Luxury Watch & Jewelry

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Clawson, MI, SignaKey, counterfeit protection, diversion, market attacks

Luxury Watch & Jewelry

The Federation of the Swiss Watch Industry FH (FH) is the umbrella association for the Swiss watch industry, one of the most critical sectors of the Swiss economy, with exports worth 21.2 billion Swiss francs, over 3% of Swiss GDP in 2018.  The FH has close to 430 members, including over 90% of Swiss watch manufacturers.

Watchmaking accounts directly for over 57,800 jobs in Switzerland and probably as many indirectly.  Both foreign and Swiss consumers are very much alive to the values of know-how, innovation, and tradition with which the Swiss industry is imbued and symbolized by the highly coveted “Swiss Made” label.  Moreover, the Swiss manufacturing industry was generally considered one of the main drivers of growth in the Swiss economy in 2018.

Finally, most of the brands represented by the FH have a strong identity, with iconic models recognized immediately.  These are responsible for the industry’s success, which is currently a market leader.  While this reputation and success represent one side of the coin, the counterfeiting phenomenon, unfortunately, represents the other.

According to the joint EUIPO and EUROPOL “INTELLECTUAL PROPERTY CRIME THREAT ASSESSMENT, 2019, ” counterfeit and pirated products account for up to 6.8% of imports to the European Union, with a total value of 121 billion euros.  This estimate dates from 2016, with the level rising continually in recent years.

The same report highlights that luxury goods and accessories are generally among the categories of products most affected by counterfeiting and are consistently among the articles most likely to be seized by customs officials.  This high number is due mainly to the large number of small purchases ordered online and delivered by post.

Swiss watches are small, valuable, and easy to send via post.

The counterfeiting phenomenon has not spared the Swiss watchmaking industry.  The total number of Swiss watches exported in 2018, at 23.7 million, remains far below the number of counterfeit watches manufactured in China, estimated at more than 40 million.

The Swiss watchmaking sector is severely affected by this problem, as confirmed by the 2017 European customs report, which shows that watches are fifth in the list of categories of products seized at borders and that in terms of value, they are, in fact, top of the rankings.

A major Swiss watch manufacturer approached SignaKey in 2010, asking for a laser-etched mark hidden on the watch body.  They provided multiple samples of men’s and lady’s Stainless-Steel bodies for the trials.

Because this style of watch had only metallic bracelets, the first choice of location to hide a SignaKey was in the space between the bracelet attachment lugs.

The initial trial produced a 3 x 3 mm SignaKey between the lugs.  However, the results were unacceptable to the manufacturer because the SignaKey was still visible after installing the bracelet.

Further dialogue between the parties resulted in the requirement for a 1 x 1 mm (about 0.04 in) SignaKey marked in the same location.  The watch body’s shape made decoding such a small SignaKey a challenge that required a custom-fabricated camera.

After samples of the 1 x 1 mm SignaKey were provided and the bracelet was attached, the SignaKey was not visible.  The manufacturer contemplated installing a camera at every licensed jeweler around the globe and reading the SignaKey before the final fitting for the customer.

Although SignaKey had paid $2,800 for the prototype camera, at $200 each in production volumes, the price prevented the project from moving forward.

In 2020 a replacement camera, made in China, was purchased by SignaKey on Amazon for less than $25.00



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