Introduction
Upcycling is often presented as one of the most visible manifestations of the circular economy. By transforming existing objects and giving them a new life, this practice responds to growing environmental concerns and appeals to an increasing number of creators, businesses, and consumers. However, when the transformed objects bear third-party trade marks, particularly luxury brands, the legal issues quickly become complex.
A decision rendered on 21 May 2026 by the Paris Judicial Court in a dispute between Chanel and the French company Kamad Reworked perfectly illustrates these tensions. Beyond the specific facts of the case, the decision forms part of a broader series of rulings issued in France, Switzerland, Singapore, and elsewhere that are gradually shaping the legal contours of upcycling when it intersects with trade mark law.
What Is Upcycling?
Originally emerging from the fields of design and sustainability, the term “upcycling” generally refers to the transformation of an existing object or material in order to give it a new function or a higher value. The concept is attractive: extending the life of a product while reducing waste. Yet the notion remains somewhat elusive. Were all transformed objects genuinely destined for disposal? Can one truly speak of value enhancement when the original product already possessed substantial economic value on the second-hand market?
These questions are far from theoretical. In several recent disputes, the products concerned were neither waste nor low-value items, but luxury goods sought after by collectors and consumers. As a result, some observers may view such practices less as a form of value-enhancing recycling and more as the commercial transformation of existing products. This ambiguity may explain why courts tend to focus on the concrete nature of the operations carried out rather than on the label of “upcycling” itself.
It is precisely within this context that the Paris Judicial Court issued its decision of 21 May 2026 in a dispute between Chanel and the French company Kamad Reworked (Tribunal judiciaire de Paris, 21 mai 2026, RG n° 25/00621).
Jewellery Made from Chanel-Branded Components
In this case, the defendant company, Kamad Reworked, marketed necklaces, bracelets, earrings, and belt chains incorporating charms reproducing Chanel’s famous interlocking double-C monogram, as well as the word signs “Chanel” and “Coco”.
In its defence, the company argued that these components originated from authentic buttons or accessories purchased on the second-hand market and subsequently reused as part of an upcycling process. Each product was presented as an original Kamad Reworked creation and accompanied by a certificate of authenticity stating, among other things, that the company was not affiliated with Chanel.
The court was not persuaded by this argument.
Authenticity of the Components Is Not Enough
The court first observed that no evidence established the precise origin of the charms used. In other words, although Kamad Reworked claimed that the components originated from authentic Chanel products, it failed to provide sufficient evidence tracing their provenance.
This finding already significantly weakened the defence based on the exhaustion of rights doctrine. As a reminder, this mechanism requires that the relevant product has been placed on the market within the European Economic Area by the trade mark owner or with its consent. Failing proof of such origin, the defendant could not rely on this exception.
The most significant aspect of the decision lies elsewhere, however. The court explained that even if the authenticity of the components had been established, the exhaustion defence would still have failed because the Chanel-branded elements had been combined with non-Chanel components to create “an entirely different product”, which could not itself have been placed on the market by or with Chanel’s consent.
This clarification is important. Exhaustion normally permits the resale of a genuine product. It does not necessarily grant the right to dismantle that product, extract certain components, and incorporate them into a new commercial creation. Thus, the transformation of a Chanel button or accessory into an entirely new piece of jewellery constituted a sufficiently significant alteration to preclude the application of exhaustion.
This approach recalls the reasoning adopted by the Court of Justice of the European Union (CJEU) in Art & Allposters International BV v Stichting Pictoright (C-419/13), where the transformation of an artwork reproduction from a poster into a canvas print led the Court to reject exhaustion of the distribution right:
“Article 4(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the rule of exhaustion of the distribution right does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the consent of the copyright holder, has undergone a replacement of its medium, such as the transfer of that reproduction from a paper poster onto canvas, and is placed on the market again in its new form” (CJUE, Art & Allposters International BV c. Stichting Pictoright, 22 janvier 2015, C-419/13, EU:C:2015:27).
Admittedly, the Paris Judicial Court’s decision of 21 May 2026 concerned trade mark law rather than copyright law. Nevertheless, the two cases share a common feature. In Art & Allposters, the CJEU refused to apply exhaustion where the medium of the reproduction had been replaced. In Chanel, the court refused to apply exhaustion where trade mark-bearing components had been incorporated into “an entirely different product”. Without mechanically transposing a copyright solution into trade mark law, both decisions reflect a similar reluctance to extend exhaustion to products that no longer correspond to those originally placed on the market by the rights holder.
This approach is not entirely new under French law. Long before the term “upcycling” entered the legal vocabulary, the French Supreme Court had already dealt with comparable situations. In a decision of 28 January 1992, it held that a company which subjected garments bearing a third party’s trade mark to an “essential modification” altering their nature committed unlawful use of the trade mark because retaining the mark on the modified product could lead consumers to believe that the trade mark owner was responsible for the entire manufacturing process (French Supreme Court, Commercial Chamber, 28 January 1992, No. 90-14.292).
