AGA saga: when upcycling becomes trade mark infringement

With the growing emphasis against throwing away products to be replaced with new ones, upcycling (repairing, adding to or enhancing an existing product) is becoming increasingly common. A recent judgment from the Intellectual Property Enterprise Court has explored whether upcycling constitutes infringement of the original brand. The case demonstrates that the subsequent marketing of the upcycled product needs to be handled with care to avoid straying into infringement.

Background

The defendant had created technology called the “eControl system” that allowed AGA Cookers to be converted to run on electricity rather than solid fuels. The defendant sold the system on its own to be installed in existing AGA cookers and also sold upcycled AGA cookers with the eControl system pre-installed.

The claimant did not object to the sale of the eControl system and also accepted that it was legitimate to refurbish and resell AGA Cookers. However, the claimant objected to the defendant reselling AGA-badged cookers with the eControl system added and the marketing around this, which they alleged constituted trade mark infringement in breach of Section 10 Trade Mark Act 1994 (TMA).

The defendant did not deny use of the claimant’s trade marks, but instead sought to rely on the exhaustion of rights principle. This principle generally prohibits a rightsowner from controlling the onward distribution of their goods after they have been put on the market with the rightsowner’s consent. It is provided for in Section 12(1) TMA. However, if the rightsowner has “legitimate reasons” to oppose further dealings in the goods, then Section 12(1) will not apply and infringement will occur.

Quality issues

The claimant first alleged that it had legitimate reasons to object to the defendant’s activities on the basis that the parts used by the defendant to refurbish the AGA Cookers were of such inferior quality as to risk damage to the AGA brand. The judge was not satisfied that the evidence provided to the court demonstrated this and, in any event, commented that the average consumer considering the purchase of a second-hand AGA Cooker would not necessarily expect that replacement parts would be of equal quality to original ones.

Marketing issues

However, the claimant also alleged that it had legitimate reasons to object to the defendant’s activities because of the way the defendant was marketing the products. On this point the judge accepted that the defendant’s marketing gave customers the impression that there was some commercial connection between them and the upcycled products and the claimant. For example, the judge referred to the defendant’s website which included wording such as “Buy an eControl AGA” and a page offering a range of “AGA colours”. The judge also relied on similar wording on the defendant’s invoices and pointed out that there was no counterstatement on the defendant’s website to dispel the impression of a connection to the claimant. The overall impression was that customers would think the upcycled AGAs originated with AGA itself.

Conclusions

This case does not signal the end of upcycling. The judge usefully commented that the re-sale of AGA-badged cookers with the eControl system installed was not an infringement per se. The judge also said that the attachment of the eControl badge onto a refurbished cooker alongside the existing AGA badge did not constitute infringement of that AGA brand either. So, in that sense, it is good news for the upcycling market.

However, the case also gives comfort to brand owners. It demonstrates that they can exercise some control over the way upcycled products are marketed and, with more cogent evidence, prevent sales where that product becomes sufficiently inferior to the original.

As the judge concluded, the court must strike a fair balance between protecting the trade mark proprietor’s interests in a trade mark that has been applied to goods and protecting the interests of others such as resellers in the aftermarket.

The full case can be found here.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2024