Exceeding first-sale rights doesn’t block repair or upcycling now – courts determined that if modifications are disclosed, it doesn’t cause consumer confusion

Thankfully for the artists and mechanics who satisfy a genuine consumer interest in modifying purchased goods, there is a legal rebuttal to a case of exceeding first-sale rights. If the modifier clearly discloses the nature of the alteration and the fact that the trademark owner is not a sponsor, courts generally will not find confusion.[166] The Supreme Court’s decision in Prestonettes supports this principle by identifying as a key factor in its finding the defendant’s efforts to clarify that its repackaging and compounding of the perfumed powder were not conducted by the trademark owner.[167] The Court found that clear disclosure of the defendant’s modification activity was enough to avoid purchaser confusion.[168] Subsequent cases agree that disclosure about the nature and source of alteration can cure initial confusion, averting liability.[169] Most important is the Supreme Court’s 1947 decision in Champion Spark Plug Co. v. Sanders, which involved a company that sold reconditioned Champion spark plugs with a denotation that they were “repaired.”[170] The Court refused to enjoin the seller, noting that the fact that the modification was clearly stamped on boxes and individual items prevented consumers from attributing any inferiority in the reconditioned product to Champion.[171] According to the Court, even though the second-hand dealer may benefit from association with the trademark, “that is wholly permissible so long as the manufacturer is not identified with the inferior qualities of the product resulting from wear and tear or the reconditioning by the dealer. Full disclosure gives the manufacturer all the protection to which he is entitled.”[172] Essentially, the direct fact that a rational consumer will not be confused helps to extend first-sale protections.[173]