Louboutin gets the boot

In a case that has everyone seeing red —

No, let me start over. And without the jokes. Because in a decision in Christian Louboutin S.A. v. Yves Saint Laurent America, Inc. — a case about colored outsoles of high-end ladies’ footwear — the Honorable Victor Marrero of the United States District Court for the Southern District of New York made nearly every color, foot, and/or shoe pun imaginable, and I don’t want to step on His Honor’s toes. (Sorry, that was my last one.)

The factual background, in brief: The plaintiffs are one Christian Louboutin, a fashion designer, and his eponymous companies. Those companies sell, among other things, expensive shoes for women. In or around 1992, Monsieur Louboutin had an idea—he would sell shoes with colored outsoles (that is, the outermost layer of the sole; usually the least interesting part of a shoe). Specifically, he would sell shoes with red outsoles. This was something (arguably) that no one had done before. Over time, those who care about such things/notice the bottoms of shoes came to associate red outsoles with Louboutin. So Louboutin did another smart thing: He applied for federal registration of a trademark, and on January 1, 2008, the PTO granted him Registration no. 3,361,597 for a mark consisting of “a lacquered red sole on footwear.”

Come 2011, and Yves Saint Laurent (the luxury fashion house co-founded in 1962 by… well, French fashion designer Yves Saint Laurent) is selling four styles of shoes, each with colored outsoles. Each model of shoe comes in red (among other colors). But it’s the red that matters, because Louboutin has a registered trademark for a lacquered red sole on footwear. Not a lacquered colored sole on footwear—just a lacquered red sole on footwear. So YSL’s blue, yellow, and other colored-soled shoes are in the clear.

(This is a good point to mention that according to the decision, there is evidence that shoes with red outsoles have appeared occasionally in YSL’s collections dating back to the 1970s. This fact did not matter, but it’s interesting to note. Maybe it would have made a good… yes, footnote.)

Louboutin sued YSL, asserting several causes of action, all of which live or die with the protectability of Louboutin’s claimed mark. (Spoiler alert: They all die.) YSL counterclaimed, most significantly, for cancellation of the PTO registration, arguing that a color for a shoe sole (lacquered or otherwise) can not be protected as a trademark. Louboutin moved for a preliminary injunction, which prompted the court’s early consideration of the merits of the plaintiffs’ claims (and specifically the likelihood of success on the merits thereof). Judge Marrero found Louboutin decidedly unlikely to succeed.

By now, anyone with even passing knowledge of the intersection of trademark law and colors should be shouting, “Qualitex! QUALITEX!” For the seminal decision in the realm of trademark in colors is Qualitex Co. v. Jacobson Prods. Co., which gave us the important and memorable rule that color alone sometimes may be protectable as a trademark, “where that color has attained secondary meaning and therefore identifies and distinguishes a particular brand (and thus indicates its source),” but not where it is functional, meaning that the color is essential to the use or purpose of the product, or affects the cost of quality of the product. In short, color can meet the legal requirements for a trademark if it “act[s] as a symbol that distinguishes a firm’s goods and identifies their source, without serving any other significant function.” Qualitex involved pads used in dry cleaning presses.

The crux of Judge Marrerro’s ruling can be found in this one sentence from the decision: “[W]hatever commercial purposes may support extending trademark protection to a single color for industrial goods do not easily fit the unique characteristics and needs—the creativity, aesthetics, taste, and seasonal change—that define production of articles of fashion.” In the fashion industry, the court notes, “the Lanham Act has been upheld to permit the registration of the use of color in a trademark, but only in distinct patterns or combinations of shades that manifest a conscious effort to design a uniquely identifiable mark embedded in the goods.”

Louboutin himself, the court noted, “has acknowledged significant, nontrademark functions for choosing red for his outsoles. [H]e stated that he chose the color to give his shoe styles ‘energy’ and because it is ‘engaging.’ He has also said that red is ‘sexy’ and ‘attracts men to the women who wear my shoes.’” Judge Marrero observed that the red outsole also “affects the cost of the shoe, although perhaps not in the way Qualitex envisioned. Arguably, adding the red lacquered finish to a plain raw leather sole is more expensive, not less, than producing shoes otherwise identical but without that extra ornamental finish. Yet, for high fashion designers such as Louboutin and YSL, the higher cost of production is desirable because it makes the final creation that much more excusive, and costly.”

Having thus determined that red outsoles served “nontrademark” functions, the court duly “examine[d] whether granting trademark rights for Louboutin’s use of the color red as a brand would ‘significantly hinder competition.’” To suggest that Judge Marrero thought this a no-brainer would be an understatement. “Louboutin’s claim to ‘the color red’ is, without some limitation, overly broad and inconsistent with the scheme of trademark registration established by the Lanham Act.” (Louboutin’s proposal that the court define a range of colors to limit the “red” in the registration at issue was met with some disparagement from the bench. Judge Marrero did not feel that it is for the courts to distinguish between shades of colors, even though they routinely decide difficult questions involving shades of meaning of words, phrases, and symbols.)

In the end, the court denied Louboutin’s motion for preliminary injunction, and Judge Marrero even went so far as to state that when the time was right—that is, when discovery was complete—he would be compelled to grant a motion by YSL for summary judgment on its counterclaim for cancellation of the mark registration (at which point, the court acknowledged, Louboutin will likely take an interlocutory appeal to the Second Circuit… you know, rather than wait for the other shoe to drop).

Originally posted 2011-08-10 21:04:55. Republished by Blog Post Promoter