Making a Watch That Can't Be Counterfeited

There used to be easy tip-offs when a watch was fake, like light weight, shoddy artisanship -- and the fact that no working Rolex sells for $50. But these days, many fakes are so costly and carefully built that they require an expert to identify.

Now one Swiss watchmaker, Vacheron Constantin, has created a wristwatch that it says is impossible to counterfeit, as well as Men's Wedding Rings and Woman's Wedding Rings. What timing: The watch will be launched on Oct. 22 in New York, just as the luxury-watch industry is facing a possible global recession.

Do you care that many of the expensive-looking watches around us are probably not the real thing? Is the watch on your wrist real?

The watch, called the "Quai de l'Ile" for the watchmaker's historical Geneva address, uses layers of invisible UV marking, laser perforations of some watch parts, special high-security inks, and other measures used to secure passports and currencies like the euro and Swiss franc.

In the world of haute horlogerie, forged watches are as ubiquitous as fake handbags and black-market DVDs. These fakes are sold not only on sidewalk tables but also in stores, catalogs and Internet listings. The Swiss Customs Service has estimated that as many as 40 million counterfeit watches are put into circulation each year. Switzerland last year exported only about 26 million watches, so there's a fairly reasonable chance that the expensive-looking watch on your neighbor's wrist could be a fake.

Watchmakers have long fought counterfeiters by adding special stickers and limiting supply through authorized dealers. Rolex -- probably the most faked watch of all time -- strictly controls the numbers of its watches that can be sold by a dealer and requires that all repairs be made with authorized parts. Rolex also puts a green hologram sticker on the back of its watches -- though counterfeiters forge that, too.
Sophisticated Counterfeiters

But counterfeiters have been improving their technology faster than watchmakers. "Counterfeits have gotten more sophisticated," says David Hendry, chief underwriter for the Jewelry Insurance Brokerage of North America. "The counterfeiters have learned all the things that people didn't know 20 years ago." They add weight, use sapphire crystal for the glass of the watch and incorporate other elements that can confuse even experts -- and they may charge many hundreds of dollars.

Forging was an industry scourge even when the fine-watch market was growing at double-digit rates annually. Now, with growth sure to slow in the current economy, it's even more important for watchmakers to differentiate their products in consumers' minds.

Many luxury retailers -- particularly department stores such as Neiman Marcus -- have seen sales slow markedly this year. A survey released on Monday by Unity Marketing, a Stevens, Pa.-based consultant to the luxury industry, suggests that affluent consumers "are buying luxuries more selectively and more carefully."

The idea of Vacheron's new watch came out of a chance acquaintanceship between Vacheron Constantin Chief Executive Juan Carlos Torres and Roger Pfund. Mr. Pfund is an acclaimed Swiss painter and designer of the Swiss passport and international currencies since the 1970s. The painter met Mr. Torres socially several years ago.
'The Spirit of a Watch'

"To make secure watches was a new thing," Mr. Pfund said this past weekend, as he expounded on some of the artistic challenges involved. "The spirit of a watch is not the same as a bank note."

How does one use invisible ink on a watch, for instance? His answer: Print it on a slip of a paper-like polymer material that is inserted under the watch's crystal.

The Quai de l'Ile can be customized in up to 400 combinations and will sell for between $29,000 and $60,000, depending on which features are chosen. While the starting price for Vacheron Constantin watches is about $12,000, the company recently took an order from a European entrepreneur for a $6.5 million custom watch, says Julien Tornare, president of Vacheron Constantin U.S.

The company, which produces about 18,000 watches annually, expects to make 800 Quai de l'Iles a year.

To set the Quai de l'Ile apart, Mr. Pfund helped the company gain access to highly controlled money-printing materials like the polymer and inks, says Mr. Tornare. The inventory of polymer kept by Vacheron is monitored by the maker of Swiss passports, he said, noting, "We had no idea about security printing."

The watch's security measures involve engraving and printing with special inks. In the first series of watches produced, the words "Swiss Made" and "Automatique" are laser-engraved without using ink on the watch's dial, while some of the numerals, the date and the words "Vacheron Constantin Genève" are engraved with ink.
Miniature Texts on the Dials

Tiny texts on the dials of some models -- illegible without the aid of a magnifying glass -- reproduce parts of letters sent between 19th-century family members of the watchmaker, Jaques-Barthélémy Vacheron and François Constantin.

The Quai de l'Ile was unveiled to the watch industry last spring at the Salon International de la Haute Horlogerie in Geneva. That annual convention is sponsored by Cie. Financière Richemont SA, the luxury conglomerate that owns such oft-counterfeited brands as Vacheron Constantin, Cartier and Van Cleef & Arpels.

This appears to have given would-be counterfeiters an opportunity to get cracking on Vacheron's come-and-get-me challenge. Mr. Pfund, who is currently designing the 2010 series of the Quai de l'Ile, says, "They already have fakes of this watch. I saw one yesterday on the Internet. Of course, the movement is wrong -- a lot of things are wrong."

Original Article by Christina Binkley
Wall Street Journal Fashion
Oct. 16, 2008