Is unauthorised fashion upcycling lawful? Not according to French first instance court

On 10 April last, the Tribunal Judiciaire de Paris ruled that S.A.S. MAISON R&C, S.A.S. ATELIER R&C, and Géraldine Lugassy Demri (defendants) had infringed the copyrights and the word mark ‘Hermès’ owned by SOCIÉTÉ HERMES INTERNATIONAL and S.A.S. HERMES SELLIER (claimants/Hermès) by reproducing the original graphic works – imprinted onto Hermès’ silk square scarves – on the denim jackets they produce and market, and by using the sign ‘Hermès’ both on those jackets and on their websites and social media accounts. The defendants argued that Hermès’ designs on the scarves could not constitute original works, and even if they did, its rights over those works and its word mark had been exhausted, and in any event, the freedom of the arts as well as environmental protection allowed them to use the scarves for the purposes of upcycling. However, the court, siding with the claimants, rejected all these defences and found the defendants liable for copyright and trade mark infringement.

Background

‘Hermès’ is the claimants’ word mark, which has been registered since 1936 for clothing and fashion accessories in Class 25 of the Nice Classification. Additionally, the claimants, under the Hermès brand, have been producing silk square scarves with various designs since 1937.

A Kat trying to decide whether she should
upcycle her old fashion items or
simply throw them away...

As part of their upcycling practices, the defendants attached patches cut from Hermès scarves onto Levi’s denim jackets. In addition to some pre-designed denim jackets advertised and sold through their website and Instagram accounts, they demonstrated many other options they have in their catalogue – which had additional Hermès scarves – that buyers could customize. Some of the defendants’ products also featured the word mark ‘Hermès’ as it appeared on the scarves.

The defendants had refused to comply with Hermès’ cease-and-desist. As a result, Hermès sued the defendants for copyright and trade mark infringement.

Copyright infringement

Hermès claimed that, under Articles L.111-1, L.112-1, and L.335-3 of the French IP Code (IPC) [here for the English translation], the designs applied to its scarves are original graphic works, and thus reproducing them without authorization constituted copyright infringement.

As mentioned, the defendants challenged the copyright status of the said designs due to lack of originality. However, the court found that all of them were results of their designers’ free and creative choices, and thus they were their authors’ own intellectual creations. Accordingly, reproducing those designs in the denim jackets, in the absence of any valid defence or exception, would amount to copyright infringement.

Some of Hermès' silk scarves with original graphic works imprinted

The defendants alternatively argued that the principle of exhaustion, under Article L.122-3-1 IPC, prevented a finding of copyright infringement as the distribution right that the claimants had enjoyed was exhausted after the first lawful sale. In assessing this defence, the court, emphasised that copyright works should not have “undergone an alteration of … medium” in order for the principle of exhaustion to be applicable, in line with the interpretation of the Court of Justice of the EU.

The court found that, even attaching the scarves themselves that include copyright works to denim jackets was sufficient for a change of medium of the copyright works, and thus ruled that the defendants cannot benefit from exhaustion. In addition to the broad interpretation of copyright and originality, this narrow interpretation of the principle of exhaustion further limits the re-use of existing fashion products in the production of new items.

One of the defendants' jackets

While Hermès’ designs were no longer part of products usable as scarves, the designs had not been extracted from the scarves and then re-applied to (i.e., reproduced in) the jackets. This, therefore, should have prevented a finding of infringement of the reproduction right. Regarding the distribution right, however, the same cannot be said as easily. Although the defendants merely attached the scarves to the back of their denim jackets – which may, at first glance, suggest that the medium of the copyright works (i.e., scarves) remained unchanged – when read in light of CJEU case law, it becomes clear that exhaustion does not apply where a physical transformation of an object has taken place [see here].

In this Kat’s view, simply attaching scarves bearing copyright works to other fashion items in the process of upcycling should not have prevented the applicability of the exhaustion principle. However, since the scarves have undergone a physical transformation (i.e., from being scarves, to serving as ornamental attachments to jackets), the language of the CJEU may lead to the conclusion that the distribution right has been infringed, as ruled by the French court.

