Is upcycling turning into a legal drama for trademark infringement?
According to a recent survey by the Boston Consulting Group, the value of second-hand sales in the fashion and luxury accessories sector currently accounts for 5% of the total sales, and it is predicted to increase to 40% in the coming years.
Not only vintage enthusiasts love to shop secondhand. The turnover of the global second-hand luxury goods market was estimated at USD 4.9 billion in 2021. Statista estimates that this market is set to grow strongly, reaching over USD 14.6 billion by 2027
It started with the good intention of saving the earth but turned into a legal drama
Gen Z and Gen Alpha are more educated on responsibility and green issues than any generation before them
Recently, there has been a growing concern about sustainability, especially among Alpha and Gen Z. This has led to increasing brand initiatives related to upcycling, giving new life to items from previous collections. Some brands are tailoring them, launching dedicated websites for their vintage garments, offering users the chance to resell and collaborating with major reselling platforms such as Vinted, Vestiaire Collective and Depop to ensure better supervision over sales.
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For example, Valentino expanded their Valentino Vintage project last year, partnering with seven international second-hand stores from Seoul to New York to offer a selection of the Valentino vintage garments collected in stage one.
The upcycling trend has become popular in the fashion industry, as companies aim to make fashion more sustainable and reduce waste by extending the life cycle of products. However, this new trend has raised concerns regarding brand protection and intellectual property rights as brands have seen their products reworked by third parties.
A hot brand with a hot legal issue: Levi’s sued Coperni
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Following Chanel, which sued a company in the United States manufacturing jewellery and accessories with buttons taken from the garments of the famous French Maison, Levi’s has sued Coperni for alleged trademark infringement plus the re-selling of modified Levi’s products. Specifically, Levi’s is challenging Coperni’s unauthorised use of fabric tabs like its own and their selling of “reworked” Levi’s products, including Arcuate’s registered stitching and Levi’s tab branding, which could potentially confuse consumers into thinking they are Levi’s collaborations or licensed products.
Companies are facing disputes regarding exclusive trademark rights and the exhaustion doctrine
Other companies, such as Nike, Rolex and Ralph Lauren, have also faced similar disputes regarding exclusive trademark rights and the exhaustion doctrine (or ‘first sale doctrine’ in US law).
Have you ever heard of the exhaustion doctrine?
When a trademark is registered, the owner is granted several rights, including exclusive use and the ability to prevent authorised use. However, according to the trademark exhaustion doctrine, once the owner puts the goods on the market, they can no longer prevent further commercialisation of the same items. Nevertheless, the owner may have valid reasons for opposing such commercialisation, especially when the condition of the goods has changed after they were placed on the market, which could mislead consumers into believing that the trademark owner has authorised such product variations.
The trademark is in the details
The exhaustion doctrine generally allows a third party to provide repair or cleaning services for a product without requiring the trademark owner’s authorisation. However, if a third party modifies the goods with the trademark by permanently and physically altering them for the purpose of reselling (e.g., by changing the colour or adding applications, details, or elements from other brands), the exhaustion doctrine does not apply, and the third party may face legal issues.
Can you 'rework' a branded product in an unauthorised way without being taken to court? Mainly no
The concept of alteration or modification has been interpreted very broadly by Italian courts, encompassing re-packaging, re-labelling and even re-sale with a presentation that harms the trademark’s reputation. From this perspective, a trademark owner may prohibit any changes to a product’s presentation, even if limited to packaging or the overall image. Ultimately, anyone who re-sells modified products while keeping the original trademark on them might be liable for infringement.
What about customising a Dr. Martens without a signed collaboration? Red flag!
When it comes to customised or reworked products, the product must be considered a new good, independent and different from the one placed on the market by the trademark owner and, as a result, not authorised by the owner.
Reworking a product may result in the final assembled good being a completely new item that, while still bearing the original trademark, has not been made or authorised by the trademark owner: red flag!
In 2018, the Court of Udine ruled on a case concerning the production and marketing of brooches made by assembling buttons bearing logos and distinctive traits of a well-known fashion brand. Some of these buttons were original, and others were fake. Concerning the brooches made with counterfeit buttons, the Court of Udine considered the offence indisputable. However, they further specified that using original products also constituted an infringement. Moreover, it was confirmed that the final assembled product was an entirely new item that, while still carrying the original trademark, had not been made or authorised by the trademark owner. The Court of Udine concluded that customisation is detrimental to public trust precisely because the new product bearing the original trademark can mislead consumers about the origin of the product itself.
Even more recently, the Court of Milan held that the ‘Dr. Martens’ trade mark owned by Airway International Ltd. had been infringed by a company that advertised the famous boots as customised with the addition of studs, glitter, paint splatters, fabric inserts, etc. and then sold them as ‘one-of-a-kind designs’ at a higher price than the original goods. As a result, the counterfeit products were seized, and their production, marketing and manufacture were stopped.
How to manage upcycling and trade mark infringements
In today’s scenario, ESG (Environmental, Social and Governance) issues are gaining increasing importance, which means that the upcycling trend requires a trade-off between the public interest in a circular economy to reduce waste and extend the life cycle of fashion products – traditionally destined for less responsible consumption – and the individual interest of the trademark owner. Litigation on these issues, therefore, requires companies to reflect more broadly to ensure that they do not take legal action that may be at odds with their sustainability commitments and campaigns, thus avoiding damaging their image. Some brands have already found a possible solution to this problem by upcycling their products themselves to have full control over their processing and avoid third parties doing it.
Valentina Mazza
Law for the Fashion Product Lecturer, three-year courses, Milan
