Reforming Luxury Goods -Trademark Infringement
 

Jack Eui-Hwan JUNG, Hannah Hayoung LEE

Case Summary

Recently, the patent court has ruled that the defendant’s actions of reforming a bag bearing the plaintiff's trademark into a new product constituted trademark infringement. The defendant argued that transforming the product via reforming did not infringe under trademark law; however, the court assessed the act as producing a new product. In particular, it was determined that this problem could cause confusion among consumers as to the source, as the original trademark is still clearly displayed on the reformed product.

Verdict Contents

The Court of Korea determined that t the defendant’s reformed product infringed upon the trademark rights because it was sold with the plaintiff's trademark displayed. Specifically, the court ruled that 1) reforming and producing a new product with the plaintiff's trademark attached, and 2) selling the reformed product as is to consumers, constituted "delivery of goods" under the Trademark Act. It acknowledged trademark infringement, considering that such acts could harm the trademark's function of indicating the source and assuring quality.

In a similar case, the Supreme Court of Korea determined that collecting empty containers of expired disposable cameras, reloading them with new film, and reselling the cameras constitutes trademark infringement. This decision was based on the reasoning that, even if the original products were produced and sold with the trademark holder's permission, the process of manufacturing or repairing to the extent where it damages the identity of the original product is an act of trademark infringement (Korea Supreme Court Decision, April 11, 2003).

Comparison with International Law

The U.S. court determined that reforming a renowned brand’s watch at a customer’s request—such as altering the bezel, dial, or strap, or adding diamonds to the dial—and then selling the watch constituted trademark infringement (Rolex Watch, U.S.A., Inc. v. Michel Co., 179 F.3d 704 (9th Cir. 1999)). Likewise, the Japanese court ruled that replacing only the shaft of a famous brand’s golf club with a third-party shaft, and subsequently selling the modified club, was an act of trademark infringement (Tokyo District Court Decision, December 25, 1998).

Implications

This ruling once again clarifies the scope of trademark protection, confirming that trademark rights can still be applied to reformed products that originally bear a trademark.

Even though they are reformed, using the brand name without authorization increases the likelihood of a counterfeit. If these products are maliciously distributed on the second-hand market as genuine, ordinary consumers may unintentionally purchase them as genuine and suffer unintentional damage. Furthermore, such sales can pose significant risks to the brand owner’s reputation and undermine consumer trust.

Although receiving compensation for reforming or customizing is a serious illegal act that violates other people’s intellectual property rights, there is often a lack of accurate awareness of this issue. It should be noted that reforming and customizing genuine products and distributing them can constitute a violation of Trademark Act.