Samsung Must Pay Swatch Group US$11.6 Million Over 'Knock-Off' Smartwatch Faces, London High Court Rules

Samsung has been ordered to pay Swatch Group $11.6 million after a UK court found it infringed trademarks by hosting third-party smartwatch face apps that copied luxury watch designs from Omega, Longines, Tissot, Breguet and Blancpain.

A London High Court has ordered Samsung Electronics to pay Swatch Group $11.6 million in damages for trademark infringement, ruling that the tech giant unlawfully hosted digital watch faces that copied designs from some of the world's most prestigious luxury watch brands. The case centered on third-party applications available through Samsung's Galaxy App Store between October 2015 and February 2019. These apps offered smartwatch faces mimicking designs from Swatch-owned brands including Omega, Longines, Tissot, Breguet and Blancpain. The apps were downloaded approximately 160,000 times in the UK and European Union during that period.

The Court's Reasoning

Judge Marcus Smith awarded the damages after finding that Samsung's display of Swatch brands on its app store caused significant harm to the watchmaker's property interests, comparing the situation to a physical supermarket displaying counterfeit goods on its shelves. “The use of the Swatch Group brands on Samsung's supermarket shelves, downloadable for nothing or for little money, is to my mind very damaging,” the judge ruled. “The low price is demeaning of the brands the Swatch Group seek to promulgate.”  Of the total $11.6 million award, approximately $10 million was specifically for "store display infringements" the harm caused by Samsung simply displaying the brand names on its app store, regardless of whether consumers actually downloaded the apps.

Samsung's Defense

Samsung had argued during the proceedings that Swatch suffered no actual harm and that the company earned only about $300 from the apps. The company maintained that the apps were developed by third parties and were removed as soon as the issue was raised. However, the court previously found in 2022 that Samsung was liable for trademark infringement because it controlled the app review and distribution process. Samsung lost a subsequent appeal in 2023.

Swatch's Response

Swatch, which had initially sought approximately $170 million in damages, welcomed the decision. The company said Samsung "repeatedly attempted to downplay the scale and significance of the infringement by trivializing the compensation owed to the Swatch Group's well-known brands."  Swatch noted that related proceedings against Samsung have also been filed in the United States, though they have been stayed pending the outcome of the UK case.

What's Next

Samsung said in a statement that it is "carefully considering the High Court's judgment and will consider all possible countermeasures, including an appeal."  The case is being closely watched by intellectual property practitioners and brand owners, as it highlights the growing importance of brand value in the assessment of intellectual property damages and the liability of app store operators for third-party content.

Here is the question this ruling raises. When a technology company's app store hosts third-party content that copies luxury brand designs, and the court finds that the mere display of those brands is damaging regardless of downloads, what does it mean for the liability of app store operators and the value of brand reputation in the digital marketplace?

FAQ:

Q: Why did the UK court order Samsung to pay Swatch Group $11.6 million?
A: The court ruled that Samsung infringed Swatch's trademarks by hosting third-party smartwatch face apps on its Galaxy App Store that copied designs from Swatch-owned luxury brands including Omega, Longines, Tissot, Breguet and Blancpain.

Q: How much did Swatch initially seek in damages from Samsung?
A: Swatch initially sought approximately $170 million in damages, significantly higher than the final $11.6 million awarded.

Q: Were the watch face apps created by Samsung?
A: No, the watch face apps were developed by third-party developers. Samsung was found liable because it controlled the app review and distribution process.

Q: How many times was the Swatch-inspired watch face apps downloaded?
A: The apps were downloaded about 160,000 times in the UK and European Union between 2015 and 2019.

Q: What was Samsung's defense in the case?
A: Samsung argued that Swatch suffered no actual harm and that Samsung earned only about $300 from the apps. It also noted that the apps were removed once the issue was raised.

Q: Can Samsung appeal the court's decision?
A: Yes, Samsung has stated it is considering all possible countermeasures, including an appeal against the High Court's judgment.