Reworked Goods and Brand Owners: A Lesson from Chanel and Nike

  • May 06, 2021
  • Alessia Monastero

Upcycled and reworked fashion has always been on trend, but has never quite been as popular as it has over the last year. With a global pandemic keeping most at home, many fashion entrepreneurs, designers, and artists have seized the opportunity to spend more time perfecting their craft. And with e-commerce being pushed to the forefront of retail - consider Shopify's partnership with TikTok and Pinterest, or Etsy’s accelerated growth with an added 23 million buyers since the end of 2019 - the ability to make, sell, or purchase reworked clothing has become increasingly accessible. While upcycled garments continue to serve as an artistic outlet and sustainable alternative to the apparel industry's massive waste problem, what does reworked fashion mean for trademark and IP owners?

Reworked Fashion: What is it?

Reworked fashion refers to vintage or used clothing, jewellery, footwear, or other apparel, that has been redesigned and repurposed into a new garment. While the materials of recycled clothing must be broken down before they can be reused, upcycled clothing brands use whole pieces of existing garments to create a new product. As a result, many established brands that have invested in the protection of their intellectual property may be less than keen to see their logos, designs, and other distinguishing elements reworked into a new piece of apparel.

Chanel: If you want to be original, be ready to be copied 

On February 12, 2021, Chanel filed a complaint with the United States District Court of New York against accessories company Shiver + Duke for using authentic Chanel buttons from the brand’s garments and repurposing them into jewellery pieces. Chanel argues that Shiver + Duke’s unauthorized misappropriation of its “world famous and federally registered CC Monogram trademark [...] to create and market costume jewellery” trades off of the goodwill that Chanel has created in its mark through decades of use and millions of dollars in investments.

Though Shiver + Duke has added markings on the back of its CC monogram buttons to indicate that the jewellery is created and designed by Shiver + Duke, as well as included disclaimers on its product packaging that the jewellery is “reworked” and an “original design of Shiver + Duke made from authentic buttons”, Chanel argues that such modifications do nothing to prevent consumers from mistakenly believing that the jewellery is authorized by Chanel. Further, regardless of the disclaimers, tags, or markings, Chanel asserts that the mark most prominently displayed on Shiver + Duke’s jewellery still belongs to and identifies Chanel as the source of the products. Chanel is seeking a permanent injunction to bar Shiver + Duke from manufacturing, advertising, and selling any products using the Chanel trademark “or any simulation, reproduction, copy, colorable imitation or confusingly similar variation of the CHANEL marks”, as well as monetary damages. 

Nike: Just Stop It 

Just over a month after Chanel’s lawsuit, Nike filed a complaint against the art collective, MSCHF Product Studio (MSCHF), creator of the Lil Nas X “Satan Shoes”. Nike accuses MSCHF of trademark infringement with respect to the 666 pairs of sold out modified Nike sneakers that they created, noting that the Satan Shoes prominently feature Nike’s famous Swoosh logo. More significantly, however, Nike argues that through the release of this shoe, it has suffered significant harm to its goodwill, with consumers believing that Nike is endorsing satanism, and social media users threatening to boycott the brand. 

In its complaint, Nike asks the court to order MSCHF to “permanently stop” fulfilling orders for the unauthorized Lil Nas X Satan Shoe. Just a week later, Nike settled the lawsuit, with MSCHF issuing a voluntary recall for the Satan Shoes and buying back all the sneakers.

Balancing the Interests of Rights Holders with the Resale of Repurposed Goods

Both cases raise an interesting discussion regarding the extent of trademark holders’ rights as they relate to the fashion resale market. While the US Doctrine of First Sale generally holds that a trademark owner cannot prevent the resale of goods that it has already released into the market, this doctrine assumes that the resold product is not “materially different” from the original. With trademark owners investing so heavily in their brand, another’s use of the mark, even on a redesigned product, may very well trade on the goodwill of the trademark owner. At the same time, policies that favour and give expansive control to trademark owners could also harm consumers and disincentivize competition and innovation. 

Though fashion has no rules, it is clear that balancing the interests of rights holders and the creators of reworked apparel will continue to encourage a modern analysis of intellectual property rights in the resale market. 

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