Lawsuit filed against a number of replica watch sellers

[hambone]

I have been in touch with Andrew and there are some very harrowing events afoot. I'm not going to betray his confidence, but there is serious cause for concern now regarding the future

of our hobby.

[maverick86]

Any indication of when noob will be up and running again? Josh told me they've pretty much vanished, and he said no oth factory make the ap roo..

[highoeyazmuhudee]

guess rolex doesnt like how close theyre getting with the modern pieces and even this 3135 clone.

think Rolex would target vintage only dealers?, they seemed to have abandoned almost all support for pieces 30 years+ patents might also be expired on things such as HE valve designs

[chronoluvvv]

I'm sure that the Dealers are all hurrying from China right now, to some backwards-ass court in the god forsaken Florida panhandle to face these charges.

RoFL !!!

[Legend]

I got an update that Noob factory is open.. has anyone else heard anything?

[Logan]

The genuine makers didn't used to really care about the crappy reps that tourists brought on asian holidays and threw away after a few weeks when the gold rubbed off.. but the modern super accurate reps are a very different story. Expect a lot more pressure

[Watchmeister]

Our hobby may be under siege but never underestimate capitalism. There is too much "gold in them thar hills". I hope it is not the case but it may just be that this business (dealers, factories) has gotten to big to hide itself in which case it will have to evolve. But with billions on the line reps ain't going anywhere. But yeah, in the short to intermediate term we all should be ordering with caution.The other side of this is that the gen manufacturers are getting much tougher on distribution of their parts so hold onto your frankens. You may not be able to replace them.

[panerai153]

I'm not sure about the future, even though we know that it's a big big business. I think I understand our version of capitalism, but I'm not at all sure that I understand the Communist version. Here if a company cheats or screws up, the company gets a little fine, a slap on the wrist, and the CEO gets a multi million dollar "Golden Parachute" in China on the other hand, the company gets fined, but the CEO if lucky gets to spend a lot of years in prison, or if not so lucky, a bullet in the head.

What worries me is the Chinese government wanting to comply with all the Western rules like the WTO requires, decides that in the best interest of the government, replicas, fakes and counterfeits will not exist. If they make that decision, believe me in a police state like China, they have the means and the will to make it happen. If a few factory owners, dealers ,etc are sentenced to long jail terms or executed,I would bet that the josh's,Andrews, etc will rapidly find another profession.

[automatico]

"...hold onto your frankens. You may not be able to replace them."

Good advice imho.

No telling which 'factory' makes MBW/MBK, Yuki etc cases but this latest panic may sooner or later result in lower availability and higher prices.

RWG members (including me) are used to being able to send some $$ off and get Frankenstein Stuff that most 'outsiders' can not get their hands on...that may change but I hope not.

Otoh we are lucky Clark's started selling high quality 5513/1680 and 1675 bezel sets because this makes it a LOT easier to get by with a good mid case and caseback from somewhere besides the u$ual $u$pect$ for our projects.

Things change...

We had a rolex parts account for years and I thought I could always get parts. That has changed...No Parts For You!!

Now I have to scrounge for parts and pay through the nose just like everyone else. My 'rolex hobby' is no more...now it is a 'replica rolex hobby'.

A couple years ago I traded a Yuki 1680 case for a Phong 1655 case because I figured I could get another 1680 case at any time.

Now I am hanging on to what I have left.

[fredfree]

If you make your 'luxury' brands paying

people 10 $/hr to manufacture your "luxury" goods,

then can't complain if the very same people try to earn more money behind your shoulders.

Shortcuts will always show a B side of the coin.

Give people and nations a real reason and interest to kill the counterfeit market and they will.

If exploitation is the game then both parts will play the same game.

[panerai153]

If you make your 'luxury' brands paying

people 10 $/hr to manufacture your "luxury" goods,

then can't complain if the very same people try to earn more money behind your shoulders.

Shortcuts will always show a B side of the coin.

Give people and nations a real reason and interest to kill the counterfeit market and they will.

If exploitation is the game then both parts will play the same game.

