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A counterfeit watch is an illegal copy of an authentic watch. Many high-priced luxury brand-name watches such as Rolex, Cartier and Bvlgari are frequently counterfeited and illegally sold on city streets and the Internet.
According to estimates by the Swiss Customs Service, there are some 30 to 40 million counterfeit watches put into circulation each year. For example, the number and value of Customs’ seizures rose from CHF 400,000 and 18 seizures in 1995 to CHF 10,300,000 and 572 seizures in 2005. Counterfeit watch sales are estimated at $1 billion per year.
Forgery of watches became a serious problem in the eighteenth century when Britain came to rival France as the leading producer of quality clocks and watches. By the middle of the century, watchmakers in Augsburg (Germany) and in various small towns in French-speaking Switzerland were producing watches falsely signed with the names of well-known English makers such as George Graham and Eardley Norton. Other, less obvious, forgeries carried imaginary names with a vaguely English sound, such as 'Samson' or 'Simpton'. In the following century Breguet became a frequent target for forgers; at the same time British makers continued to suffer, many forgeries bearing the name 'M. J. Tobias' - a mistake for a real London maker named Michael Isaac Tobias. In the 1860s, when the American watch industry was gaining strength, the Swiss industry was responsible for many imitations of Waltham watches; these, unlike most of the earlier forgeries, often imitated the appearance of the genuine article quite closely as well as borrowing the names. This practice died out in the early 1870s, as the Swiss could not compete, so surrendered the mass-market field to U.S. firms and focused on branding high end status symbols.
Rolex counterfeits are illegally manufactured replicas of Rolex watches. Rolex watches have often been more susceptible to counterfeiting compared to other luxury watches, due their brand enjoying the highest worldwide awareness and ubiquity of their design trademarks (for instance, the Rolex Submariner has inspired plenty of imitations from both higher-end and lower-end legitimate watch makers). Counterfeit Rolex watches commonly retail anywhere from $5 to upwards of $1,000; the latter for high-end replicas with portions fabricated from solid karat gold (although most gold Rolex fakes utilize gold electroplating). Such watches are known by several nicknames such as Fauxlex. The fake Rolex trade has become segmented and the products marketed using glossy color brochures and catalogues containing counterfeited wares produced in China and offered for sale to retail vendors throughout Asia.
Counterfeit watchmaking was previously a cottage industry, but in recent decades organized crime has been involved since this is seen as a low-risk business. There has been an "open market" for these types of watches along Canal Street in Manhattan, New York City for over 20 years. During the 80s and 90s, David Thai, the leader of the infamous Born to Kill gang was well known to have run an illegal counterfeit watch operation on Canal Street in which he was able to profit at least $13 million in 1988 alone from the sales of counterfeit Rolex watches.
Replica watches are frequently sold from street stands in districts catering to tourists, or from Internet websites (mostly Asian). The auction website eBay was previously known having lots of listings for fake watches. Search engines have been increasingly pressured to remove search results of websites that sell fakes. Furthermore, many expensive brands do not sanction any online sales, and instruct customers to only buy watches from authorized retailers.
Swiss Customs estimates that 40% of counterfeit watches come from China, but counterfeits are produced elsewhere, even in the US. EU figures show that at least 54% of fakes seized in 2004 originated in China. According to the Daily Mail, Chinese workers are "being imprisoned so they can’t inform on their bosses. Their families are threatened, and violence and intimidation are part and parcel of the operation. Children are often forced to assemble counterfeit watches and sunglasses as their hands are better suited to handling tiny parts".
The Swiss Customs Service is obliged to confiscate and destroy such goods to prevent re-sale. While there are some exceptions, counterfeit jewellery is confiscated in all cases.
Types of counterfeits
Trademark violations: Infringing on the rightfully owned trademarks, hallmarks, symbols and any other distinctive signs of a reputed watch brand, with or without complete trade-dress or design violation. This extends to other false indications and or markings in violation of any law, or official agreement. Typical noted examples would include "Swiss Made", "Water Resistant", "Shock Resistant", false precious metal or any other "noble metal" indications.
Trade-dress or design violations: The second group involves counterfeit watches designed to resemble the original (a trade dress violation). Some high-priced counterfeit watches are produced from inferior materials and have golden parts and leather straps.
Note that designs are extremely difficult to copyright, thus it is legal for watch makers to freely use designs from their competitors. However, all brands have trademarked their name and symbols.
