Since it was named the “Biggest Trend in Fashion Right Now” by Vogue UK in 2020,[1] upcycling has been one of the buzzwords going round in the fashion industry. Briefly put, upcycling is used to describe the reuse of existing products – such as furniture or clothing – in order to make new products that are more valuable or at least more attractive to consumers.

The difference between upcycling and recycling lies not just in the aim of creating something with a higher value, but also in the fact that upcycling usually doesn’t entirely reduce an existing product to its raw materials. Rather, it leaves the existing product partially intact and tries to breathe new life into it. Think for instance of a chandelier made of old wine glasses, a handbag made of old jeans, or a book case made of an old ladder.

The rise of upcycling

Driven by the growing importance of sustainability and the realisation that we need to move towards a circular economy, upcycling has gained momentum in recent years and is becoming more and more mainstream. This is only expected to increase further with the upcoming national implementation of Extended Producer Responsibility regimes for the textile industry, under which producers will become financially and operationally responsible for the recycling and reuse of textiles they put onto the market.

The rise of upcycling is also starting to present the first IP conflicts, and indeed from a trademark law perspective upcycling could run into a number of hurdles. Let’s take a quick look at some of those below.

Tension between trade mark law and upcycling

EU trademark law provides for the doctrine of exhaustion. This means that after a first sale in the European Economic Area (EEA) by the trademark owner or with their consent, the trademark rights in relation to that particular product are in principle exhausted and third parties are free to sell on the trademarked goods.

However, an exception is provided in case the trademark owner has legitimate reasons to object to the further marketing of the goods, especially where the condition of the products has been changed after they were put on the market by the brand owner. One can imagine that this almost always applies to upcycling. After all, the exact point of upcycling is to change an existing product and turn it into something that is more valuable or more attractive.

What to do with upcycling?

So what is an upcycler to do? Although there is no case law yet from the Court of Justice of the European Union (CJEU) that fits this exact topic, it seems clear that in most cases keeping the original trademark for an upcycled product would amount to trademark infringement. So should the original trademark be removed and is that in fact allowed? Or could a disclaimer be sufficient?

The 2018 decision of the CJEU in Mitsubishi (C-129/17) casts some doubt on the permissibility of removing of a third party’s trademark. Although the case could be said to be limited to quite specific circumstances and shouldn’t be seen as a general rule, it does create some risk of trademark infringement for upcycling. Furthermore, in some cases it may simply not be possible to remove a trademark, for instance where the trademark covers the shape of the product itself, or the pattern applied to it.

Disclaimers have been suggested as an alternative option, which has been approved in the past by the CJEU for situations such as the repackaging of medicines from other EU countries (C-427/93) or the refilling of gas bottles (C-46/10).

Yet one can wonder whether a disclaimer would be workable and sufficient in case of for instance upcycled fashion products to take away any impression of a commercial connection with the trademark owner. In the Arsenal v Reed case (C-206/01), the CJEU already held that a disclaimer at the location of sale would not be sufficient to take away the risk of so-called post-sale confusion. And while applying a disclaimer prominently on the product itself may make things clearer, it will probably make the product unmarketable.

Conclusion

EU trademark law currently does not seem to provide a solid solution for making upcycling possible in all cases. In addition, copyright law, design rights, and in some countries perhaps even rights of unfair competition could throw up further hurdles.

Upcyclers are therefore recommended to tread carefully and pay attention to any IP rights. While genuine attempts to foster a more sustainable world should be encouraged,  it is important to strike the right balance. In some cases one can even wonder whether sustainability is not just used as an excuse to take unfair advantage of a well-known brand’s reputation, and whether upcycling is actually the most sustainable way forward if the existing product is still desirable in itself.

* This item was based on a longer article previously published in the Dutch journal Intellectuele Eigendom en Reclamerecht (IER).