Why did Samsung have to pay 11.6 million US dollars in compensation for the watch faces made by a third party?
Why did Samsung end up bearing $11.6 million in compensation for watch faces made by third-party developers and sold in Samsung's app store?
On August 26, the High Court of London issued a damages ruling in the Swatch Group v Samsung trademark infringement case. According to media reports, Judge Marcus Smith ordered Samsung to pay approximately $11.6 million to the Swatch Group, involving counterfeit digital watch faces of brands including Breguet, Blancpain, Omega, Longines, Tissot and others.
The Swatch Group originally filed a compensation claim of about $170 million, while Samsung's expert argued that the compensation amount should only be around $301. The final ruling did not accept the extreme calculation of either party, but set the compensation amount at around $11.6 million.
However, the most noteworthy part of this case is that the UK court clearly answered a more important question:
When the platform not only stores third-party content, but also participates in review, display, distribution and commercial promotion, the trademark infringement committed by a third party may also constitute the platform's own infringement.
I. The infringement was not just newly determined
This lawsuit began in 2019, with the case name Montres Breguet S.A. and others v Samsung Electronics Co Ltd, and the case number IL-2019-000011.
The Swatch Group claimed that between October 2015 and February 2019, 30 digital watch face apps provided on the Samsung Galaxy App Store infringed 23 trademarks under the Group. These watch faces were produced by third-party developers, but could be directly installed on Samsung smartwatches, with a total of about 160,000 downloads in the UK and the EU.
On May 20, 2022, the High Court of England and Wales issued a liability judgment, finding that Samsung constituted trademark infringement for many of the involved watch faces, with the neutral citation of the judgment being 2022 EWHC 1127 (Ch).
Samsung subsequently filed an appeal, arguing that the involved watch faces were uploaded by third-party developers, and the Galaxy App Store only provided technical storage and distribution services, so it should not be regarded as the actual user of the trademarks.
On December 15, 2023, the Court of Appeal of England and Wales dismissed Samsung's appeal and upheld the infringement conclusion, with the neutral citation of the judgment being 2023 EWCA Civ 1478.
Therefore, the announcement on August 26, 2026 is not the first judgment on "whether infringement is constituted", but a subsequent ruling by the court on the specific amount of damages after the tort liability has been determined.
II. Who is deemed to use the trademark when the watch face is put on the app store?
Samsung's defense is not difficult to understand.
The involved watch faces were not designed by Samsung, and the logos such as "OMEGA", "LONGINES" and "TISSOT" on the watch faces were not added by Samsung either. Samsung only provides the app store, where third-party developers upload content, and consumers download and install it on their own.
Following this logic, the actual users of the relevant trademarks are the watch face developers, and Samsung is only a technical platform connecting developers and consumers.
However, the court did not only look at "who drew this watch face", but at how the entire watch face entered Samsung's commercial system.
Samsung provides watch face creation tools for developers, allowing them to develop applications for Samsung devices; after the watch faces are uploaded, they need to pass Samsung's function and content review, and can only enter the Galaxy App Store after being approved. Samsung decides whether an application can be launched, how it is classified, and how it is displayed to consumers, and has also recommended and promoted some watch faces.
More importantly, Samsung has always taken rich digital watch faces as a selling point of its smartwatches, emphasizing that its watches have the appearance and experience close to traditional mechanical watches. What consumers purchase is not an isolated watch face file, but the product experience jointly constituted by Samsung's hardware, operating system and app store.
Therefore, although Samsung did not personally produce the infringing watch faces, it actually organized and controlled the whole process of watch faces from development, review to launch, display and download, and obtained commercial benefits from the sales of smartwatches.
The fact that a third party is responsible for the design does not mean that the platform has no use of the trademark.
The legal judgment is not about who originally produced the infringing content, but who put it into its own commercial chain.
III. Why is Samsung not a "passive custodian"?
Samsung once tried to invoke the hosting exemption rule stipulated in Article 14 of the EU E-Commerce Directive.
This rule mainly protects platforms that only carry out technical, automated and passive storage of third-party information. If the platform has no actual knowledge and control over the information, and deletes it in time after receiving a valid notice, it can usually obtain a certain degree of liability exemption.
The problem is that Samsung's conduct in this case is not considered by the court to be purely passive.
Samsung conducts content and function review before apps are launched, and has the right to approve or reject applications; it formulates app store rules, controls the display and distribution methods of applications, and encourages more watch faces to enter its own ecosystem through development tools, developer activities and market promotion.
The Court of Appeal held that Samsung's use of the disputed logos was active, and its conduct gave Samsung knowledge and control over the relevant content, which was no longer a "technical, automated and passive" hosting service, so it could not invoke the hosting exemption.
A misunderstanding needs to be avoided here: this case does not encourage platforms to "not review", nor does it mean that the more reviews the platform conducts, the heavier the legal liability will be.
What the court really focuses on is what role the platform plays in the whole transaction and communication process. The risk review purely carried out to fulfill compliance obligations is not the same as the platform's initiative to design the product ecosystem, control content launch, conduct commercial promotion and obtain benefits from it.
The platform's liability does not depend on whether it calls itself a "technical service provider" or a "neutral platform" in the agreement, but on what it actually does.
IV. Consumers may assume that this is a brand cooperation
There is another important difference between digital watch faces and ordinary pictures: they will eventually appear in the most prominent position on the watch surface.
