• Second Circuit Decision Brings A Satisfying Conclusion to Louboutin’s Red Sole Trademark Litigation Dispute with Yves Saint-Laurent
  • December 14, 2012
  • Law Firm: Lee Tsai Partners Attorneys-at-Law - Taipei Office
  • In September, the US Court of Appeals for the Second Circuit reached a decision in the trademark dispute between fashion giants Christian Louboutin and Yves Saint-Laurent (YSL).  Louboutin filed this interlocutory appeal in the wake of the decision reached by the District Court below in August 2011 denying a preliminary injunction against YSL for alleged trademark infringement.  In a decision hailed by both parties as a victory, the Court of Appeals allowed YSL to continue selling its red monochrome shoes, but ruled that Louboutin's mark, as modified, is entitled to trademark protection. 

     

    First introduced in 1992, Louboutin's signature red, lacquered outsole on women's high fashion footwear has become a status symbol for celebrities across the world in recent years.  He filed for trademark protection with the USPTO in early 2007 and was granted the mark in January 2008.  In 2011, YSL was preparing to launch a new line of shoes entirely in one color ¿ including the soles.  Louboutin alleged trademark infringement and negotiated with YSL to remove such shoes from the market.  A brief negotiation failed to resolve the dispute, and Louboutin filed an action for trademark infringement, among other claims, against YSL in the US District Court for the Southern District of New York in April 2011.  At the same time, YSL filed counterclaims against Louboutin seeking to cancel the Red Sole mark.

     

    Under US trademark law, color is protectable as a trademark only if it serves to distinguish and identify the source of the goods without serving any other significant function.  A product feature is “functional” and should not be protected by trademark law if it is essential to the use or purpose of the product, or if it affects the value or quality of the product.  The District Court found that because of the special role aesthetics and creativity play in the fashion industry, single-color marks are inherently “functional” and could not be equated to precedents with single-color marks in other industrial goods.  Consequently, the District Court held that, under the aesthetic function doctrine, Louboutin’s Red Sole mark was most likely ineligible for trademark protection and denied his motion for a preliminary injunction against YSL.

     

    The Court of Appeals disagreed with the District Court’s interpretation that single-color marks could never serve as a trademark in the fashion industry.  First, the aesthetic function doctrine is based on an inquiry of a product feature’s anticompetitive effects; it is not to be confused with successful source indication from a feature on the product.  The analysis to distinguish the two is necessarily heavily fact-specific ¿ whether granting such a mark would significantly undermine the competitors’ ability to compete in the market.  The District Court’s blanket rule prohibiting single-color marks in the fashion industry would have circumvented such fact-based inquiries.  Despite color serving more than mere ornamentation in the fashion industry, it is not an appropriate reason to carve out the balancing test inherent in the aesthetic functionality doctrine.  

     

    Once having disposed of the District Court’s reasoning, the Court of Appeals then turned its attention to the record to review whether Louboutin’s red sole mark has acquired secondary meaning to distinguish itself as a source indicator and thus worthy of trademark protection.  The court noted that there was an abundance of undisputed evidence presented below that Louboutin has successfully associated red sole shoes with his brand in the fashion industry and the general public over the past twenty years.  On the other hand, this “brand recognition” by the public did not extend into shoes with red soles that do not contrast with the upper.  Therefore, the court ruled that Louboutin’s red sole mark is enforceable if modified to only include a lacquered red sole that contrasts with the upper of the shoe, and YSL’s monochrome-colored products do not infringe on Louboutin’s mark. 

     

    While both parties could find relief in the appellate decision, there remains preciously little bright-line guidance on “whether and how single color marks in the fashion world merit trademark protection”.  This is in part because the question on appeal was limited to whether Louboutin’s mark was eligible for protection, and whether YSL’s products would infringe on such a mark, therefore the Court of Appeals did not have to analyze whether the red sole mark was functional or confusing.  The crucial determination was based on the fact that Louboutin's red sole shoes were only recognized when they were contrasting with the rest of the shoe ¿ out of the hundreds of pictures of Louboutin shoes submitted to the record, only four were monochrome red.  In effect, despite all the legal arguments about the use of a single color as a trademark, the analysis by the Court of Appeals matched the general public perception that Louboutin’s brand was never about the color red alone, but how it worked in conjunction with another color.  As a result of this ruling, fashion designers wishing to follow Louboutin’s path on color use may now be steered to emphasize contrast and location to build its brand recognition before seeking trademark protection.