South Korea's Supreme Court has ruled that reforming luxury goods for personal use does not constitute trademark infringement, marking the first such decision on whether reform services violate trademark rights.
The ruling effectively eliminates the legal basis that global luxury brands like Louis Vuitton have used to restrict private reform services. The decision is also expected to boost the "upcycling" industry that repurposes old luxury items.
The Supreme Court's Second Division, presided over by Justice Kwon Young-jun, on Thursday overturned a lower court ruling that had favored Louis Vuitton in its trademark infringement and damages lawsuit against reform shop operator A. The case was remanded to the Patent Court. A operates a luxury repair shop in a basement of a building in Seoul's Gangnam district.
From 2017 to 2021, A disassembled Louis Vuitton bags brought in by customers and used the original materials, including fabric and metal parts, to create bags and wallets of different sizes, shapes, and purposes. Reform service fees ranged from 100,000 won to 700,000 won per item.
Louis Vuitton filed suit in February 2022, claiming A had infringed its trademark rights by undermining the brand's source identification and quality assurance functions.
Lower courts ruled in Louis Vuitton's favor, ordering A to stop manufacturing reformed bags and wallets using Louis Vuitton materials and to pay 15 million won in damages. The courts determined that reformed products qualified as goods under trademark law because they held exchange value and were traded in secondary markets. They also found the reform constituted "use of trademark" as consumers could mistakenly believe the products were made by Louis Vuitton.
The Supreme Court disagreed. It ruled that when a reform operator provides modification services upon orders from owners for personal use, this does not constitute "use of trademark" under trademark law.
"A received reform requests from bag owners for their personal use, performed the reform work accordingly, and returned the reformed products to those owners," the court stated. "Even if registered trademarks appear on reformed products, this cannot in principle be considered 'use of trademark' under trademark law."
The Supreme Court established clear criteria for when reform activities could constitute trademark infringement. Infringement may occur when an operator substantially controls the reform process and distributes products in the market through production and sales. The court also noted that reform operators could share legal liability if they provide services knowing, or having reason to know, that owners intend to distribute reformed products in the market.
"Whether special circumstances exist must be determined by comprehensively considering various factors, including the circumstances and content of the reform request, who made final decisions regarding the purpose, form, and quantity of reformed products, the nature of compensation received by the reform operator, and the source of materials used," the court explained. "The burden of proof for these circumstances lies with the trademark holder."
The luxury industry expressed mixed reactions. One industry official said the ruling could be viewed positively as it allows consumers to actively pursue sustainable consumption by extending product lifespans through reform. "A consumer's willingness to reform rather than discard a product reflects deep trust and affection for the brand," the official said.
Another industry official emphasized that "trademarks are not merely logos but assets symbolizing trust and quality that brands have built over time." The official added that personal reform and commercial distribution must be distinguished, and strict responses are necessary when reformed products could be mistaken for official products.
Louis Vuitton declined to comment on the Supreme Court's ruling.