You are correct, but what you have here is a virtual police state. the party allows capitalism to flourish as long as it's within their parameters. They have the power to shut down any business they desire. I believe as watchmeister said, maybe they have gotten a little too big and too bold for their own good. Maybe they have adopted the same philosophy as the banks here in the USA, "too big to fail" I doubt that that philosophy will fly in China! Factory owners driving Ferrari's, sending their kids to school in Switzerland, moving money out the country, all is being scrutinized by the authorities. And then along comes a bunch of really high profile companies screaming bloody murder that the Chinese Counterfeiting industry is costing them millions of dollars in lost sales per year, and OH, by the way didn't you guys lobby for years to get accepted into the WTO, and Oh by the way did you read the rules before you signed the documents? Big section about copyright infringement ,intellectual properties, etc,etc. Maybe you folks need to start looking at the rules and enforcing them.

Lets face it most of the luxury brand are still high volume middle to somewhat high priced items. Rolex builds between 800,000 and 900,000 watches per year. I'm sure Omega is near that along with a few other mid range companies. That's a lot of 3-10K watches to sell every year. Cut the sales by 10% and they are looking at a significant downturn in revenue. The big question that will never be answered is just how much does replica sales hurt the luxury brands? It's impossible to tell how many Hermes Bags were not sold because women found a replica that was 99% as good for 20 % of the cost. How many Rolex Subs were not sold because folks were able to find a rep that was 98% as good for 5% of the cost.Although that number is an unknown, obviously the luxury brands think that it's significant enough that they are pulling out all the stops to shut the replica trade down.

As someone else said above, as long as the rep watch trade was cheap knock offs that tourist bought and wore on vacation then either stuffed them in their sock drawer, gave then to their nephew or tossed them out, the makers of luxury brands were not too concerned. the replicas were so awful that the average person could tell that the gold plated Rolex with the gold wearing off was a fake or the quartz Rolex Day/Date. Let the idiot tourist buy a fake for vacation wear, they would never dream of taking the watch home and wearing it around friends. But today, the reps are incredibly accurate. A couple of years ago, there was a scam going on in Florida, really good looking girl goes into a Rolex dealer, charms the sales person into buying her almost brand new DSSD, it was her boyfriends and he left her , or she lost her job and needed some seed money to start another one, just use your imagination, lots of very good plausible stories out there, and if it's a really hot 25-30 year old in a really nice dress,jewelry, etc. Some guys going to fall for it. She gets the money, by the time they discover the watch is a rep, she's long gone. this was on the Rolex forum a couple of years ago, supposedly the scam was pulled at several very reputable jewelers around South Florida. So the point is the reps are getting dangerously close 1:1, including the Rolex movements. I will tell you, when the watch and movements are so close to genuine that a Rolex watchmaker has a very difficult time telling them apart, it will be open season on Rolex. That is one of the reasons I believe that the luxury brands are being so aggressive. This is a preemptive strike, before the reps get any better.

[TeeJay]

I remember reading about the DSSD scam as well. The thing that bugs me, is that the gen companies outsourced the production to increase their profit margin, and are now complaining that there is competition, which they themselves created due to advertizing and pricing...

[panerai153]

I think one thing that has come back to haunt the Swiss watch industry is the very lax 50% rule, which has allowed them to outsource a whole lot of the parts. Guess who is making most of these parts? I bet it isn't Portugal or Slovakia, it's China. If you outsource parts manufacture to other countries, essentially what you are doing is exporting your technology. Lets say Rolex decides to have the Tudor cases made in China, they send the CAD/CAM specs to the plant in China and they build the cases. Who's to know whether or not the plant owner isn't producing another couple of thousand cases to sell to a rep manufacturer? In some respects the Luxury brands in their unrelenting quest to increase the bottom line have created their own monster. They let the Genie out the bottle, and now they want the Chinese government to stuff her back in!!

Interestingly in 2007 the Federation of the Swiss Watch Industry (FH) tried to rewrite the rules upping the value of Swiss made parts and assembly requirements to 80% of the value of the watches. Obviously that rule has been opposed by the manufacturers because it's now 5 years later, and the 50% rule is still in effect. Going to 80% would cut out a tremendous amounrt of outsourcing, but it would cut profits as well.

This may have little to do with the current crackdown, but it is part of the whole situation.

The 50% Rule for Swiss Made watches

Use of the Swiss Made label for watches is covered by an ordinance of the Federal Council dated 29 December 1971. The Swiss standard is often pejoratively referred to as the 50% Rule. However, it has its basis in real life economics. Again, the law merely sets forth a minimum standard. The famous or infamous Swiss Made Ordinance has, for a number of years, been subject to many criticisms, particularly inside the industry, because it is considered too lax, but also in legal circles, where the view is that it no longer fully meets the legal mandate specified in the companion law on trademarks (SR 232.11).

