The Korean Supreme Court has recently overturned an IP High Court decision that had previously found a bag refurbishment service provider to be liable for trademark infringement. The Korean Supreme Court ruled that refurbishment performed at the request of product owners for their personal use does not, in principle, constitute “trademark use” under the Korean Trademark Act (Case No. 2024Da311181, decided on February 26, 2026).

Case Background

Louis Vuitton Malletier (“Louis Vuitton”) is the registered owner of well-known monogram trademarks in Korea for bags and wallets. From around 2017 to 2021, the defendant operated a bag refurbishment business. For a fee, the defendant received Louis Vuitton bags from their owners, disassembled them, and used the original fabric and metal parts to construct new bags and wallets of different sizes, shapes, and forms, which were then delivered to the requesting owners. Customers selected designs from samples displayed at the defendant’s store or photos posted on the defendant’s website. Ownership of both the original and the refurbished products remained with the customer throughout, and the fee was characterized as compensation for the refurbishment service. Louis Vuitton brought a suit, primarily asserting trademark infringement and, alternatively, unfair competition by trademark dilution.

IP High Court Decision

The IP High Court ruled in favor of Louis Vuitton. It held that the refurbished products carried independent exchange value and qualified as “goods” under the Trademark Act, and that the defendant, by disassembling the original products and reconstructing them into substantially different new products, had effectively manufactured new goods. The marks displayed on those products would be perceived as identifying the producer or seller, so the defendant’s display and delivery of the goods bearing the Louis Vuitton marks constituted “trademark use” and therefore direct trademark infringement.

Supreme Court Decision

The Supreme Court reversed the IP High Court’s Decision and remanded the case back for retrial and reconsideration. It held that when the owner of goods bearing a registered trademark refurbishes (alters, customizes, or upcycles) those goods for personal use, displaying the trademark during such refurbishment does not constitute “trademark use” so long as the refurbished product is not placed into commerce, because such acts do not threaten the trademark owner’s business goodwill or the fairness of competition in the marketplace. The same principle extends to professional refurbishers who, at the owner’s request, refurbish goods for the owner’s personal use and deliver them back to the owner: even though the service is provided as a business, it represents an extension of the owner’s exercise of ownership rights, the refurbished goods do not enter the stream of commerce, and the fee received is compensation for the service rather than for the sale of a new product.

The Court emphasized that “trademark use” under Korean law is closely tied to placing goods into commerce, consistent with the international standards of “use in the course of trade” under the EU Trade Mark Regulation and “use in commerce” under U.S. trademark law. The Court also noted that refurbishment serves recognized values such as freedom of expression, consumer welfare, circular use of resources, and environmental sustainability, all of which warrant consideration when defining the scope of trademark protection.

The Supreme Court recognized an important exception. Where, despite the formal appearance of a personal use refurbishment service, the refurbisher in substance dominates the refurbishing process and effectively manufactures and markets the refurbished products as its own branded merchandise placed into commerce, trademark use and infringement can still be established. Relevant factors include: (i) who exercises final decision-making authority over the purpose, form, and quantity of the refurbished product; (ii) the character of the compensation; (iii) the source and proportion of materials used; and (iv) the ownership relations during and after the process. The trademark owner bears the burden of proving such “special circumstances”. Joint liability may also arise where the owner requests refurbishment with the intent of placing the result into commerce and the refurbisher knew or should have known of such intent. Since the IP High Court found infringement based solely on the substantial transformation of the original products, without examining whether such special circumstances were present, the Supreme Court vacated the relevant portions of the IP High Court’s decision and remanded the case for further proceedings.

Significance

This decision marks a significant shift in the Korean legal landscape surrounding refurbishment and upcycling. By drawing a clear line between “trademark use” tied to the circulation of goods in the stream of commerce and acts confined to the personal-use sphere of the owner, the Supreme Court has recognized that refurbishment services performed for personal use do not, by themselves, infringe trademark rights, aligning Korean law more closely with the international “use in commerce” standard while balancing trademark owners’ interests against the values of property rights, freedom of expression, consumer welfare, and environmental sustainability.

At the same time, the decision leaves meaningful room for trademark owners to pursue infringement claims against a refurbisher which exceeds the role of a service provider and effectively operates as a producer of branded goods. The “special circumstances” test, focused on who controls the process, how compensation is structured, and whether the refurbished products enter the market, is likely to become the central battleground in future disputes. On remand, the IP High Court will need to apply this new framework to the specific facts of the case, including the defendant’s use of pre-made design samples and a publicly accessible website displaying refurbished products. The outcome of the remand proceeding warrants close attention, as it will provide important practical guidance on the boundary between protected personal-use refurbishment and infringing commercial production, an issue of growing significance for both trademark owners and the broader refurbishment industry in Korea.