Swatch v. Samsung Trademark Infringement Case: UK Judge Pioneers "Risk Insurance" Licence Fee Model, Awards $11.6 Million

On August 26, 2026, the High Court of Justice in England and Wales delivered its damages judgment in the trademark infringement case brought by Swatch Group against Samsung Electronics, ordering Samsung to pay $11.6 million in "negotiating damages." This amount is substantially lower than the plaintiffs' claimed $170 million, and significantly higher than the defendants' insisted-upon $301.

The case arose from activities between 2015 and 2019, during which Samsung, through its Galaxy App Store, permitted third-party developers to upload and offer for download a large number of smartwatch watch-face applications. Some of these watch faces, without authorisation, reproduced the classic dial designs of ten Swatch Group brands—including Breguet, Blancpain, Omega, Longines, Tissot, and Swatch itself. The total number of downloads was approximately 160,000, but the direct revenue generated was only about $1,000. As early as 2022, Mrs Justice Falk had already found Samsung liable for trademark infringement at the liability stage, and that decision was upheld by the Court of Appeal in 2023. The present hearing was confined solely to the quantum of damages.

Regarding the core finding of infringement, the court held that Samsung was not merely a "platform provider" but had deeply intervened in the chain of infringement. Samsung had specifically developed the Galaxy Store (SGA) for smartwatches and actively provided third-party developers with tools such as "Galaxy Watch Studio" to encourage them to create watch-face applications. All applications were subject to Samsung's content review before listing, and once listed, they were displayed alongside Samsung's own watch faces, with users unable to distinguish third-party from official products.

More importantly, Samsung marketed "a rich selection of watch faces" as a key selling point for its smartwatches. The infringing watch faces, precisely because they exploited the high reputation of Swatch's brands in the horology field, allowed consumers to see on their smartwatches dial designs nearly identical to those of high-end mechanical watches. The court determined that even though the infringing watch faces were developed by third parties, Samsung, through its acts of reviewing, listing, displaying, sharing revenue, and providing after-sales support, had engaged in "use" within the meaning of trademark law. Moreover, such use occurred in the course of trade and for the purpose of enhancing the appeal of its own products. Samsung was therefore held directly liable for infringement, rather than merely acting as an intermediary under a "safe harbour" defence.

At the damages stage, Swatch Group's expert witness adopted a "negotiating damages" model, hypothesising a hypothetical licensing negotiation between the parties prior to the infringement. The expert contended that Samsung should pay approximately $170 million for a joint-branding licence. The basis for this claim was that Swatch's brands are extremely valuable and are never licensed to third parties. For Samsung to lawfully use those trademarks, it would have had to accept a comprehensive co-branding arrangement covering both hardware and software, including branding on the watch case, crown, strap, charger, and packaging—akin to the Apple-Hermès cross-sector collaboration.

Samsung's expert witness, by contrast, wholly rejected such a high valuation. He argued that the damages should be limited to Samsung's actual economic gain, namely the approximately $301 in revenue share from paid downloads, and further contended that the infringement had caused no quantifiable actual harm to the Swatch brands, as no decline in Swatch watch sales had been observed, nor had any identifiable negative change in brand reputation been detected in consumer surveys.

Confronted with these polarised positions, the presiding judge, Mr Justice Marcus Smith, expressly rejected both calculation methods as unacceptable. As to Samsung's $301 claim, the judge noted that the essence of negotiating damages is to compensate the right holder for the loss of control over its own property rights, rather than merely to calculate the infringer's realised profits. Although Samsung's direct revenue was minimal, by offering a rich ecosystem that included infringing watch faces, it had significantly enhanced the user experience and product appeal of its smartwatches—an indirect value that could not be measured. Moreover, Samsung, as a large multinational enterprise, should have factored compliance costs into its business decisions; it could not seek to resolve the matter at a negligible cost simply because the infringement generated little direct revenue.

As to Swatch's $170 million claim, the judge considered it divorced from the facts of the case. Samsung had never intended, nor did it need, to undertake any co-branding modifications to its hardware. The licence it would have needed was confined solely to the watch-face software itself and the display of brand names on the app store listing pages. To force Samsung to pay for rights it never sought and had no intention of seeking was, in effect, compelling it to pay an exorbitant premium for "unwanted insurance"—a purely speculative valuation.

Having rejected both expert opinions, the judge devised a novel "risk insurance" licence fee model. He reasoned that what Samsung truly required was not a full co-branding licence, but rather a "compliance insurance" policy covering potential infringement risks within its app store ecosystem—one that would permit Samsung to continue operating the SGA store and tolerate the possibility that third-party developers might upload infringing watch faces, provided that such faces were promptly taken down upon discovery, and that reasonable consideration was paid for the period of infringement before detection.

On that basis, the judge divided the infringement into two categories and priced them separately. The first category was "watch-face display infringement"—the actual downloads onto users' watches, totalling approximately 160,000 downloads. Considering that the watch faces were pure software and users might change them at any time, the judge applied a fixed fee of $10 per download, yielding $1.6 million. The second category was "store-display infringement"—the display of the infringing watch faces' names and icons on the app store listing pages. Such conduct was tantamount to placing Swatch's high-end brands on a low-cost retail shelf, causing ongoing damage to brand image, and warranted a one-time fixed fee of $10 million. The total came to $11.6 million. The judge emphasised that although this figure was unavoidably estimative, it sufficiently respected the intrinsic value of the Swatch brands, avoided excessive punitive damages, and served as a sufficient deterrent to other technology platforms to strictly fulfil their intellectual property review obligations when operating app stores.

The case ultimately concluded with a settlement-style judgment of $11.6 million, affirming the boundaries of the "negotiating licence fee" method in trademark infringement damages: neither can one look solely at the infringer's actual gains, nor can one overestimate, divorced from facts, the value of the right holder's imagined commercial collaboration.