The Luxury Watch Counterfeiting Phenomena

Published: 21st February 2011
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The watch industry, in recent years, has been subjected more and more to the counterfeiting phenomena. This is an area that is an inviting opportunity for counterfeiters, who are targeting products that are becoming more widespread (and hence at a higher demand) on the market.

According to studies conducted by the watch industry the production of counterfeit watches was estimated at more than 60 million units last year at more than 1.5 billion dollars in value. It does not seem, however, that these estimates are a true reflection of reality, since, in the concerned area, it is extremely difficult to evaluate this phenomenon to its full extent.

Before considering the way in which counterfeit watches are made, a fundamental distinction must be pointed: watches can be divided into two broad categories, one of luxury, high-end, high-quality parts and the other of low price watches, without any special technical or aesthetic qualities and a high incidence rate of fungibility by the consumer.

In the case of 'high end' watches the work of counterfeiters is more profitable and there is higher demand for this type of luxury product by a public which does not have the economic resources needed to be able to purchase the original watch. Because the reproduction of the watch is carried out with materials and technical tools of very poor quality, the profit margin for counterfeiting is quite high for each individual piece made.

If we consider that the street vendors, intermediaries and others involved in the traffic related to counterfeiting are exploited by manufacturers of counterfeits, you can easily understand how the revenue generated by the illegal trade of these products should benefit only a few subjects.

The system for the distribution of fake watches has, in essence, five main channels: 1) the street vendors, 2) small stalls installed in commercial areas, 3) shops selling counterfeits of famous models in an openly manner, 4) mail order, and 5) selling on the Internet.

The counterfeiting of watches usually involves one or more of the following issues:

* trademark infringement: which occurs when a mark is applied, without any law and without permission from its owner (for example, under license) on the different parts of a watch or on its packaging or if the itself is used in advertising;

*when the aesthetic form and / or appearance of the watch are used without permission of the owner of the model and infringement;

* misuse of a geographical indication of provenance: it is sometimes found on a watch or on its packaging in a false indication of origin (the 'Made in ...í inscription);

* patent infringement: is the use misuse of an invention protected by a patent and incorporated in the mechanical watch;

* counterfeit stamps of precious metals which appear on the metal parts of valuable watches( for example a stamp claiming that the watch is made from solid gold when in fact itís only gold platted ).

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