seller also claims their watches are brand new and have the original manufacturer’s serial numbers intact. I looked at other watch brands I purchased, which they also carry, and didn’t find serial numbers.

Again, Swatch does not use wholesalers and they distribute their own watches. If the Swatch Group Ltd. sells product to a retailer, one of Swatch’s account managers is close by and monitors his or her customers – authorized retail sellers.

Final Thoughts

I doubt questionable selling practices will stop. Blog articles like this make little difference. No interested parties exist to protect consumers and consumers will turn a blind eye. This is just another ripple in the tide of apathy created on a systematic basis by advertisers. They use it and they’re good at it.

$250 for a “new” multi-function Hamilton watch sounds like a great deal. If the watch is a legitimate Hamilton, that’s swell. Check the Hamilton’s web site and see if it’s in their catalog. Swatch divides the models into collections, I don’t know which collection a watch like this would fall. You’ll have to look at dozens of watches before you “don’t find it”.