Hamilton loses TM case over antique pocket watch parts
Watchmaker Hamilton has lost a trademark dispute after the second US Circuit Court of Appeals held that custom watch brand Vortic’s use of antique parts in wrist watches did not amount to infringement.
The appeals court handed down the decision on Tuesday, September 14, affirming an earlier ruling by the US District Court for the Southern District of New York in February 2020.
In 2017, Hamilton International sued Vortic and its founder, Robert Thomas Custer, for selling wrist watches that featured restored antique pocket watch parts with Hamilton’s trademark, including the Lancaster watch.
Background
Named after the Pennsylvania city where Hamilton was originally based, the Lancaster features restored antique pocket watch movements and front dials made by the Hamilton between 1894 and 1950.
The court heard that Vortic used a restored original front dial, which meant that Hamilton’s trademark became readily visible on the front of the watch.
Vortic produced and distributed 58 of these watches from 2014 to 2018. Each buyer received the watch in a wooden box with a booklet that displayed Vortic’s logo and described Vortic’s manufacturing, assembly, and restoration process.
The box also contained an original watchmaking certificate, when available, as well as a “Vortic Watch Company Authentication Card.” Vortic’s advertisements for the Lancaster similarly emphasised the antique and authentic nature of the watch’s parts.
According to Hamilton, Vortic sold the Lancaster with Hamilton’s mark and without Hamilton’s consent or authorisation, causing confusion as to the watch’s origin and giving the false impression that the watch was offered by, or affiliated with, Hamilton.
Hamilton pleaded claims of trademark infringement and counterfeiting in violation of the Lanham Act, false designation of origin and unfair competition, and injury to business.
But following a bench trial, the federal court in New York entered judgment on all claims in favour of Vortic and Custer after finding that Vortic’s use of the mark was not likely to cause consumer confusion.
The district court, relying on Champion Spark Plug v Sandersfirst (1947) concluded that Vortic had fully disclosed the watch’s restoration and lack of affiliation with Hamilton.
No likelihood of confusion
The court found no likelihood that a significant number of ordinary prudent purchasers would be misled by the use of Hamilton’s mark on the Lancaster.
In reaching its conclusion, the district court also pointed to particular characteristics of the Lancaster which would lead reasonable consumers to view it “as restored antique pocket watch movement, face, and hands that have been reincorporated into a new wristwatch.”
The court further noted the highly sophisticated nature of the customer base, reasoning that the products’ potential customers “would be particularly attuned to the disclosure provided and would almost certainly seek out easily accessible information about the watch before making this substantial investment”.
On appeal, Hamilton argued that the district court erroneously applied case law involving trademark infringement in the context of used goods, when assessing the sufficiency of Vortic’s disclosures. It also challenged the district court’s factual findings.
Hamilton argued that it competed in the same marketplace as Vortic, ie, the watch market, and the district court should have found in favour of a likelihood of confusion.
The district court found, however, that the relevant market was one for antique or refurbished watches.
The appeals court held that this finding was supported by Custer’s testimony that Vortic catered to consumers interested in antiques related to American history, and Hamilton failed to provide any evidence that it sold similar types of watches or that both companies sold their products in the same marketplace.
On Tuesday, the appeals court rejected Hamilton’s arguments. In doing so, it confirmed that a plaintiff in a trademark infringement suit bears the burden of proving that the defendant's use of its mark is likely to mislead consumers and that no particular order of analysis is required by a district court.
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