It is estimated by the United Nations Environment Programme that 20% of global water waste and 10% of global carbon emissions are produced by the fashion industry. It is predicted that by 2030, emissions solely from textile manufacturing, are projected to skyrocket by 60%. The classic mantra of sustainability - 'Reduce, reuse, recycle' – has never been more of a pertinent call to action than for today's fashion industry.
It's estimated that only 8% of old clothes are reused and a further 10% are recycled. With more than two-thirds of all clothing on the planet made of plastic materials, the result is that most of our discarded apparel ends up in landfills, taking over 200 years to decompose.
Thrifty solutions
A problem so vast may seem insurmountable, but innovative and creative solutions for reuse and resale of clothing are taking hold. In South Africa, second hand fashion has seen significant growth, accounting for an estimated 9.1% of the country's apparel market revenue.
In the UK, that's likely an even higher number, with an estimated 40% of consumers saying they shop second hand to afford high end brands. It's likely that this trend will increase globally, as second hand takes over 10% of global fashion sales.
Upcycling
Another way brands are creating revenue from excess is through upcycling, which involves modifying old or outdated existing products to make them appealing to consumers again. Circular and sustainable fashion are promoted through upcycling, as existing materials remain in circulation, increasing the clothing's lifespan and preventing the frequency of items being discarded in landfills.
From a design perspective, deconstructing and reconstructing garments gives the clothing a second life and creates new styles, often with a unique fit and fabric composition. Furthermore, upcycling can minimise the need to produce new synthetically created materials, reducing carbon emissions released from manufacturing and limiting the circulation of synthetic materials, which have a greater environmental impact post-production.
Upcycling involves various aspects of the design process and can be labour-intensive, creating scope for high-end upcycled clothing, including unique, once-off pieces which can be sold at a premium. This is unlike second-hand styles which are often heavily discounted.
Luxury brands such as Balenciaga, Miu Miu, Loewe, and others, have embraced upcycling—particularly considering the pandemic, which led to approximately $179bn worth of excess inventory from the spring/summer 2020 collections. And it seems that there is a market for it, especially among Gen Z and Gen Alpha, with approximately 68% of these generations reportedly willing to pay more for sustainable and environmentally friendly products.
IP limitations for upcycling - trade mark exhaustion principle
While upcycling offers many benefits to consumers and the fashion industry, it raises some interesting legal questions. It is important that businesses engaged in upcycling and those in the fashion industry holding the intellectual property (IP) rights are aware of the IP implications associated with upcycling.
According to the trade mark exhaustion principle, once a trade mark owner introduces trademarked products into the market, they can no longer prevent the further commercialisation of the same items by a third party as their ability to control the further distribution of that item is 'exhausted'.
In other words, if a trade mark owner sells goods bearing their trade mark, the trade mark owner cannot prevent the purchaser or another person who comes into lawful possession of the goods, from reselling the items under the original trade mark.
However, this principle may not apply to upcycled products that use materials displaying trade marks, as it may constitute trade mark infringement if the products are materially different from the originals.
In such an instance, if the infringing party uses the trade marks without the owner's consent and the use of the trade marks could lead to a likelihood of confusion amongst consumers as to the source of the products, there is potential for trade mark infringement.
Recent case law
Although the South African courts have not yet dealt with this issue, it is clear that our law prohibits using trade marks in a way that confuses consumers or misrepresents the origin of goods. A few cases in the United States have applied the exception of material difference to the exhaustion principle, in relation to upcycling.
In Chanel, Inc. v Shiver and Duke, LLC, Shiver and Duke, an upcycling company, was refashioning Chanel buttons bearing the iconic CC monogram on chains, earrings and bracelets.
Chanel issued a complaint against Shiver and Duke for trade mark infringement, unfair competition and trade mark dilution. The Southern District of New York entered a stipulated judgment in favour of Chanel, permanently preventing Shiver and Duke from upcycling and refashioning authentic Chanel buttons bearing the CC monogram.
Catherine Schenck 14 Jul 2023
Material difference exception
Part of the court's reasoning, aside from the obvious material difference in the buttons not being used on clothing but instead for jewellery, was that the commercial interest in the jewellery produced by Shiver and Duke was in the use of Chanel's CC monogram and in the use of the Chanel name to promote and market the jewellery. Therefore, the use of the mark was deemed to be trade mark infringement.
In Louis Vuitton Malletier S.A.S. v Sandra Ling Designs, Inc, Louis Vuitton alleged trade mark infringement by Sandra Ling Designs for the sale of apparel, handbags and accessories made from supposedly authentic pre-owned Louis Vuitton goods customised with stones, tassels, and beading.
Sandra Ling deconstructed the Louis Vuitton products and added them to her creations, with Louis Vuitton arguing that her actions fell within the material difference exception. The case was ultimately settled, and Sandra Ling was permanently prevented from refashioning Louis Vuitton items.
In PRL USA Holdings v VNDS Los Angeles, Polo Ralph Lauren alleged that VNDS committed trade mark infringement and counterfeiting. VNDS, a vintage clothing company, sold a hat it had upcycled from a pair of vintage Ralph Lauren swim shorts.
Polo Ralph Lauren argued that VNDS sold its products “in an effort to exploit Ralph Lauren’s reputation in the market [which was] established in the Ralph Lauren Trademarks and Ralph Lauren Products". The court issued a default judgment in favour of Ralph Lauren for a permanent injunction against VNDS and damages amounting to $800,000.
Jani Cronjé and Daniella de Figueiredo 11 Oct 2024
Sustainable solutions
While these cases emphasise the legal limitations placed on upcycling, litigation in this area should prompt companies to reflect more broadly to ensure that they do not take legal action that may be at odds with their sustainability commitments, thus avoiding damaging their image.
Some brands have already found a possible solution to this problem by upcycling their products themselves, allowing them to maintain full control over their processing and avoid third parties doing so.
Brands may also consider partnering with upcyclers to have greater control while still encouraging the upcycling process.
Mind the IP trap
The exhaustion principle can be seen to support upcycling by enabling consumers to repurpose materials after the first sale, contributing to sustainability and reducing waste.
On the other hand, the exception to the principle and other IP limitations can limit the scope of upcycling, conflicting with the goal of reducing waste and promoting sustainable consumption.
In continuing to address ESG concerns, upcyclers must ensure that their activities comply with IP laws to avoid legal challenges, as trade mark owners may object to upcycled products, claiming infringement or dilution of their brand.
To navigate this principle, it is best to avoid using the original product's branding in a way that misleads consumers.
