On February 26 2026, the Supreme Court of Korea (Case No. 2024Da31181) held that a reform service provider’s act of remodelling luxury handbags bearing a plaintiff’s registered trademark and returning the reformed goods to the owners who requested the service does not infringe trademark rights.
Background and procedural history
The case arose when Louis Vuitton filed an infringement and damages lawsuit against a South Korean reform service provider. The plaintiff alleged that the defendant’s remodelling of goods constituted trademark infringement and an act of unfair competition.
In the dispute, the provider received products bearing the plaintiff’s registered trademark – commonly known as the Monogram pattern – at the request of the owners of the luxury bags.
Utilising the original outer materials bearing the Monogram pattern and some additional parts and interior labels that had not been present on the original products, the provider reconstructed bags and wallets that differed significantly from the original products in terms of size, shape, and function. These reformed goods were then returned to the respective customers.
This practice prompted a legal challenge, leading the Intellectual Property High Court of Korea to rule that the service provider’s act of refashioning the goods, as described above, constituted infringement of the plaintiff’s trademark rights for the reasons set forth below:
In the course of business, the reform service provider retained and displayed the plaintiff’s trademark on the outer materials of the reformed products, which constitutes the ‘display of a trademark on goods’; and
As part of its business operations, the provider engaged in the ‘use of a trademark’ under the Trademark Act by ‘delivering’ the reformed goods to the customers.
The Supreme Court’s ruling
The Supreme Court took a different view. The court established the following criteria to determine whether reforming goods – through alteration, customisation, or upcycling – in a manner that substantially transforms the original trademarked product into a different form constitutes an infringement of trademark rights:
Where the owner of the goods performs the reform personally for private use:
The reformed products are not placed into the stream of commerce or circulated in the general marketplace;
The reformed products are solely for the owner’s personal use;
In such cases, the act of reforming does not constitute trademark infringement.
Where a reform service provider (acting in the course of business) performs the reform:
The reform is requested by the owner of the goods for personal use;
The reformed product is produced in accordance with that specific request;
The reformed product is returned to the owner;
In such cases, the display of the trademark on the reformed product does not amount to trademark infringement.
However, the court still made it clear that even if the act may appear to be the provision of reform services on the surface, trademark infringement may still be established under exceptional circumstances, such as when:
The reform service provider substantially dominates and leads the entire reform process; and/or
The provider places the reformed products into the stream of commerce (e.g., by producing and selling them) as its own inventory, thereby causing the products to circulate in the general marketplace.
Accordingly, in determining whether the acts of the reform service provider constitute trademark infringement, the court adopted a comprehensive approach by considering the following factors:
The specific circumstances and details of the owner’s request;
The party who ultimately decides the purpose, form, quantity, etc., of the reformed products;
The nature of the consideration received by the service provider (i.e., whether it is the sale price of goods or a fee for the provision of services);
The source of the materials supplied and the proportion of new versus original materials used in the reformed product; and
The ownership of the reformed product.
Based on the factors above, the court concluded that a service provider does not commit trademark infringement when modifying items at a customer’s request for personal use. Consequently, it remanded the case to the Intellectual Property High Court.
On remand, the court may re-examine and adjudicate the plaintiff’s remaining arguments that were previously unaddressed, such as trademark dilution under the Unfair Competition Prevention and Trade Secret Protection Act and the issue of post-sale confusion.
Significance and implications of the ruling
In its press release, the Supreme Court emphasised the landmark nature of this ruling, as it is the first instance in which the court has comprehensively established legal principles regarding the trademark implications of third-party reform services.
With respect to the Intellectual Property High Court’s prior ruling, some quarters expressed the view that deeming reform for personal use as unlawful trademark infringement was excessive, maintaining that when owners modify their own property due to dissatisfaction with the after-sales service of brand owners or a desire to express individuality, such reform constitutes a legitimate exercise of ownership rights.
In response to such concerns, the court – which ordinarily conducts written hearings – took the exceptional step of holding an oral argument in open court, given the importance of the issue and the high level of public interest. The court heard opinions from the parties to the litigation as well as from experts, among others, and took every procedural measure to ensure a fair and comprehensive deliberation.
Nevertheless, some argue that the court’s ruling may still be insufficient to protect trademark rights against sham transactions. Under the guise of lawful reform, a provider could use nominal customers to mass-purchase inexpensive used goods to produce items that effectively replicate new designs, subsequently disguising and selling them as genuine products.
Therefore, luxury brand owners would be better served by pre-emptively securing not only trademark rights over product patterns and three-dimensional shapes but also design registrations for their latest creations.
