«I’m afraid you are going to have to strike „red gold“ from that verse».

“What are you talking about – that would kill my trochaic tetrameter!! … and in the name of what would you stop my using Red Gold?”

“IT’S MY TRADEMARK”
Ha Ha Ha Haaaaah (cinematographic diabolical laugh)

“Are you kidding me? Red gold is an alloy of gold and copper – it’s always been referenced as such in all the norms and everyone uses it to describe the metal of their watches – your mark is generic so it’s null and void”

“Well so say you … but you’re gonna have to prove it … and since it’s now incontestable, good luck with that!”

“Well sue me!”

“Oh you can be sure I will – just as soon as I have finished with the rest of the watch industry”

This is in essence the conversation that took place more than 10 years ago between the greatest names of the watch industry (including Richemont’s) and a certain Chris Aire CEO of Solid21 and owner of the US mark RED GOLD.

Mr. Aire had a plan (and his lawyer was clearly on a contingency fee): he simultaneously sued Hublot, Richemont and Breitling. He then decided to take things in steps:

1. Focus on Hublot who perhaps of all the brands made a more prominent use of the term red gold than the other .
2. Sign “tolling agreements” with the others.
3. Use the money from the first case to fund the second and so on.

As the Hublot case dragged on, the Richemont brands decided that it would be safer to stop any use of the term “red gold” and to opt for the alternative rose or pink. IWC naturally refused: Pink is for girls (at the time, IWC was exclusively “engineered for men”). Their compromise was to use the code 5N which corresponds to the red gold alloy in the Norms.

After some years and exchange of briefs, Hublot settled – the legal fees were getting out of hand.

And so Mr. Aire turned to Breitling and to Richemont. It was our turn to defend the case.

Two lines of defence:

(i) The trademark was generic and non-distinctive and should be cancelled … but we knew it was a stretch owing to this status of incontestable trademark which comes after 5 years of non-challenged registration.
(ii) The use made of the term red gold was fair and entirely descriptive of the copper and gold alloy.

Simple.

But US proceedings are endless. Motions no end, experts and reports, change of lawyers for Mr. Aire (many) and even change of judge . We finally came to the question of how damages might be calculated and what products we should consider as subject to the US trademark protection (ie: commercialised on US soil)?

With the work of the finance team, managed to cut our risk of damages drastically. So much so that even if he won, the damages would not been enough to cover his legal fees – let alone pay for the next litigation. He changed lawyers again … three times. Exasperated, the court dismissed the case. Not a dime was paid to Mr. Aire.

In the meantime, the Breitling case was going to trial… and Breitling was ready for the kill. Breitling – contrary to Richemont – had stuck to its guns and never stopped using the term red gold: a question of principle that came at a cost … but a question of principle nevertheless. This also meant that the stakes were high – the quantity of sales based on which damages might be calculated was very high….

Finally, on 27th March 2024, the decision from the 2nd circuit court of Connecticut fell in favour of Breitling (Solid 21 Inc v. Breitling U.S.A. Inc, 2nd U.S. Circuit Court of Appeals, No. 22-366.):

« Breitling uses the term ‘red gold’ in a descriptive sense, which watchmakers had started doing long before Solid 21 purportedly began using the term as a mark, » Senior U.S. Circuit Judge Richard Wesley wrote for the majority.

« Solid 21 trademarked the name of a color — red — coupled with the name of a metal: gold, » Wesley said. « It cannot now deprive commercial speakers, like Breitling, of the ordinary utility of descriptive words by requiring the use of synonyms or alternatives. »

The majority also determined that Breitling used « red gold » in good faith”.

Hats off to Breitling for having fought this to the end ….!

But the time and money it takes to defend a perfectly reasonable and obviously descriptive term does not reconcile me with the US justice system. Civil proceedings are not perfect but this case would never have happened in Europe. For one thing, the mark would never have been registered in the first place (lack of distinctiveness); secondly, the notion of incontestable TM does not exist such that a cancellation action would have been the natural route. And if by extraordinary bad luck the trademark were considered valid, the use would undoubtedly have been considered a generic use.

Beyond the story of the troll (this is the name given to those who would file trademarks only to blackmail companies with deep pockets) and my preference for civil law proceedings, what are the learnings for an inhouse counsel?

1. Always be nice to your finance team – you never know when you are going to need them and when you do, they can make all the difference.

2. When you litigate in the US, costs will run inordinately high. You need to keep the business involved and interested (10 years is a long time and you will need to convince new CEOs of the importance of the case). If you don’t, they ask you to settle and get rid of the case.

3. When it’s a matter of principle, fight to go to the end – cutting losses isn’t always the right way to go.

In the luxury field, you are often the plaintiff, but nothing feels better for a lawyer than having defended your company.

A lawyer knows that all wins are not equal – context, objective, results all matter in determining the quality of the victory. I never adhered to the idea that winning is what matters – what matters at the end of the day is HOW you win .. and sometimes even how you have failed…

but winning is nice nevertheless!

PS: A word of warning: The trademark RED GOLD is still valid in the US and nothing is to say Mr. Aire won’t try to pressure other actors of the watch industry by threatening to take the matter to Court. The question of fair or descriptive use is a matter of fact and context. The choices of ROSE, PINK or N5 will keep you out of trouble.