More recently, in Rolex v. Skeleton Concept, the Paris Judicial Court adopted similar reasoning, finding that Rolex watches that had undergone substantial modifications could no longer be regarded as the products initially placed on the market by the trade mark owner. According to the court, “the essential function of guaranteeing the product’s origin to consumers through the trade mark is undermined when the product sold under the original mark has, after being placed on the market, been transformed to the point that its nature has changed”, creating a risk that consumers would “attribute the modified condition of the product to the trade mark owner” (TJ Paris, 12 février 2025, n° 22/09315).
The same logic now appears in several upcycling-related disputes. In Hermès International v. Maison R&C (Paris Judicial Court, 10 April 2025, No. 22/10720), the court held that incorporating fragments of Hermès scarves into denim jackets resulted in the creation of a product distinct from that originally marketed. In a different legal context, the Singapore High Court likewise held that the potential authenticity of the materials used did not transform the disputed products into Louis Vuitton products, as they were in reality new creations distinct from the original articles (Louis Vuitton Malletier v Ng Hoe Seng [2025] SGHC 44).
Although these decisions do not rest upon identical legal grounds, they appear to converge towards the same principle: exhaustion protects the resale of a genuine product, but does not necessarily extend to the commercialisation of a new product resulting from its transformation.
The Chanel Monogram Remains the Dominant Element
Beyond the issue of exhaustion, the judgment also contains a detailed analysis of likelihood of confusion based on CJEU case law.
The court observed that the famous interlocking double-C monogram occupied a dominant position on the jewellery sold by the defendant. For the average consumer, this visual element immediately functions as an indicator of origin associated with Chanel.
The judges further emphasised that Chanel’s trade marks enjoy exceptional reputation in the fashion and accessories sector. In this context, the presence of the monogram on the disputed jewellery naturally leads the public either to attribute the products to Chanel or to believe that an economic connection exists with the luxury house.
The analysis therefore goes beyond the mere reproduction of the signs. It also relies on the reputation of the trade mark and its power of attraction among consumers.
The Ineffectiveness of Disclaimers
As in many similar disputes, the defendant attempted to reduce the risk of confusion through explanatory statements. Product descriptions notably included the following disclaimer:
“When you purchase a creation from our website, you are purchasing a Kamad creation and not a creation from the brand from which the upcycled component originates.”
The court found that this statement did not reduce the likelihood of confusion. It even considered that the disclaimer could increase confusion because it expressly suggested that part of the product indeed originated from Chanel.
This analysis reflects a practical reality frequently encountered in trade mark disputes: a disclaimer does not necessarily eliminate confusion and does not automatically neutralise the impact of a famous trade mark when that mark remains the principal element perceived by consumers.
Certificates of Authenticity Also Condemned
Another noteworthy aspect of the judgment concerns the certificates of authenticity provided to customers. These documents highlighted the supposedly authentic origin of certain elements incorporated into the products offered for sale.
The court considered that issuing such “certificates” constituted a misleading commercial practice. According to the judges, the repeated use of the concepts of “authenticity” and “originality” was liable to convince consumers that the marketing of the products was lawful, whereas it in fact constituted trade mark infringement.
Protecting Investment
Beyond the issue of consumer confusion, the judgment illustrates a well-established trend in European trade mark law. Reputed trade marks are not protected solely against consumer misidentification. They also benefit from protection against harm to their image, prestige, and investment value.
The court noted that Chanel invests hundreds of millions of euros in maintaining the luxury image associated with its trade marks. The use of those signs on products manufactured outside Chanel’s quality standards is capable of diluting that image and diminishing its exclusivity.
This reasoning echoes the CJEU’s case law concerning the investment function of trade marks, which protects the ability of trade mark owners to preserve the reputation and attractive force built through their commercial investments.
Conclusion
The decision of 21 May 2026 confirms that upcycling is not a legal free zone exempt from the traditional rules of intellectual property law. While the creative reuse of existing objects serves legitimate economic and environmental objectives, it nevertheless encounters the rights of trade mark owners when transformed products continue to derive their appeal from distinctive signs belonging to third parties.
The Chanel case forms part of a broader judicial trend extending well beyond the luxury sector. From older decisions concerning the modification of branded products to more recent disputes involving Rolex, Hermès, and Louis Vuitton, courts appear to be converging towards a common principle: exhaustion permits the resale of a genuine product, but does not necessarily authorise its transformation into a new product marketed under the continuing attraction of a renowned trade mark.
As upcycling continues to develop, courts will likely be called upon to further refine the balance between sustainability objectives and the protection of investments made by rights holders.
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