A consumer who sees a watch face with the logo of Omega, Longines or Tissot in Samsung's official app store and installs it on a Samsung smartwatch is very likely to believe that these watch faces are authorized by the corresponding brands, or that there is a cooperative relationship between Samsung and the traditional watch brands.
This perception is not without practical basis. Co-branded smartwatches jointly launched by technology companies and luxury brands have long been a real business model in the market.
Therefore, even if consumers know that they are buying a Samsung smartwatch, they may still mistakenly believe that the watch face is licensed by the Swatch Group.
The confusion prevented by trademark law does not only refer to mistaking Samsung for Omega, but also includes consumers mistakenly believing that there is authorization, co-branding, sponsorship or other commercial connection between the two parties.
When a logo is placed on a traditional watch and on a digital watch face, although their carriers are different, the brand identification effect they play can be very similar.
Digitalization does not eliminate trademark use, it only changes the position where the trademark appears.
V. No download may also cause brand damage
The most noteworthy part of this damages ruling is that the court does not seem to limit the damage entirely to the 160,000 actual downloads.
According to media reports, about $10 million of the compensation is related to the damage caused by Samsung's display of the Swatch Group's trademarks in the Galaxy App Store. The judge held that displaying luxury watch brands in the form of digital watch faces for free or at a very low price in Samsung's app store will damage the value of these brands.
This means that even if an infringing watch face is not actually downloaded by a certain consumer, as long as it has been placed on the page of the app store and displayed to the public in the form of goods, it may affect the scarcity of trademarks, the authorization order and the brand image.
For brands such as Breguet, Blancpain and Omega, the trademark value not only comes from whether consumers buy a watch, but also from the brand's long-term control over usage scenarios, cooperation partners, authorization prices and market image.
If any developer can turn these trademarks into free watch faces, and the platform treats them as "shelf goods" that enrich its own product ecosystem, consumers may gradually believe that these brand logos can be copied and used at will.
What the court protects is not only the license revenue that may be replaced by a single download, but also the value loss after the brand loses control.
Of course, before the full judgment is made public, it is not appropriate to draw an overly definite conclusion on the legal nature corresponding to the about $10 million compensation, the calculation basis, and how the court distinguishes display damage, download damage and license loss.
But the case has sent a clear signal:
Digital goods have no physical inventory, but the app store is still a row of commercial shelves. Placing infringing logos on the shelves may itself be a kind of commercial use.
VI. Why does the platform still need to pay compensation after deleting the infringing content?
After discovering the relevant watch faces, the Swatch Group sent a notice to Samsung in December 2018. Samsung then deleted the complained applications.
However, timely deletion can only prevent the damage from continuing to expand, and cannot eliminate the trademark use that has already occurred before the deletion.
From 2015 to 2019, the involved watch faces have been continuously displayed and distributed in the Galaxy App Store, with a total of about 160,000 downloads. Samsung's smartwatches have also gained product attractiveness from the rich watch face ecosystem.
If the platform can be exempted from all historical liabilities by deleting content after receiving a notice, the "notice-takedown" mechanism may change from a risk control mechanism to a tool for the platform to use third-party rights at no cost: continue to profit if no one complains, and delete the content after someone complains.
The hosting exemption system protects neutral information services, and does not grant the platform a free chance of infringement.
Whether the content is deleted in time affects the liability after the notice; whether the platform has actively participated in the commercial use of the infringing logo before receiving the notice is another issue.
VII. This case is not far from Chinese platforms
The UK judgment cannot be directly applied to Chinese cases, but the problems it raises also exist in domestic app stores, e-commerce platforms, font platforms, material platforms, AI application markets and digital content trading platforms.
Platforms often claim that the goods are uploaded by merchants, the pictures are posted by users, the templates are made by designers, the AI agents are built by developers, and they only provide technical services.
However, if the platform also decides whether content can be launched, uniformly generates product pages, sets search keywords and recommendation tags, participates in pricing and revenue sharing, actively carries out promotion, and attracts users to purchase its own hardware, membership or traffic services by the quantity and quality of content, it is difficult to always regard itself as a completely neutral "information pipeline".
Especially in the era of generative AI, the degree of platform intervention may be deeper.
In the future AI app stores, third-party developers may upload agents that imitate well-known figures, brand images, film and television characters, music styles and professional databases. If the platform conducts review, classification, recommendation and commercialization, but only defends by saying "the model is not trained by me" and "the content is not generated by me" after infringement occurs, it may not be sufficient to cut off the liability.
The boundary of platform liability will not only be determined by who uploaded the content, but also shaped by control capability, commercial interests and actual participation degree.
Zhichanli's Judgment
The Samsung watch face case appears to be a conflict between traditional watch brands and smartwatches on the surface, but in essence it draws the liability boundary for digital platforms participating in third-party infringement.
Third-party developers made the watch faces, but Samsung provided development tools, reviewed applications, controlled launch, organized display, and used the rich watch face ecosystem to sell its own smartwatches. To this extent, the platform is no longer just providing servers outside the transaction, but has entered the process of trademark use and value realization.
The platform can allow third parties to produce content, but it cannot leave all intellectual property risks to third parties while enjoying the commercial benefits brought by the content.
When the platform controls the shelves, reviews the goods, operates the traffic and obtains commercial benefits, the infringement on the shelves can hardly always be only the merchant's liability.
This article is from the WeChat official account "Zhichanli" (ID: zhichanli), the author is Mao Liguo/MCP, and 36Kr is published with authorization.