Companies do that all the time. You must get the permission (with a few exceptions) from the copyright owner in order to use the likeness of copyrighted material. A watch face can certainly be copyrighted.
This isn't something new or unusual.
What I'm really curious is this: Are they, really? I mean, is there an actual copyright for a watch face (as opposed to watch itself).
Another piece of information I never found about $21M Apple-SBB settlement is what year exactly the SBB station clock design was copyrighted? I bet no one could've come up with the idea in 1944, and apparently there are tons of similar clocks/watches all over the world as this article suggests:
http://hubpages.com/hub/swiss-railway-clock
(Other Clocks Similar to the Swiss Railway Clock).
Somehow I doubt if SBB really went into great pains trying to figure out whether these "similar" design made over the years were in fact the same or had slight differences. But, lo and behold, here comes Apple and a chance to rip $21M, setting a precedent and giving the copyright infringement argument a whole new dimension. Sure, Apple is rich, they can afford it, especially since they were involved in a huge patent battle with Samsung and such at a time and needed some ammo. But seriously, people Isn't it like Microsoft patenting the word and the concept of "Windows"? Or the window interface, for that matter? A watch is a watch, a dial is a dial, and no one is hurt if it is reproduced on a digital device. It's not like they're sold for profit, they're just wallpapers for the screen. However, if they are sold for profit, that could be another story.