Business | Retail

Rolex accuses retailer of counterfeit

Swiss watchmaker said in a recent lawsuit that LA-based online retailer, Melrose, is selling counterfeit goods

  • Los Angeles Times
  • Published: 13:19 August 13, 2012
  • Gulf News

  • Image Credit: Bloomberg
  • Rolex Watches USA Inc. has filed more than 280 trademarkinfringement lawsuits since 1985.

Los Angeles: Los Angeles-based Melrose.com boasts that it is the “USA’s No. 1 online retailer of luxury wristwatches.” The company’s president, Krishan Agarwal, said his company sells “pre-owned” watches made by Rolex, Cartier, Breitling and other high-end brands and strives “to make luxury affordable for hard-working individuals.”

Rolex Watch U.S.A. Inc. has a different assessment of Agarwal’s company.

The watchmaker said in a recent lawsuit that Melrose is selling counterfeit goods. The lawsuit, filed at the federal courthouse in Santa Ana, accused Melrose of including counterfeit parts on its restored watches in a deliberate effort “to confuse and deceive the public.” The watchmaker is seeking an injunction that would prohibit the online retailer from including counterfeit parts on Rolex watches or even mentioning Rolex’s brand on its website. 
Agarwal said in an email that his company restores Rolex watches but does not include counterfeit parts. He said the company “will be vehemently defending the lawsuit and our right to resell used authentic goods.” Rolex, one of the most counterfeited luxury brands in the world, has filed hundreds of lawsuits to protect its trademark, said attorney Brian W. Brokate, who has represented the Swiss watchmaker in US courts for more than two decades.

“Rolex is a very high-quality watch. So any time you have the Rolex trademarks appearing on a product that is not 100 per cent genuine Rolex, that harms the consumer,” Brokate said by telephone from his New York office. “They think they’re purchasing a watch that has been manufactured by Rolex and will be serviced by Rolex and is under Rolex’s warranty when in fact they’re purchasing a product whose origin is very questionable.” Federal court records show Rolex Watches USA Inc. has filed more than 280 trademark-infringement lawsuits since 1985. Brokate said Rolex had obtained judgments worth millions of dollars against retailers selling counterfeit merchandise.

When it found out about Melrose.com, a Rolex investigator visited the website and bought three Rolex watches for prices ranging from $3,725 to $9,925, the watchmaker said in the lawsuit.

The company determined that each watch contained some parts from vintage Rolex watches more than 30 years old and some counterfeit parts with counterfeit “crown” trademarks, the lawsuit alleged.

Brokate declined to discuss the Melrose case but said the company believes selling used Rolex watches with counterfeit parts damages consumers because they end up with watches whose quality is not as high as a genuine Rolex. “Most people who are buying the $30 Chinese counterfeit realise what they’re purchasing,” Brokate said. “People buying the product that’s been junked up with after-market products think what they’re buying is genuine and it’s not. When something goes wrong with that watch, who do they blame? They blame Rolex.”

Agarwal said he uses jewellers to restore used Rolex watches, touching up paint, adding diamonds but never adding counterfeit parts or trademarks. He said the allegations in the lawsuit are “ridiculous.” “If you install after-market rims on a Ford Mustang, it doesn’t mean it’s not a Ford Mustang,” he said.

Melrose.com promotes its brand heavily. The company grew its Facebook fan base to more than 200,000 and ran a Groupon promotion last year, offering $500 worth of merchandise for $200. “You are what you wear,” the ad said.

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