Supreme Court Rules "Reforming Customers' Luxury Bags Is Not Trademark Infringement"

Louis Vuitton's Trademark Infringement Lawsuit

The Supreme Court has ruled that "reforming" luxury bags entrusted by customers into bags or wallets of different shapes does not constitute trademark infringement.

The Second Division of the Supreme Court (Presiding Justice Kwon Youngjun) on the 26th overturned the appellate court's decision, which had partially ruled in favor of Louis Vuitton in its lawsuit seeking to prohibit trademark infringement against a bag reformer identified as A, and remanded the case to the Patent Court.

The Supreme Court held that "reform acts in which the owner of a product alters the product for the purpose of personal use do not constitute trademark infringement, as long as the altered product is not distributed in the commercial market," and added, "Even where a reformer performs the reform at the owner's request and then returns the item, this, in principle, cannot be regarded as use of a trademark under the Trademark Act."

However, the Supreme Court stated that trademark infringement may be established if the reformer distributes the reformed products in the market as their own products. It specified that, in determining whether such special circumstances exist, courts must comprehensively consider (i) the background and details of the reform request, (ii) the purpose and quantity of the reformed products, (iii) the nature of the consideration paid, and (iv) the source of the materials. The Court particularly emphasized that the burden of proof for these exceptional circumstances lies with the trademark holder alleging infringement, not with the reformer.

This case began when Louis Vuitton filed suit, taking issue with the fact that its logo remained affixed to the reformed bags. The courts of first and second instance ruled that "fabric bearing Louis Vuitton's trademark may not be used to manufacture reformed products," and ordered A to pay 15 million won in damages to Louis Vuitton.

In view of the significant social impact of this case, the Supreme Court proceeded with caution, including by holding a public hearing in December last year to hear opinions from experts in various fields.