Even when arguing, collectors can agree on one thing: We all want what’s best for the future of the watch industry.
The way we as collectors refer to watch companies has always been a bit different. The best companies aren’t actually “companies” to us, but “brands.” This terminology has the effect of placing these brands one degree of separation away from what we know to be a modern company’s sole motivation: maximizing shareholder profit. Sure, we recognize profit maximization to be among a brand’s chief concerns too, but there are also other considerations at play: developing a design aesthetic, staying true to the brand’s historical position, and building the perception of the brand for the future. While enthusiasts aren’t direct stakeholders in a company’s profit maximization function, they might be in a brand’s more holistic decision-making process that also considers how to affect the brand’s perception. For example, brands may make decisions to cater to or win over enthusiasts that might not have an immediate positive effect on the bottom line.
Brands and IP: Promoting progress
This brand building is facilitated by legal protections granted to intellectual property (IP). Watch brands typically rely on two flavors of IP to build protections around their businesses: patents and trademarks. A patent protects a novel invention, while a trademark is a logo or name that helps consumers identify the source of a product.
Laws are nothing more than incentive structures, designed to achieve underlying principles. While IP laws in the U.S. can seem complex or obtuse, it’s important to understand the incentive structures they put in place and the underlying principles these structures are designed to work toward. Lucky for us, the Constitution itself lays out the fundamental principle that justifies the protection of IP rights:
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
At their foundation, IP rights are meant to incentivize inventors, creators, or entrepreneurs to contribute to the progress of science and the arts.
Promoting this progress is a push and pull between the past and the future. On the one hand, laws must protect IP that companies have heavily invested time and resources into developing to ensure these companies see a return on this investment. This promised protection ensures that companies are incentivized to invest in science and the arts in the first place.
On the other hand, this protection cannot be so restrictive that future inventors or creators are not encouraged to build and improve upon what already exists so as to further the development of the industry as a whole. There’s “nothing new under the sun,” and discoveries are made by “standing on the shoulders of giants,” to use two popularized sayings that reflect this common understanding. To best promote progress then, IP laws must strike a balance between protecting existing IP and promoting the development of future IP.
Collectors supporting creators
Collectors have always had an intuitive understand of striking this balance, and of the underlying principle of promoting the progress of the watch industry. While legal battles over IP are often framed as “David vs. Goliath” clashes in which an established, centuries-old brand (think Rolex or one of Swatch Group’s stable of brands) takes up against a young upstart, this misses the point. Take, for example, the current case of Hamilton v. Vortic. Hamilton is suing Vortic, an American startup that takes old pocket watch movements from historic American manufacturers like Elgin, Illinois, and Hamilton and re-cases them in custom-built wristwatch cases. Hamilton — a Swatch Group subsidiary — is suing Vortic for its use of the Hamilton name on Vortic’s products and advertisements.
There are strong opinions on both sides of the case, and while the balance of enthusiast support likely lies with Vortic, there is by no means a lack of support for Hamilton. While it’s easy to assume that support lies largely with Vortic because everyone loves the scrappy upstart, that’s not the underlying factor for most. Principled collectors are concerned not with any one brand, but with progressing the industry and the community as a whole.
Most support for Vortic and founder RT Custer instead comes from a foundational understanding that creators or inventors should be allowed to do things that — as the Constitution itself puts it — “promote the progress” of the watch industry. Often, this means allowing young upstarts like Vortic the freedom to leverage the IP of companies that came before it to build new products (operating in what some might view as a legal “grey area”). If an existing company isn’t meeting a market demand, another company ought to be able to step in and meet that demand, or so the argument goes.
Meanwhile, most support for Hamilton on the other side is phrased in the same terms of moving the industry forward, albeit arriving at the opposite conclusion. Arguments supporting Hamilton look instead to the investments Hamilton has made and continues to make in protecting and maintaining its brand, and contend that companies like Vortic are “free riding” on the goodwill Hamilton has developed in the market.
To take the every-present debate about “homage” watches as another example. The primary underlying critique of certain homage watches is that they do nothing to push the industry forward, instead leveraging the IP other brands have heavily invested in to make a few bucks. While enthusiasts may differ on where they draw the line between a blatant “ripoff” and what they consider a forthright homage, they’re usually expressing the same underlying principle concerned with moving the industry forward.
While enthusiasts may argue opposing sides in any specific case, these arguments are grounded in the same underlying principle — the same principle of promoting progress that IP protection is ultimately designed to incentivize.
Brand or company?
We feel emotional, often social connections with watch brands. We value them for the feelings their products elicit from us, or the associations they have to important events in our lives. We value them for the connections they help us make: to other collectors, sometimes to the founders or creators themselves. Arguments about what’s best for the future of the watch industry become hostile because of the emotions that we’ve allowed to become intertwined with these products.
To us, these aren’t just profit-maximizing companies, but brands. Part of this is surely self-delusion, believing that a brand would ever concern itself with the opinions of a few collectors. But part of it’s also real. We become frustrated with watch brands when we feel as though they’ve begun to act like profit-maximizing companies simply operating in the milieu of late-stage capitalism and not responding to the emotion and passion that we as enthusiasts associate with these brands.
While it might seem that those arguing either side of a particular case are diametrically opposed, both sides are committed to the same underlying principle: promoting the progress of the entire watch industry. We can only hope that judges and lawmakers craft laws that best achieve this underlying principle too.