South Korea's Supreme Court ruled that reforming luxury brand bags does not constitute trademark infringement when done for personal use, establishing the first legal standard for personal reform activities.
The Supreme Court's Second Division, presided over by Justice Kwon Young-joon, on Thursday overturned a lower court ruling that partially favored Louis Vuitton in its trademark infringement lawsuit against reform business operator A, remanding the case to the Patent Court.
From 2017 to 2021, A produced bags and wallets of different sizes, shapes, and purposes using Louis Vuitton bag materials provided by customers, charging 100,000 to 700,000 won per reformed item. Louis Vuitton filed suit in February 2022, claiming A infringed its trademark rights by undermining the brand's source identification and quality assurance functions.
The first and second instance courts ruled in Louis Vuitton's favor, ordering A to cease manufacturing reformed bags and wallets using Louis Vuitton materials and pay 15 million won in damages. The appellate court reasoned that consumers could mistake the reformed products as Louis Vuitton originals since the trademark remained visible and no labels indicated the items were reformed or recycled.
However, the Supreme Court reversed the ruling. "When a reform operator receives a request for personal use from a bag owner, performs the reform, and returns the product to the owner, displaying the trademark on the reformed product does not constitute 'use of trademark' under trademark law and therefore does not establish trademark infringement," the court stated.
The Supreme Court noted that A received reform requests from bag owners for personal use purposes and returned the completed products to those owners. "Even if registered trademarks are displayed on reformed products, this cannot be considered 'use of trademark' under trademark law in principle," the court ruled.
However, the Supreme Court indicated that trademark infringement could be established if an operator leads the reform process while producing and selling products for distribution in the market.