In 2007, the FH plans to seek political action on a proposal which introduces a new aspect to the definition of Swiss made, in the form of a value criterion.

Accordingly, any mechanical watch in which at least 80% of the production cost is attributable to operations carried out in Switzerland would be considered as a mechanical Swiss watch. For other watches, particularly electronic watches, this rate would be 60%. Technical construction and prototype development would moreover need to be carried out in Switzerland. Raw materials, precious stones and the battery would be excluded from the production cost. The Swiss movement in the existing ordinance already has a value criterion, namely the rate of 50%. Considering that here, too, the definition needs reinforcing, the draft amends these value criteria. For mechanical movements therefore, the rate would be at least 80% of the value of all constituent parts. For other movements, particularly electronic movements, this rate would be 60%. Technical construction and prototype development in Switzerland would also be a requirement in this case. The draft also stipulates other provisions concerning the definition of Swiss constituent parts and assembly in Switzerland.

[TeeJay]

I think one thing that has come back to haunt the Swiss watch industry is the very lax 50% rule, which has allowed them to outsource a whole lot of the parts. Guess who is making most of these parts? I bet it isn't Portugal or Slovakia, it's China. If you outsource parts manufacture to other countries, essentially what you are doing is exporting your technology. Lets say Rolex decides to have the Tudor cases made in China, they send the CAD/CAM specs to the plant in China and they build the cases. Who's to know whether or not the plant owner isn't producing another couple of thousand cases to sell to a rep manufacturer? In some respects the Luxury brands in their unrelenting quest to increase the bottom line have created their own monster. They let the Genie out the bottle, and now they want the Chinese government to stuff her back in!!

Interestingly in 2007 the Federation of the Swiss Watch Industry (FH) tried to rewrite the rules upping the value of Swiss made parts and assembly requirements to 80% of the value of the watches. Obviously that rule has been opposed by the manufacturers because it's now 5 years later, and the 50% rule is still in effect. Going to 80% would cut out a tremendous amounrt of outsourcing, but it would cut profits as well.

This may have little to do with the current crackdown, but it is part of the whole situation.

The 50% Rule for Swiss Made watches

Use of the Swiss Made label for watches is covered by an ordinance of the Federal Council dated 29 December 1971. The Swiss standard is often pejoratively referred to as the 50% Rule. However, it has its basis in real life economics. Again, the law merely sets forth a minimum standard. The famous or infamous Swiss Made Ordinance has, for a number of years, been subject to many criticisms, particularly inside the industry, because it is considered too lax, but also in legal circles, where the view is that it no longer fully meets the legal mandate specified in the companion law on trademarks (SR 232.11).

In 2007, the FH plans to seek political action on a proposal which introduces a new aspect to the definition of Swiss made, in the form of a value criterion.

Accordingly, any mechanical watch in which at least 80% of the production cost is attributable to operations carried out in Switzerland would be considered as a mechanical Swiss watch. For other watches, particularly electronic watches, this rate would be 60%. Technical construction and prototype development would moreover need to be carried out in Switzerland. Raw materials, precious stones and the battery would be excluded from the production cost. The Swiss movement in the existing ordinance already has a value criterion, namely the rate of 50%. Considering that here, too, the definition needs reinforcing, the draft amends these value criteria. For mechanical movements therefore, the rate would be at least 80% of the value of all constituent parts. For other movements, particularly electronic movements, this rate would be 60%. Technical construction and prototype development in Switzerland would also be a requirement in this case. The draft also stipulates other provisions concerning the definition of Swiss constituent parts and assembly in Switzerland.

I think that really is the crux of the matter, and even if they redefine The Standard, as you say, the genie is out of the box, and they only have themselves to blame for the entire situation by not only creating the demand, but by then outsourcing in such a way as to feed that demand more cheaply than they do

[Logan]

The Swiss makers seem to be getting painted into a corner market wise, Once upon a time the illusion they sold of superb quality and hand crafted manufacture might have been mostly true, but the prices were not crazy either, so they sold quite a lot, today you're paying $25 grand for a cnc machined, computer designed watch that costs a few hundred dollars to make. Next year it'll be $30k

So the result is a smaller and smaller market, paying more and more for fairly average products. It's a shrinking market and is very fickle, and they have to keep increasing prices to make the equation work.

To make matters worse the quality isn't really measuring up either. Pretty much every big brand has had amateur grade screw ups on mega priced models, simple stuff like parts corroding, platings coming off and dust left inside.