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While it is hugely speculative on my part, my guess is that nothing will come of any potential criminal investigation. I say this as it appears that you were an unwitting party as to the counterfeit nature of the item.
In fact, you might consider calling the police yourself. You could report the fact that you unknowingly purchased counterfeit merchandise and then, more than a year later, sold that same items to another person.
Please let me know if anything requires clarification.
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Why do you think nothing will come of it?
Also, the guy bought the watch from me 100 miles from where I live. If he were to call the police, who would he call? Would it be the police in the city he bought the watch or the police in the city that I live which is 100 miles away? Will I be arrested?
Last, I believed the watch was real. I have a receipt saying the watch was real too. Doesn't the buyer have some responsibility in this as well?
As I stated above, I suspect nothing will come of this as you had no knowledge of the counterfeit nature of the item. For law enforcement to make an arrest, they would want some evidence that you knowingly sold a counterfeit item. As no such evidence exists, my guess is nothing will come of it.
If he were to call the police, he would likely do so in the area in which the transaction occurred.
Doesn't WHAT buyer have responsibility? You or the person that bought it from you? Either way, and as a general rule, the buyer does not have the responsibility to ensure that the item is counterfeit, rather the seller has an obligation to not hold out an item as something it is not.