Seeing Red: When It?s a Trademark and When It?s Not

by Orrick, Herrington & Sutcliffe LLP
Contact

[authors: Cornuelle, Kristin S.; Goldman, Beth M.; Lee, Betsy Wang; Richmond, Michael T.]

Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., No. 11-3303-cv, 2012 U.S. App. LEXIS 18663 (2d Cir. Sept. 5, 2012)

Attracting attention in both legal and fashion circles, the Court of Appeals for the Second Circuit reversed the Southern District of New York to rule that a single color can serve as a trademark in the fashion industry.  The court of appeals held that luxury shoe maker Christian Louboutin’s (“Louboutin’s”) celebrated lacquered red sole is protectable as a trademark, but only when it contrasts with the remainder of the shoe.  This decision, rejecting the district court’s blanket rule that a single color cannot function as a trademark in the fashion industry, is welcome news for designers who have created source recognition in their product features.

Facts:

Since 1992, Louboutin has applied red lacquer to the soles of its trendy and high-priced high-heeled shoes.  In 2008, Louboutin obtained a federal registration for the red sole mark, described as “a lacquered red sole on footwear” (the “Red Sole Mark”), and portrayed in the registration as follows:

In 2011, Yves Saint Laurent (“YSL”) prepared to market a line of brightly and uniformly colored high-heeled shoes where even the sole was the same color as the rest of the shoe. One of the colors in the line was bright red with soles colored in a not dissimilar hue to Louboutin’s Red Sole Mark.  In April 2011, Louboutin asked the United States District Court for the Southern District of New York to enjoin the sale of the YSL red shoe (the “YSL Shoe”).  The district court denied the request for a preliminary injunction, holding that because a single color can never be protected as a trademark in the fashion industry, Louboutin’s trademark was not valid and therefore not enforceable. 

The District Court Holding:

The district court’s ruling relied on the functionality doctrine, which states that, “‘a product feature is functional,’ and cannot serve as a trademark, ‘if it is essential to the use or purpose of the article or if it affects the cost or quality of the article,’ that is, if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage.”  Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 165 (1995) (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850, n. 10 (1982)).  The district court held that “[b]ecause in the fashion industry color serves ornamental and aesthetic functions vital to robust competition … Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection.” Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc., 778 F. Supp. 2d 445, 449 (S.D.N.Y. 2011).  The district court further ordered Louboutin to show cause why its registration for the Red Sole Mark should not be cancelled.  Id. at 458.

Louboutin appealed, arguing that the district court erred in holding, based on the doctrine of aesthetic functionality, that a single color on a product in the fashion industry could not act as a trademark and that the Red Sole Mark was thus not entitled to legal protection.

Court of Appeals Decision:

The Court of Appeals for the Second Circuit reversed the district court’s decision, holding unequivocally that, if secondary meaning has been established, a single color can serve as a trademark in the fashion industry.  The court of appeals stated, “the Supreme Court specifically forbade the implementation of a per se rule that would deny protection for the use of a single color as a trademark in a particular industrial context,” and noted that the district court wrongly “created just such a rule.”  Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 2012 U.S. App. LEXIS 18663, at *38 (2d Cir. Sept. 5, 2012) (referencing Qualitex, 514 U.S. at 161).  The court of appeals then went on to evaluate whether the Red Sole Mark actually merited protection.

For a mark to be protectable, it must be distinctive.  But distinctiveness can either be inherent or acquired.  While a single color in the fashion industry—or in any other industry for that matter—cannot be inherently distinctive (Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 210-11 (2000)), there is no reason a single color cannot acquire distinctiveness.  Therefore, the lacquered red sole can serve as a trademark only to the extent that it has acquired distinctiveness.

The court of appeals found that Louboutin had established secondary meaning in the marketplace, but only when the red sole contrasts with the remainder of the shoe.  The court of appeals therefore limited Louboutin’s trademark rights and its registration “to only those situations in which the red lacquered outer sole contrasts in color with the adjoining ‘upper’ of the shoe.”  Louboutin, 2012 U.S. App. LEXIS 18663, at *54.  As the YSL Shoe was all red, with no contrasting sole, the court of appeals ruled that it could not be an infringing use of the Red Sole Mark.  Therefore, the court of appeals affirmed the district court’s denial of Louboutin’s request for a preliminary injunction.

Aesthetic Functionality:

The court of appeals provided an in-depth discussion of aesthetic functionality—the doctrine that even when a design feature such as a color is not functional in the traditional, utilitarian sense (i.e., it is neither “essential to the use or purpose” nor “affects the cost or quality” of the product at issue), it may still be aesthetically functional, and therefore ineligible for trademark protection, “where protection of the mark significantly undermines competitors’ ability to compete in the relevant market.”  Louboutin, 2012 U.S. App. LEXIS 18663, at *35.  The court of appeals rejected the notion that the red lacquered sole was aesthetically functional, noting this is a highly fact-specific determination, requiring careful weighing of “the competitive benefits of protecting the source-identifying aspects of a mark against the competitive costs of precluding competitors from using the feature.” Id. at *36 (citing Fabrication Enters., Inc. v. Hygenic Corp., 64 F.3d 53, 59 (2d Cir. 1995)).  The court warned against finding that a mark’s very success as a source indicator defeats the owner’s right to protect it.

Observations:

Though its request for a preliminary injunction was denied, Louboutin should be pleased that its rights in the Red Sole Mark are still intact, except for those limited situations where the red sole does not contrast with the rest of the shoe.  Also, fashion designers—and others—who claim trademark rights in a single color will welcome the Second Circuit’s confirmation that such protection is possible.  However, the question remains as to how far Louboutin’s trademark rights can be extended.  Would a dark pink or orange lacquered sole be deemed to cause dilution or be deemed confusingly similar?  We will have to wait and see how court rulings like the one in Louboutin will impact intellectual property protection—and innovation—in the fashion industry in the years to come.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick, Herrington & Sutcliffe LLP | Attorney Advertising

Written by:

Orrick, Herrington & Sutcliffe LLP
Contact
more
less

Orrick, Herrington & Sutcliffe LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!