Melbourne Fashion Week celebrates its 30th year with a focus on evergreen collections. In recent years, there has been a surge in demand for sustainable fashion. With the burgeoning of more ecologically minded consumers, and a second-hand market in Australia valued at $60 billion, the upcycling movement is on-trend. In this article, we explore how to navigate some of the intellectual property considerations that every upcycler and brand owner should know.

Key takeaways

• Upcyclers should check if the use of another fashion designer’s original print designs, brands, logos and original concepts may infringe IP rights and ensure they do not make any representations that their products are affiliated or authorised by that designer.
• While the sale of upcycled products can infringe intellectual property rights, a measured approach should be taken by fashion designers in dealing with unauthorised upcycling uses of their IP in a manner that does not result in consumer confusion, brand dilution or reputational harm.
• Brand owners should ensure that their key trade marks, designs, and inventions are registered and are comprehensive enough to deter potential IP misappropriation.
• Trade mark and online watches can be implemented to monitor merchants selling unauthorised upcycled goods that incorporate copyright material, trade marks, designs or patented inventions of other designers.

Upcycling on the up

In fashion, upcycling involves transforming old clothing, accessories, bags and jewellery into new high quality or more valuable reworked fashion items.

Increased consumer awareness about the ecological impact of their fashion choices has led to a rise in demand for upcycled products. Research from the Australian Retail and Consumer Studies (ACRS) Research Unit indicates that nearly a third of Australian consumers have consciously shifted their shopping habits toward environmentally-friendly products.¹

Risk of IP infringement for upcyclers

Upcyclers should be mindful that selling creatively transformed products that incorporate another party’s copyright material, designs, trade marks and patented inventions, may infringe IP rights. A graphic print design, a handbag lock, the distinctive shape of a pair of sunglasses, or a component of an earring, are all things that can be the subject of IP registered rights or reputation-based rights. The exhaustion of IP rights principle applies in Australia to some extent – recognising that in certain contexts, the subsequent sale of genuine second-hand goods may be permissible. However, the subsequent unauthorised use of another party’s IP in a materially modified upcycled product may encounter legal repercussions.

For instance, selling purses generated from cuts of an original print design fabric reconfigured to make a new design could potentially breach the author’s moral rights. Selling a keyring incorporating a luxury handbag fastener could infringe a registered design. Selling caps or hats made from vintage scarves bearing distinctive logos and iconography could infringe copyright. Marketing watch straps reworked from strips of branded handbags could infringe registered trade marks, contravene Australian consumer protection laws that prohibit misleading conduct, and amount to unlawful passing off. Refashioning an earring wire from pre-loved jewellery items to incorporate an innovative construction could infringe a registered patent.

The use of disclosure statements disclaiming an affiliation with the brand owner, and stating that the upcycled goods are not associated, will not eliminate the risk of IP infringement or the likelihood of consumer confusion.

The dilemma for brand owners

For brand owners, upcycled products represent a unique challenge in balancing their commitment to sustainable practices with the need to protect their highly valuable IP rights. Brand owners’ reputations could be impugned if upcycled products that appear to come from a brand owner do not live up to consumer quality expectations. The wide accessibility of upcycled goods which appear to originate from a brand may diminish their exclusivity appeal. The availability of upcycled garments on the market may divert sales.

Brand owners should consider the following strategies to safeguard the integrity of their brands:

(a) Regularly review trade mark protection

Brand owners should regularly review if there are gaps in their trade mark protection. Except in the case of a well known brand, a repurposed product will only infringe a trade mark if it is used as a trade mark in relation to the same or similar goods and services to those registered. This means the relevant mark is used in a way which represents a connection between the owner of the mark and the product being sold. For example, it may not be possible to take action for infringement against a manufacturer of cushions crafted from designer dresses featuring another brand owner’s logo if cushions and similar goods are not covered under existing trade mark registrations.

(b) Trade mark monitoring

If there is a gap in brand protection, an upcycler could potentially secure their own trade mark rights for goods or services that are not registered. Having trade mark watches in place to detect similar trade marks filed by third parties enables early action to be taken if a trade mark is illegitimately filed.

(c) Authorised upcyclers

Brand owners may look to partner with an authorised upcycler. In these circumstances, establishing a direct licensing arrangement with an upcycler means that the terms of refurbishing, brand consistency, quality and resale can be controlled.

(d) Negotiated outcomes

IP rights owners may wish to triage the cases in which they will take infringement action against an upcycler. Taking an aggressive zero tolerance approach could lead to negative publicity and unfavourable social media backlash in cases where the upcycled products are unlikely to be associated with the IP rights owner or result in economic or reputational loss. It may be desirable to reach a commercial resolution where their IP is licensed, but controlled with some compensation payable.

Final thoughts

The intersection between promoting sustainable practices that reduce waste, and rewarding creations of the mind, presents interesting challenges and opportunities. It may be that the IP legal landscape will eventually move to a place where transformative sustainable uses of IP such as upcycling is permissible if that does not create consumer confusion and is not harmful to an IP rights owner’s creative endeavours.

1. https://lens.monash.edu/@business-economy/2023/05/18/1385768/cost-of-living-squeeze-how-australians-are-changing-their-spending-and-retail-habits