Personally Owned Luxury Goods Customization Sparks Debate: 'Trademark Infringement' vs. 'Personal Use'

Financial News – The Supreme Court of Korea held a public hearing to determine whether 'customized products' made by repairing or altering luxury bags constitute trademark infringement.
On the 26th, the Second Civil Panel of the Supreme Court of Korea, presided over by Justice Kwon Young-jun, conducted a public hearing for this case in its first small courtroom. This marks the sixth time a four-justice panel, rather than the full bench, has held a public hearing, and the second time this year.
The case began when Louis Vuitton filed for an injunction against trademark infringement and damages against a luxury customization business. The defendant has been repairing and customizing leather goods since the late 1970s and now specializes in customizing products from well-known luxury brands. Beyond simply repairing damaged parts, the company repurposes leather from old luxury bags to create two smaller bags or even wallets, offering these new items to customers.
Both the first and second trial courts found that the actions of the customization provider constituted trademark infringement and ruled in favor of Louis Vuitton. The Supreme Court of Korea held this public hearing ahead of its final decision.
The plaintiff argued, 'Even after customization, the products continue to use the registered trademark, which constitutes trademark infringement.' They expressed concerns that consumers may be misled by products not released by the brand, potentially damaging its reputation.
They further asserted that dismantling existing products to manufacture entirely new items is akin to producing counterfeit goods.
In response, the court questioned the plaintiff, stating, 'Unlike counterfeits, personal customization cannot be mass-produced, and if the activity is for private use rather than further distribution or sale, the degree of harm to the company is limited.'
The defense attorney representing the customization business argued, 'Owners of luxury bags are free to customize their bags for personal use, whether they do it themselves or through professionals.' He emphasized that, 'Customizing a bag at the owner's request for personal use does not constitute trademark infringement.'
Yun Seon-hee, an honorary professor at Hanyang University School of Law and an expert witness for the defense, stated, 'The customization provider merely returns the modified product to the owner and does not distribute it in the market, so the customized item does not qualify as a product under trademark law.' She added, 'The plaintiff (Louis Vuitton) and the defendant (customization provider) are not direct competitors, and there is no likelihood that consumers will be misled or confused about the source of the goods.'
After the public arguments from both sides, the court mentioned that it would consider additional questions and factors for its final ruling. For example, if the plaintiff claims damages due to customization, it remains to be determined whether Louis Vuitton can quantify the economic loss caused by individual customizations. The plaintiff's attorney stressed that even if there is no issue with consumers requesting customization, conducting such modifications as a professional business and creating new products from dismantled originals constitutes trademark infringement.
The court remarked, 'In the past, customization of branded jeans and clothing was common and rarely problematic. However, the current situation with bag customization is different due to the unique nature of leather goods, the exchange value of customized products, and the potential for third-party sales.'
The court added, 'We will comprehensively consider whether allowing customized products within the owner's private use benefits social welfare or the public interest, or whether restricting such activities to protect trademark value better serves society.'
The Supreme Court of Korea will determine the date for its final ruling after reviewing the arguments presented at the public hearing.

hwlee@fnnews.com Lee Hwan-joo Reporter