The defendants finally attempted to avoid liability by arguing for the freedom of the arts and the right to a healthy environment. They argued that, in the present case, these interests – which are also enshrined in Articles 11, 13, and 37 of the Charter of Fundamental Rights of the EU – should outweigh the claimants’ copyright in order to ensure the fair balance between authors and users. The court acknowledged the importance of setting the balance right. However, it held that the denim jackets did not have any artistic character other than that conferred by the original designs on the scarves, and that the upcycling of scarves did not amount to any creative or artistic exercise. Likewise, the court stated that, although protection of the environment is a justifiable limit that can be imposed on the claimants’ property rights, the upcycling practice of defendants could not be considered as such. This was primarily because the main objective of upcycling the scarves was the defendants’ own commercial gain.

It seems that, had the defendants’ overarching intentions been artistic or environmental, the court might have been more inclined to allow them to benefit from the exceptions and limitations to copyright law. However, as the principal intention – arguably concealed under the guise of upcycling – appeared to be taking an unfair advantage by distributing Hermès’ original designs in their commercial practices, it becomes difficult to contest the court’s finding of infringement of the distribution right.

Trade mark infringement

The claimants’ word mark appears on some of the denim jackets produced and marketed by the defendants, because on some of the jackets the defendants used parts from Hermès’ scarves that included the word mark. Moreover, according to the claimants, even jackets that did not bear the ‘Hermès’ mark constituted infringement because, under Article L. 713-2 IPC, the defendants were prohibited from removing the trade mark from the scarves while cutting patches from them. Although the defendants again claimed that their upcycling practices should benefit from the exhaustion of the trade mark on the second-hand scarves, the court did not allow the defence.

Defendants' website, demonstrating the available jacket designs

As stated in Article L.713-4 IPC trade mark proprietors, even when their rights are exhausted upon first sale, can still object to certain uses of their mark where legitimate reasons exist. In the case at hand, the alteration of the state of the scarves and the removal of the word mark from some of them, constituted legitimate reasons thereby preventing defendants from avoiding liability for trade mark infringement.

In addition to the obstacles fashion upcycling faces due to interpretations of copyright law that arguably favour authors, trade mark law offers no room for manoeuvre either. While acknowledging the principle of exhaustion, IPC and EU Trade Mark Regulation (Article 15(2)) provide for a significant proviso, which practically renders the exception ineffective. It is thus doubtful that unauthorised parties can ever avoid trade mark infringement when they engage in upcycling, because, as can be seen from this case, both the removal of the trade mark (and/or changing the condition of the goods) as well as keeping them unchanged in the upcycled products constitute infringement.

Concluding remarks

The Oxford Dictionary defines “upcycling” as “the action or process of repurposing or renovating an old or unwanted item to make it more attractive”. It follows that upcycled products inevitably undergo some degree of change since the goal is to create new items from old ones. This demonstrates that a narrow interpretation of copyright exhaustion, in essence, prohibits the distribution of upcycled fashion items bearing copyright works due to the alterations involved in the process – as the court appears to have affirmed. The mere act of upcycling, however, should be legitimate as, at least in the case at hand, it did not include any act of copying/reproduction.

Trade mark infringement, however, might be difficult to avoid, given the express terms of the IPC and EUTMR: Upcyclers cannot retain the trade mark of the initial goods on their upcycled items as this might constitute infringement due to a likelihood of confusion. Likewise, it is possible that trade mark owners can, in most cases, prevent both the removal of their marks and any alteration to the condition of their goods in the process of upcycling, under the proviso to the principle of exhaustion, demonstrated above.

It seems to this Kat that, the Tribunal Judiciaire de Paris has, despite applying EU law consistently and accurately, built on the approach of providing very limited room for unlicensed upcycling in the fashion industry. By significantly curtailing – if not effectively precluding – the possibility of upcycling in the fashion industry without licences, the court also demonstrated the validity of the concerns and calls for change recently raised by Irene Calboli, Margherita Corrado, and Martin Senftleben in The Handbook of Fashion Law [IPKat here].

Image credit: Gemini AI