BREAKING NEWS: Appeal's Court decision sees Louboutin's red soles triumphant (sort of)

The AmeriKat snuggly asleep moments before
the IPKat wakens her with news of
the Louboutin judgment

The AmeriKat was fast asleep in bed just now when her BlackBerry started vibrating off her bedside table with news that the long awaited judgment from the Second Circuit Court of Appeals in the Louboutin v Yves Saint Laurent case has just been published.  The decision has overturned in part District Judge Marrero's earlier decision on whether Louboutin could use its trade mark red lacquered sole to prevent the sale of Yves Saint Laurent's red-soled red shoe.

In April last year, Christian Louboutin – famous for his signature and US trade marked red- lacquered soled high end women’s footwear – sued Yves Saint Laurent for trade mark infringement.  YSL sold a completely red shoe as part of its Tribute, Tribtoo, Palais and Woodstock models which featured monochrome coloring (i.e. red sole, red shoe; purple sole, purple shoe). In a much criticized decision, District Judge Marrero denied Louboutin’s request for an injunction preventing YSL’s sale of the shoe.  In the US colors per se can be registered as a trade mark if they have acquired a secondary meaning and if they are non-functional. That is to say that if a color acts as a symbol that distinguishes a brand's goods and identifies their source, without serving any other significant function, then the mark is capable of being registered. A defendant can argue that a registered mark is functional as a defence to trade mark infringement.

Louboutin's trade mark
red-sole

In denying Louboutin's request for an injunction against YSL, the judge held that a single colour such as the “colour red” without limitation was too broad and inconsistent with the trade mark registration system established by the Lanham Act.  Judge Marrero’s decision caused a fashion frenzy in the fashion and trade mark spheres, inciting an expected appeal from Louboutin as well as amicus briefs from INTA (amicus brief here) and Tiffany (amicus brief here).  The briefs argued that the judge’s blanket rule that use of a single color on any “fashion item” was not protectable was not supported by previous caselaw and would create a dangerous precedent for the fashion industry even in cases where a single colour has acquired secondary meaning.  As predicted by the AmeriKat, each party’s respective commercial interests demanded that they continue fighting – YSL would not wish to limit their future collections by agreeing to never using monochrome red shoes, nor would Louboutin wish to leave the litigation with a critical court decision in respect of their trade mark registration hanging over their heads.  Therefore last December, YSL responded to Louboutin’s appeal and oral argument in the case was heard in the early part of this year by the Second Circuit Court of Appeals.  

The Chinese red on the sole of a Louboutin
shoe is only protectable if on a contrasting
upper sole - so would this be "contrasting"
enough?  

The 31-page decision of the Appeals Court, issued today, held that the District Court erred in holding that a single color could never serve as a trade mark in the fashion industry.  Such a decision was at odds with the Supreme Court's decision in Qualitex v Jacobson (1995) which held that a single color can be a valid trade mark "where the color has attained 'secondary meaning' and therefore identifies and distinguishes a particular brand (and thus indicates its 'source')". The Court ruled that Louboutin's trade mark had acquired secondary meaning but that pusuant to section 1119 of the Lanham Act the Court instructed the USPTO to limit Louboutin's red sole trade mark to uses which the red sole contrasted with the remainder of the shoe - with that limitation the trade mark would be entitled to protection. Because YSL's shoe was a monochrome experience, the Appeals Court affirmed Judge Marrero's order insofar as it also declined to prohibit the use of red lacquered soles "in all situations", but denied his order that "purported to deny trade mark protection to Louboutin's use of contrasting red lacquered soles". 

 Writing the judgement, Circuit Judge Jose Cabranes  stated that:

"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.” Inwood Labs., 456 U.S. at 851 n.11; see also Mana Prods., Inc., 65 F.3d at 1071 (“In light of the Supreme Court’s decision in Qualitex, color is today capable of obtaining trademark status in the same manner that a descriptive mark satisfies the statutory definition of a trademark, by acting as a symbol and attaining secondary meaning.”). . . 

Circuit Judge Cabranes

In light of the evidence in the record, including extensive consumer surveys submitted by both parties during the preliminary injunction proceedings, and of the factual findings of the District Court, we think it plain that Louboutin’s marketing efforts have created what the able district judge described as “a . . . brand with worldwide recognition,” Louboutin, 778 F. Supp. 2d at 448. By placing the color red “in [a] context [that] seems unusual,” Qualitex, 514 U.S. at 162, and deliberately tying that color to his product, Louboutin has created an identifying mark firmly associated with his brand which, “to those in the know,” “instantly” denotes his shoes’ source, Louboutin, 778 F. Supp. 2d at 448. These findings of fact by the District Court in addressing a motion for a preliminary injunction are not clearly erroneous. We hold that the lacquered red outsole, as applied to a shoe with an “upper” of a different color, has “come to identify and distinguish” the Louboutin brand, Qualitex, 514 U.S. at 163, and is therefore a distinctive symbol that qualifies for trademark protection.  

We further hold that the record fails to demonstrate that the secondary meaning of the Red Sole Mark extends to uses in which the sole does not contrast with the upper―in other words, when a red sole is used on a monochromatic red shoe. As the District Court observed, “[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.” Louboutin, 778 F. Supp. 2d at 448 (emphasis added)). As clearly suggested by the District Court, it is the contrast between the sole and the upper that causes the sole to “pop,” and to distinguish its creator.  

The evidentiary record further demonstrates that the Louboutin mark is closely associated with contrast. For example, Pinault, the chief executive of YSL’s parent company, wrote that the “distinctive signature” of the Mark is in its “contrast with the general presentation of the [shoe], particularly its upper.” Joint App’x 529. Of the hundreds of pictures of Louboutin shoes submitted to the District Court, only four were monochrome red. Compare id. 19, 415, 438, 587 (depicting monochrome Louboutin shoes), with id. 415–27, 431–47, 593–653, 680–724 (photographs and news articles depicting Louboutin shoes). And 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. We conclude, based upon the record before us, that Louboutin has not established secondary meaning in an application of a red sole to a red shoe, but only where the red sole contrasts with the “upper” of the shoe. The use of a red lacquer on the outsole of a red shoe of the same color is not a use of the Red Sole Mark. "

Louboutin (l) and one of the offending YSL shoes (r)

So Louboutin has avoided what would have otherwise been a complete disaster had the appeals court made a complete finding of invalidity of the Louboutin red-sole mark, while Yves Saint Laurent maintains their position that they should not be prevented from marketing a monochrome red shoe - the key factual issue that the AmeriKat considered would be important to court in determining whether YSL's shoes infringed Louboutin's mark.  David Bernstein (Debvoise & Plimpton) who acted on behalf of Yves Saint Laurent declared:

"We are happy to have achieved a victory in defending against Louboutin's lawsuit.  YSL will continue to produce monochromatic shoes with red outsoles, as it has done since the 1970s."

Harley Lewin (McCarter & English) for Louboutin stated that they considered the decision to be "a significant win, not only for Louboutin, but for the fashion industry in general".  Like the AmeriKat will be doing over the next few days, Lewin will also be "carefully study[ing]" the section of the ruling dealing with the distinction between monochromatic shoes and contrasting shoes and what it means for color trade marks in the fashion industry.  

But before she does, the AmeriKat is going back to bed.....

Lououtin sees red with Yves Saint Laurent (published 10 April 2011) (here)

Christian Louboutin: a (red) sole proprietor speaks (published 11 April 2011) (here, here and here)
Tiffany is blue for Louboutin's red soles  (published 14 November 2011) (here)

Law professors side with Yves Saint Laurent in Louboutin battle (published 9 January 2012) (here)