The secondary repair industry and protection of trademarks

Companies havean increasing interest in limiting the ecological footprint of their products.This development is triggered by consumers, who find it increasingly importantto buy environmental friendly and sustainable goods.... [ view full abstract ]

Companies havean increasing interest in limiting the ecological footprint of their products.This development is triggered by consumers, who find it increasingly importantto buy environmental friendly and sustainable goods. There is a growingsecondary repair market, mostly with centralized refurbishment locations. Whichadd transport costs since the products have to be transported to thecentralized recycling location, often the manufacturer. As long as thisrefurbishment is centralized, the manufacturer will not only control the priceof the new product but also the costs of repair. Therefore, competition withinthis market can be beneficial for consumers. One of thechallenges that arise is how to deal with the Intellectual Property Rights(IPRs) of the proprietor. While several issues arise within the field of IPRs,this paper will focus on trademark rights. Companiesdistinguish themselves through the use of trademarks. If you buy a trademarkedproduct, you expect to buy a certain quality. The question that arises with thesecondary repair market is; how can the trademark proprietor still guaranteethis quality if non-authorized repair companies enter the market? Trademarkrights are exhausted the moment they enter a specific market. However, thereare limits to this, especially when changes are made to the goods trademarkproprietors have options to act against the further sale of the goods. Providing thelatest version of goods via refurbishment is only possible if alteration of thegoods is allowed. Trademark laws allow for repairing but only to restore it to itsoriginal conditions. Therefore, alterations or improvements of goods can leadto infringement of the trademark. Circular design focuses on creating productsin a way, which allows updating the product via spare parts instead ofreplacing the whole product. This will only be a success if the updated part iscompatible with previous versions. One of the questions that arise in relationto trademark law; how to inform the consumer that the product is upgraded. Isit enough that repair companies remove the trademark or make known that this isa refurbished product, an upgraded product or, should the secondary repaircompany make sure that the information cannot be removed to protect purchasersdown the line. How should the right of exhaustion and the rights of thetrademark proprietor be balanced.

Keywords: trademark, secondary repair, circular economy