A French court has sided with luxury watchmaker Rolex in its ongoing battle against unauthorized customizations of its timepieces, handing down a significant ruling against the watch customization company Skeleton Concept. The Paris Judicial Court determined that Skeleton Concept infringed upon Rolex’s trademark rights, engaging in unfair competition by modifying Rolex watches to an extent that misled consumers about the brand’s involvement.
The case, which concluded earlier this year, saw the court order Skeleton Concept to pay a total of €710,000 in damages to Rolex SA and Rolex France. The ruling centered on the company’s extensive alterations to Rolex timepieces, including deep structural changes like engraving on sapphire glass, cutting internal components, and drilling into dials. These transformations were deemed to exceed the boundaries of permissible customization, which in turn harmed Rolex’s brand integrity and the authenticity guarantees the brand offers to its customers.
The Legal Battle
The conflict began when Skeleton Concept, a company based in Vallee de Cluse, began offering high-end customization services, notably for the highly sought-after Rolex Daytona models. Despite receiving a cease-and-desist letter from Rolex, the company continued to promote its modified watches, arguing that it was simply altering watches already owned by consumers and was not selling products under the Rolex name.
However, Rolex disagreed, filing a lawsuit in 2022 on grounds of trademark infringement, violation of the French Consumer Code, and unfair competition. The company claimed that the modifications, which fundamentally changed the nature of the Rolex watches, misled the public into believing that the alterations were endorsed by or approved by Rolex.
Court’s Findings
The Paris Judicial Court rejected Skeleton Concept’s defense, ruling that Rolex’s trademark rights were not exhausted. It ruled that, even if the original watches had been placed on the market with Rolex’s consent, the extensive alterations significantly changed the identity of the watches to the point where consumers might believe the modified products were produced or authorized by Rolex.
The court also examined Skeleton Concept’s use of Rolex’s name and trademarks on social media, where the company used Rolex-related hashtags and promoted the customized pieces with dual branding, which could easily mislead consumers into assuming a partnership or endorsement. The court found that the disclaimers on Skeleton Concept’s website, which stated that the company neither manufactures nor sells Rolex timepieces, were insufficient to eliminate the risk of consumer confusion.
Additionally, the court ruled that Skeleton Concept violated the French Consumer Code by re-engraving Rolex’s name on modified parts of the watches and mislabeling them as “Swiss Made,” despite the modifications occurring in France. These actions were deemed to distort competition within the luxury watch market.
Financial Repercussions
Considering Skeleton Concept’s reported €3 million annual turnover, the court awarded Rolex €600,000 for trademark damages, €100,000 for moral harm to the brand, and €10,000 for the unfair competition related to the false “Swiss Made” claim. However, the court dismissed Rolex’s claims of parasitic behavior, specifically regarding the company’s reposting of Rolex content on social media, noting that the allegations were not sufficiently specific.
Broader Implications
This ruling underscores the growing legal challenges surrounding luxury watch customizations, especially as courts in the U.S. and internationally take a firmer stance on the issue. It also raises key questions about the boundaries of trademark rights and the implications for the resale and modification of branded products.
As personalization and upcycling continue to gain popularity, this case highlights the delicate balance between consumer creativity and brand protection, with courts now signaling that significant alterations to branded products – even second-hand items – can undermine the trademark rights of luxury brands.
The case, Rolex SA and Rolex France v. Skeleton Concept (RG 22/09315), serves as a reminder of the importance of preserving brand identity and the legal consequences for businesses that engage in unauthorized modifications.
