Sole survivor

I have been remiss — among many other things I have been — for not reporting on the result in the Louboutin vs. YSL “red sole” appeal in the Second Circuit.  (Matthew Brozik guest-posted about the District Court opinion here.)

There is some advantage, however, to remissness:  Often other people, often highly-qualified ones, have already done the heavy lifting.  First, an initial summary from IP Katter Annsley Merelle Ward:

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 judgment, 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 inQualitex, 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.”). . .

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”

Good.  There’s a lot more at the post.  Moving back to domestic shores, none is more qualified to opine and analyze than Steve Baird, who set out the following at his redoubtable Duets Blog:

Lessons Learned for Marketing Types:

• Single color trademarks may be owned, registered, and protected when they are distinctive and have acquired “secondary meaning” — even in the fashion industry.
• Know the inherent or implied limitations in your non-traditional trademark rights and registrations, they may become express limitations when a court gets involved.
• Adopt an intelligent enforcement strategy, especially when it comes to non-traditional trademarks, since there can be a judicial undercurrent of skepticism about the validity of those rights and serious questions about whether granting the requested relief will significantly hinder competition in the relevant market.
• If you own the particular placement and position of a non-traditional trademark on an item,don’t assume it is broad enough to stop all uses across the entire surface of an item.
• While non-traditional trademarks are a wonderful way for brand owners to emotionally engage their consumers and cement strong relationships, it must not be forgotten that your competitors have the same options before them, making critical the need for appropriate due diligence when designing even purely ornamental and aesthetic features of a product.
• Consistent with the importance of adopting an intelligent enforcement strategy, as Catlan wrote last week, pick your enforcement targets carefully, and I’d add: pick your forum carefully, as there continues to be “forum shopping” opportunities given the different legal interpretations of the Lanham Act followed by various courts around the country.

Further Thoughts for Trademark Types:

• While I’m all in favor of formally narrowing the scope of Louboutin’s federal trademark registration to make express the limitation and requirement of visual contrast between the red outsole and the remaining elements of women’s high fashion shoes (a limitation I had argued was implied, given the specimen of record), I’m left wondering whether the direction to the USPTO to implement the limitation under Section 37 of the Lanham Act (15 U.S.C. 1119) should have come from the U.S. District Court, not the Court of Appeals.

Great stuff, and there’s a lot more of it; this post should be bookmarked.

Now let’s get mean.  That can only mean Rebecca Tushnet and, of course, Mike Masnick.  First, Rebecca:

I’m not terribly surprised the court of appeals dodged the functionality issue by holding that Louboutin’s trademark rights were limited to contrasting colors, but it’s notable just how many contradictions the court has to swallow in doing so.  In particular, the decision apparently resurrects the concept of “use as a mark,” but not in any explicitly defined or justified way.

The sleight of hand starts with the question presented, as the court frames it: “whether a single color may serve as a legally protected trademark in the fashion industry and, in particular, as the mark for a particular style of high fashion women’s footwear.”  Formally, the court’s answer is yes, it can—except not here!  Because, we will discover, Louboutin doesn’t have a valid registration for a single color; it has a valid registration for a color contrast.  Qualitex, on which the court of appeals relies to hold that single-color trademarks must be allowed, is thus somewhat beside the point. . . .

The court also dropped a footnote about efforts to increase US protection for fashion design, citing various academics (hi, Chris Sprigman!).  Unfortunately, the footnote didn’t stop there:

It is arguable that, in the particular circumstances of this case, the more appropriate vehicle for the protection of the Red Sole Mark would have been copyright rather than trademark.  See generally Kieselstein-Cord v. Accessories by Pearl, Inc., 632 F.2d 989, 993–94 (2d Cir. 1980) (addressing the broad issue of aesthetically functional copyrights and holding that decorative belt buckles that were used principally for ornamentation could be copyrighted because the primary ornamental aspect of the buckles was conceptually separate from their subsidiary utilitarian function); Laura A. Heymann, The Trademark/Copyright Divide, 60 SMU L. Rev. 55 (2007).

Ed. rant: Oh, for pete’s sake.  This is a ridiculous footnote inserted without any consideration of the actual effect on the namechecked doctrine or any opportunity for the parties to point out what’s dumb about this statement.  The idea that a color or even a color contrast could make a utilitarian article copyrightable (because that’s what has to be contemplated in order to make this aside relevant—not the shape of the shoe or the shape of the sole, though claims to those would be wrong too) is nuttier than anything the district court or either of the parties claimed.  I trust that Louboutin won’t burden the Copyright Office with rejecting an attempt to register a work that consists of the red sole of a shoe, contrasting or not.

While the court admits that “aesthetic function and branding success can sometimes be difficult to distinguish” you’d think it would be careful not to overprotect, but the court comes down on the other side here, mainly because it says Louboutin’s red soles have created a “distinctive” mark that identifies such shoes as Louboutin’s. While I can see where the argument comes from, precluding other designers from offering red soled shoes seems pretty excessive.

So much of what’s wrong with trademark law is that we have hard questions like this and don’t really know the answers in advance — far more, it seems, than is the case respecting novel questions of commercial law — yet businesses and fortunes may rise and fall on the ability of lawyers to guess how a court will essentially make policy in trademark law.  Isn’t that a problem?

Or am I just being that carpenter in whose eyes every challenge is merely a nail, or not one?  After all, is it any better, or isn’t it a lot worse, that no one really knows whether two airliners slamming into two twin skyscrapers within minutes of each other is one insurable “occurrences,” or alternatively two of them until something that evil is conceived and executed?

Are commercial cases like that the exceptions that prove the rule?  They may be.  More significantly, in the area of tort law, we do not expect to find shocking results unrelated to shocking behavior.  In such cases, the outcome may have been unclear, but only because a defendant surprised by the imposition of liability has — whether on the advice of counsel or otherwise — tried to do something that is not hard to recognize as “not a good thing,” and guessed wrong about whether the law would let them get away with it.

In trademark law, however, companies and individuals routinely bet the farm on legal analyses and weighing of risks which, if flawed (or if just made in the wrong place), could be catastrophic, yet where the behavior complained of is usually not of particularly compelling moral consequence.

I know the response to that, though, because I’ve certainly dealt with both designers and their attorneys:

No consequence?  Why, I invented the red-bottom-of-a-shoe!  I invested millions in making it famous!  Everyone who sees it knows it is me, me, me!

Like I said.

I do think something is wrong here.  But I don’t think it’s going to change any time soon.

Originally posted 2012-09-19 14:27:31. Republished by Blog Post Promoter