A common myth states that a genuine watch can be discerned from a fake by the fluid movement of the sweep hand. This is because many counterfeited watches use inexpensive crystal quartz movements which produces the start/stop once per second sweep. Observed closely, one will see that even a true Rolex movement is not a perfectly smooth sweep, but is actually eight movements per second (or 28,800 per hour) in some models or around 21,000 vph. in other models. The only mechanical watches that have a second hand that moves across the dial in a truly uninterrupted sweep are the Seiko Spring Drive. Nonetheless, some of the counterfeits have automatic movements (genuine or imitation), and Rolex has produced a few models with quartz movements such as the OysterQuartz which produces the distinct quartz movement "ticks".
According to the Swiss Customs Service, counterfeit watches can be made in such a manner as to require special equipment to confirm near authenticity. Previously, replica watches could be distinguished by "sloppy printing, soft metal and cheap quartz movements that made the second hand clunk its way round the dial" while recent "fakes feel substantial, keep decent time and have the patina of high quality. Some are so convincing that the only way to tell they’re fake is to take the back off". 
A high price is not a guarantee of authenticity. Indications of fineness do not necessarily indicate authenticity. Hallmarks can be forged, and may induce a buyer to believe a piece is made of real gold when it may only be made of a cheap metal plated in gold. While an authentic watch may be gold plated and gold capped in lieu of solid gold, gold colored counterfeits use a much thinner gold plate which over time would begin to rub off.
High quality replicas are sometimes modified by collectors and amateur horologists with genuine parts, such as movements, dials, hands, and bracelets, and are known as "frankenwatches".
It is in fact possible for a frankenwatch to be made entirely from genuine parts. eBay and other Internet websites have provided the means to buy or sell these parts, which were originally supposed to be after-market spare parts for repair. Some have retrofitted a rare limited-edition dial on a lesser/common version of the same line of watches, and often an original stainless steel watch is disassembled so its dial and movement is placed in an after-market solid gold case. These are difficult to trace, since the watch manufacturer's serial numbers are engraved only in watch case.
A homage watch is a legal replica of a watch. These are timepieces produced to be as similar as possible to often historic watches while usually of high quality while avoiding the use of trademarked names and logos.
- Faits et chiffres, Swiss Customs Service 2005
- "Havocscope Counterfeit Watches Market Value: $1 billion".
- Case Studies, Fake Rolex Facts, Retrieved on 2007-05-12.
- Paul R. Paradise (September 1999). Trademark counterfeiting, product piracy, and the billion dollar threat to the U.S. economy. Greenwood Publishing Group. ISBN 978-1-56720-250-2. Retrieved 26 March 2011.
- "New York Magazine". 1995-03-09. Retrieved 2016-09-24.
- "ANTICOUNTERFEITING CONSUMER PROTECTION ACT OF 1995". 1995-11-28. Retrieved 2016-09-24.
- Faits et chiffres, Swiss Customs Service 2006 at page 32
- Cost of Piracy, manufacturingtalk.com, 2007-02-06, Retrieved 2014-12-22.
- Importation de bijoux et de montres pour usage en propre, Info Douane, Administration fédérale des douanes, Berne, January 2005, at page 1.
- See Esercizio v. Roberts, 944 F.2d 1235, 1245 (6th Cir. 1991); Rolex Watch U.S.A., Inc.112 S.Ct. 3020 (1992)cert. denied; Rolex Watch U.S.A., Inc. v. Canner, 645 F. Supp. 484, 492 (S.D. Fla. 1986); Louis Vuitton S.A. v. Lee, 875 F.2d 584 (7th Cir. 1989); Polaroid Corp. v. Polarad Elec. Corp., 287 F.2d 492 (2d. Cir. 1961), cert. denied, 368 U.S. 820.
- The Rolex Report, 4th ed.
- Montres, bijouteries, métaux précieux
- See also, Swiss Hallmarks on Gold Watchcases, NAWCC Bulletin, ISSN 1527-1609 , December 2005, vol. 47, no. 6, pp. 686-699 [14 pages].
- Richard Brown (October 2004). Richard Brown's Replica Watch Report: (COLOR). ChronoSafe Media. pp. 18–. ISBN 978-1-4116-1454-3.
- Federation of the Swiss Watch Industry FH, Definition of Swiss Made
- Swiss Anti-Counterfeiting and Piracy Platform
- Swiss Federal Department of Justice and Police: Counterfeiting and Piracy - A major problem for the Swiss Economy
- Intellectual Property Rights Fiscal Year 2011 Seizure Statistics Prepared by CBP Office of International Trade See Table 2 for a summary of US Customs seizures of watches and watch parts.