Ethical Complications in the Watch Industry

It's July 14, 2017 and I'm standing on a sidewalk outside of the Cipriani ballroom on 42nd Street in New York City. The rain is pouring down. Fortunately, I arrived early enough that I have a spot under a temporary awning set up by Patek Phillipe as part of their Grand Exhibition. I snap a photo of the entrance as I wait.

Thierre Stern outside the 2017 Grand Exhibition in NYC

Three years later, as I write this piece, I'm realizing that I captured a shot of CEO Thierry Stern taking a smoke break before the exhibition opens in ten minutes.

I vaguely recognize a kid waiting in line in the group ahead of me. I can't place him, but I feel like I've seen him on YouTube or maybe heard about him on a podcast. He's a budding expert on watch collecting.

Wristie of my Steinhart OVM en route to the Grand Exhibition

He turns around and his eyes get big after he takes a look at my wrist. "Is that a ....?!" I stop him before he can build momentum. "No, no it's not," I reply. And he says, "oh, ok" and moves on.

I'm wearing one of my favorite pieces in my collection. It is a Steinhart Ocean Vintage Military (OVM). It is an homage to the legendary Rolex MilSub, a series of references created in exceedingly limited supply for a few militaries around the world. The kid clearly thought I was wearing the real deal. I felt a twinge of guilt that I'd let him down.

When my wife asked, I'd included the OVM on a list of things I'd like for my birthday and she'd surprised me with it.

A more recent picture of my Steinhart OVM

I'd carefully researched this watch. Owners loved it and it has an ETA movement with a solid reputation. Through my research I became familiar with the controversy over homage pieces. Many collectors look down upon these references, seeing them as "fake," or somehow lesser. One reviewer remarked, though, that it is nearly impossible for the average collector to obtain a MilSub. At that time, Menta was listing a MilSub for $180,000 and examples appear on the market rarely. If I had put an actual MilSub on my birthday wish list, my wife would have laughed and I would have ended up with 7 more pairs of socks instead of a timepiece. Why not scratch the MilSub itch with an homage, under those circumstances?

The Steinhart OVM is honest, in a way. The dial markings make it clear that it is not a Rolex. Nevertheless, whenever I post a photo of it to Instagram I wince a little, worrying I might get some blowback for posting a "fake" or for having "inauthentic" watches in my collection. I've spent a bit of time thinking about this subject more generally. Why do collectors seem to dismiss timepieces which are similar to earlier references? There seems to be an implicit notion that certain designs sold by certain brands are morally superior to others. Is this correct?

Here, I'll suggest that judging certain timepieces as morally inferior is not only incorrect, it might actually be indefensible. I'll also suggest that replica timepieces, which illegally infringe upon the trademark of brands, may be ethically sound. I know this will be extremely controversial, but let me explain.

My thoughts on this subject were prompted by an article published in the SMU Law Review in 2008 by Lisa Ramsey entitled "Increasing First Amendment Scrutiny of Trademark Law."

Screen grab of Dr. Ramsey's paper

Ms. Ramsey points out that there is a conflict between trademark and free speech. My admittedly simplistic interpretation of her argument is that trademark grants a monopoly over certain words or phrases to a person or organization. Of course, due to trademark it is not possible to exercise free speech completely because the trademark monopolist will "punish" you if you use their "property," (ie words) without permission and / or payment. Ms. Ramsey mentions that this can lead to self-censorship by those without the resources to defend themselves, which also implies that the first amendment is not equally applied. After discovering this analysis, I began to think about whether there were other ethically defensible reasons to oppose trademark or, at least, tolerate trademark infringement. I believe the answer is yes, particularly in regard to antiracism.

My thinking on antiracism is heavily influenced by the work of Ibrahm Kendi. I learned two important principles through reading his book How to be Antiracist. The first is that there are only two policies in the world: racist policies and antiracist policies. There is no racism-neutral policy. The second important lesson I learned from Dr. Kendi is that anything which reduces inequalities associated with race is antiracist. A policy which leaves inequality intact, or makes it worse, is racist.

It would be natural to wonder how this, in any way, pertains to luxury watches. In other writing, I've observed that luxury products are, among other things, positional goods. They can serve as a signal of status or accomplishment. This signal is so important it can open doors of opportunity. A 2016 article in Providence Journal even suggests that fashion choices can determine whether or not a job applicant is hired in investment banking.

The racial wealth gap in America is well-documented.

A graph of trends in the racial wealth gap from a report by Citibank.

It is a persistent product of centuries of discrimination including, but not limited to, the unpaid labor of slaves, redlining, segregation, and ongoing discrimination. Due to the racial wealth gap, luxury watches are less accessible to racialized individuals. This implies that it is easier for those considered white to enjoy the signaling benefits from ownership of a luxury watch. The resulting enhancement of opportunity and / or networking for those considered white further reinforces inequality.

Trademark, and trademark enforcement, is one of the practices which underpins the inaccessibility of luxury watches. The production of replica watches by trademark "infringers," at far more accessible prices, provides greater access to a potentially important status signal.

Counterfeit watches seized by US Customs and Border Patrol.

Thus, trademark, as applied to luxury watches, reinforces inequality. According to Kendi's tenets, this outcome is racist. Trademark infringement and replicas can increase opportunity through greater access to the status signal offered by a luxury watch. Through this lense, a policy of permitting trademark infringement is antiracist.

Let's also acknowledge the limitations of this reasoning. Rampant trademark infringement would fatally compromise the reputation of any brand, thereby eliminating its potential as a status symbol. This is a valid counterpoint which suggests that trademark infringement can not be permanently, or globally, antiracist. There are undoubtedly a large number of alternative mechanisms by which trademark is left intact, but the status benefits from luxury watches are rendered more accessible, thereby countering racial inequality.

More generally, the ethical dimension of luxury markets is multifaceted with tremendous potential to advance society in positive directions. The emergence of sustainable manufacturing practices, such as upcycling and environmentally sound sourcing of materials, is one of many indicators that the watch industry already appreciates this potential. There is every reason to believe that the significant creative skills of brands and independent manufacturers can initiate additional innovation in furtherance of social progress.