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Louboutin v. YSL: in the battle for the red-lacquered sole, everyone wins

10:25 08/09/2012

MOSCOW, September 8 - RAPSI, Ingrid Burke. Louboutin’s telltale red lacquered soles are entitled to trademark protection, so long as that protection extends only to contrasting red soles, and not to monochromatic designs. In so deciding, a panel of US federal judges for the Manhattan-based Second Circuit Court of Appeals reversed in part a lower court decision which had centered on the theory that within the fashion industry a single color can never serve as a trademark.

Background

High-fashion shoe and accessory powerhouse Christian Louboutin began painting the soles of the shoes he designed with red lacquer in 1992. He registered the red lacquered soles with the US Patent Trade Office in 2008. The bright red outsole has come to be globally affiliated with Louboutin. As explained by the lower court, “[w]hen Hollywood starlets cross red carpets and high fashion models strut down runways, and heads turn and eyes drop to the celebrities’ feet, lacquered red outsoles on high-heeled, black shoes flaunt a glamorous statement that pops out at once.”

In 2011 fashion house Yves Saint Laurent (YSL) began marketing monochromatic shoes in various colors, including red. Being quite literally monochromatic, the red version featured red outsoles. After out-of-court negotiations fell through, Louboutin sued YSL for trademark infringement in April 2011. In August 2011, the lower court denied Louboutin’s motion for preliminary injunction against trademark infringement because “The District Court, in addressing a difficult and novel issue of trademark law, held that, because a single color can never be protected by trademark in the fashion industry, Louboutin’s trademark was likely not enforceable.  It therefore declined to enter a preliminary injunction to restrain YSL’s alleged use of the mark.”

Distinguishing trademarks from mere marks

Trademark protection serves two major policy goals: consumer convenience and the rights of producers to turn a profit for strong branding. That is, trademark law seeks both to protect the interests of consumers in quickly and easily identifying the source of a given product, and to allow the producer in turn to benefit in financial and reputability terms as a result of this consumer affiliation.

Still, consumer and producer trademark interests should not stifle overarching free market policy goals. As the opinion explains, “trademark law should not be used to ‘inhibit legitimate competition by giving monopoly control to a producer over a useful product.’  Such a monopoly is the realm of patent law or copyright law, which seek to encourage innovation, and not of trademark law, which seeks to preserve a ‘vigorously competitive market’ for the benefit of consumers.”
Accordingly, the validity of a trademark cannot be upheld if its enforcement would be significantly damaging to competitors in a “non-reputation related” sense.
In order to benefit from trademark protection, a mark must be “distinctive,” as opposed to “generic.” Furthermore it must be established that use by competitors of a similar mark would likely cause consumer confusion.

Distinctiveness can be inherent or acquired over time by way of the development of a “secondary meaning” in the public mind. In other words, if the general public comes to recognize a formerly generic mark as indicative of a given brand, a secondary meaning has developed and the distinctiveness requirement has thus been met. In establishing the development of a secondary meaning, such factors as unsolicited media coverage and knockoff attempts are considered.

Functionality as a defense to trademark protection

Even if distinctiveness and the likelihood of consumer confusion have been firmly established, a competitor will prevail against trademark enforcement if he can prove that the given mark is “functional.” That is, if the mark at issue serves a utilitarian or aesthetic function, it cannot be trademark protected. The doctrine of functionality seeks to prevent trademark law from “[inhibiting] legitimate competition by giving monopoly control to a producer over a useful product.”

Utilitarian functionality is established if a mark is “essential to the use or purpose of the article…. or if it affects the cost or quality of the article.”  Normally if a mark meets the utilitarian functionality requirement, it cannot be trademarked.

Aesthetic functionality must be considered in certain cases, however; particularly those rooted in the appearance of a given product. This is obviously a common issue in the fashion industry. In such cases, a finding of aesthetic functionality bars trademark protection of any mark found to be “necessary to compete in the [relevant] market.”

In considering a mark’s aesthetic functionality, a court must carefully balance “the competitive benefits of protecting the [mark’s] source-identifying aspects” against the “competitive costs of precluding competitors from using the feature.”

Trademarking Louboutin’s lacquered red sole

The opinion explained that the lower court erred in essentially establishing a fashion industry-specific per se rule that, “there is something unique about the fashion world that militates against extending trademark protection to a single color.”

To the contrary, the court explained that although distinctiveness can almost never be found in a single color standing alone, a color can certainly acquire secondary meaning: “We see no reason why a single-color mark in the specific context of the fashion industry could not acquire secondary meaning―and therefore serve as a brand or source identifier―if it is used so consistently and prominently by a particular designer that it becomes a symbol, ‘the primary significance’ of which is ‘to identify the source of the product rather than the product itself.’”

The court went on to consider the expansive body of evidence illustrating the fact that fashion aficionados worldwide instantly associate the red outsole with the Louboutin brand.  The opinion explains that, “Louboutin invested substantial amounts of capital building a reputation and good will, as well as promoting and protecting Louboutin’s claim to exclusive ownership of the mark as its signature in women’s high fashion footwear…. And there is no dispute that Louboutin’s efforts were successful ‘to the point where in the high-stakes commercial markets and social circles in which these things matter a great deal, the red outsole became closely associated with Louboutin.’”

 YSL’s Chief Executive Officer even testified to the absolute clarity with which those in the fashion world recognize Louboutin shoes based on the “notoriety” of the distinctive red sole in contrast a given pair’s upper.

However, the court held that this brand affiliation is closely connected with the contrast of the red outsole: “Louboutin’s own consumer surveys show that when consumers were shown the YSL monochrome red shoe, of those consumers who misidentified the pictured shoes as Louboutin-made, nearly every one cited the red sole of the shoe, rather than its general red color.”

Based on all of the above considerations, the court upheld the trademark-protected status of contrasting red-lacquered soles, but denied such status to red monochromatic shoes. Thus in the end everyone wins: Louboutin gets to protect his signature soles (at least as far as US law is concerned), YSL gets to market their monochromatic line, and all is right with the fashion world.

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Louboutin v. YSL: in the battle for the red-lacquered sole, everyone wins

10:25 08/09/2012 Louboutin’s telltale red lacquered soles are entitled to trademark protection, so long as that protection extends only to contrasting red soles, and not to monochromatic designs. In so deciding, a panel of US federal judges for the Manhattan-based Second Circuit Court of Appeals reversed in part a lower court decision which had centered on the theory that within the fashion industry a single color can never serve as a trademark.
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