Hamilton vs. Vortic – Background, Update

Hamilton vs. Vortic. A five-year legal battle between the Swiss-owned formerly American Hamilton watch brand and an American company repurposing Hamilton pocket watches into wristwatches. At stake: Vortic’s survival and the survival of hundreds of American companies “upcycling” branded products. The confrontation began when . . .

Robert  “RT” Custer launched a business transforming abused or neglected top end American Railroad Era chronometers (pocket watches) into fully functional wristwatches. Precision timekeepers from once-dominant domestic manufacturers such as Waltham, Illinois, Elgin and Hamilton.

Thousands of these beautifully built watches have been literally tossed onto the scrap heap of history. Many have been disemboweled for their case metal. Mercifully, examples remain as cherished family heirlooms – non-functional pieces languishing in desk drawers and closets. Vortic’s mission: give these chronometers a new lease on life, using American labor and parts.

At the beginning of the business, Vortic ran an ad in Watch Time magazine (Exhibit A above) and posted photoshopped images of the Hamilton-based Lancaster on their homepage (below).

Vortic made a crucial error: the photoshopped image placed the crown on the side of the Lancaster’s case. This helped open the door to Hamilton’s claim that the Lancaster led to potential “confusion” between Vortic’s upcycled product and a Hamilton wristwatch. Hamilton branding also drew the attention of Hamilton’s Swiss masters.

For actual production, Vortic moved the crown to the “pocket watch” position at the top of their wristwatches. It made no difference. On July 10, 2015, Hamilton’s lawyers issued a cease and desist letter to Vortic, ordering the Fort Collins-based operation to stop using the name Hamilton on their watches and promotional material and destroy any remaining product.

RT opened direct discussions with Hamilton, reassuring representatives of the SWATCH subsidiary that Vortic’s “one-of-a-kind” conversions posed no threat to their business. He appealed to the Swiss watchmaker’s sense of history and tradition. He argued that Vortic’s products helped preserve Hamilton’s storied past, adding value to the brand.

No dice. Hamilton told RT to do the lawyer thing.

In July, 2017, the Swiss watchmaker filed Hamilton vs. Vortic in the Southern Federal District Court of New York. Hamilton alleging trademark infringement, seeking attorney’s fees and damages. At that point, Vortic had stopped selling pre-built Hamilton-branded watches, although they continued converting customers’ Hamilton pocket watches.

The legal wrangling began, Judge Alison Nathan presiding. I’m not a lawyer, but reading through some of her rulings it seems clear that Hamilton’s case sits on rocky ground.

Hamilton had to establish consumer confusion between their watches and Vortics’. Normally, that’s done via a consumer survey and expert testimony. Hamilton did neither. Instead, they produced an email from a single customer asking if Hamilton sold the watch featured in the Vortic ad – an email that was disallowed as hearsay. Dismissing a request for summary judgement, Judge Nathan wrote:

The purchasing consumer would see Vortic’s Hamilton watch in the context of Vortic’s name, logo and explanations of how the watches are made, greatly minimizing the likelihood of confusion. Moreover, even the U.S. Trademark Office did not initially find the mark was distinctive . . .

The Vortic name predominates the advertisement and the explanation contained in the advertisement reflects that the alleged Accused Vortic Watches use “railroad era, American made pocket watch movements” to create a “one-of-a-kind wristwatch,” it cannot be said that the Hamilton name is confused with a modern-day Hamilton watch. Instead it is representative of a restored antique movement in a Vortic Watch . . .

Vortic’s intent was not to trade off the goodwill of the Hamilton trademark or to compete with Hamilton’s sales of its watches. Rather the intent was to provide its customers with a vintage Hamilton pocket watch restored as a wrist watch. These antique pocket watches are no longer sold or repaired by Plaintiff, so the products are not competitive.

In January 2020, Judge Nathan refused to reconsider her dismissal of the summary judgement, torpedoing Hamilton’s argument that Vortic watches could be confused by a “reasonable fact finder.”

In short, a reasonable factfinder could conclude that the vast majority of ordinarily prudent purchasers would interpret the ads as communicating that Vortic’ s only connection to Hamilton is that it uses and restores antique Hamilton watch movements for its product.

The reasonable factfinder could also conclude that the vast majority of ordinarily prudent purchaser would expect the kind of modifications used by Vortic in a historic, restored watch.

On February 19, 2020, the case went to trial for oral arguments. Surprisingly, the SWATCH Group didn’t send a high-level exec, relying instead on a U.S. executive. Just four hours later it was over. The judge’s final ruling is expected within the next two months.

Given prior rulings in Hamilton  vs. Vortic, Vortic’s lawyer Robert Lantz (above) of Castle Lantz Maracle and Murray is optimistic that Judge Nathan will rule in his client’s favor. If she doesn’t, Vortic’s other “donor” watches could follow suit – Waltham, Illinois and Elgin are all still in business. Mr. Lantz is passionate in Vortic’s defense, and reckons the case has wider implications.

If we win, we will continue using the Hamilton brand name with full disclosure and knowledge to customer. American Railroad watches were the Rolex of their day. They saved hundreds if not thousands of lives by making trains run on track, on time. They changed the entire way we travel.  

But this is really a centerpiece going forward for anyone upcycling products – like car restorations and electric conversions. On an environmental and societal level, do you want these products in a landfill? Do you want important pieces of American history just melted down?

The Truth About Watches will report the final ruling in Hamilton vs. Vortic when it’s handed down.

[Click here for more background on the case.]