Hot Red Feet

September 25, 2012

Christina M. Licursi
Recently, the U.S. Court of Appeals for the Second Circuit (Appeals Court) released its much-awaited decision in Christian Louboutin SA v Yves Saint Laurent Am Holding Inc., ruling that French designer Christian Louboutin’s distinctive red-soled shoes are entitled to at least limited trademark protection, and reversing a lower court holding that "a single color can never serve as a trademark in the fashion industry." While the decision was a win-win for the fashion industry – as it seemed to please both Louboutin and Yves Saint Laurent (YSL) – it also caught the attention of the trademark world as it shed some much-needed light on the "doctrine of aesthetic functionality."

Earlier this year, in the underlying case, the U.S. District Court for the Southern District of New York denied a motion for a preliminary injunction filed by Christian Louboutin against YSL, holding that Louboutin’s trademark registration for "a lacquered red sole on footwear" was not entitled to protection under the Lanham Act. The pivotal point of Louboutin’s claims revolved around preventing YSL from selling a red shoe with a red sole in its monochrome line.

This recent appellate decision allows YSL to continue to sell its monochromatic shoe with a red sole—the same shoe that Louboutin initially alleged was infringing. Here, the three-judge panel instructed the U.S. Patent and Trademark Office to limit the registration of Louboutin’s "Red Sole Mark" to only those situations in which the red lacquered outsole contrasts in color with the adjoining "upper" of the shoe. However, the Appeals Court also made it clear that 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, a clear victory for Louboutin.

The Appeals Court found that the lower court’s holding that a single color can never serve as a trademark in the fashion industry was inconsistent with the seminal Supreme Court case Qualitex. The Appeals Court found that the Louboutin mark became a "source identifier" since it developed "secondary meaning" – moving from not having trademark significance to becoming a recognized brand. The Court went on to say, "although we determine that the mark as it currently stands is ineligible for protection insofar as it would preclude competitors’ use of red outsoles in all situations, including the monochromatic use now before us, we conclude that the mark has acquired secondary meaning—and thus the requisite ‘distinctiveness’ to merit protection—when used as a red outsole contrasting with the remainder of the shoe."

The lower court’s decision hinged on the aesthetic need of color in the fashion industry. There, the court held that because the lacquered red color was chosen largely for aesthetic appeal and because aesthetic appeal is intrinsic to elements of the fashion industry, Louboutin’s use of color alone was a functional element not entitled to protection. To reach its decision, the lower court distinguished high fashion items from more industrial products (like those at issue in Qualitex) where style—or aesthetics—play a smaller role. However, the Appeals Court disagreed with the lower court’s analysis, and said that the district court’s conclusion that a single color can never serve as a trademark in the fashion industry was based on an incorrect understanding of aesthetic functionality.

Louboutin may have lost the fight against YSL’s monochromatic shoe, but won a much broader battle over the use of its iconic color. Louboutin was clearly pleased with the decision insofar as it rejected the lower court’s adoption that color could never be a trademark in the fashion industry and it found the Louboutin mark strong, valid, and enforceable. YSL may also be happy with the decision since the Appeals Court held that the monochrome design employed by YSL is not a use of Louboutin’s modified trademark.

Besides helping fashionistas keep a favorite look exclusive (and expensive), trademark pundits can be pleased, too, as the decision provided some important insight on the aesthetic functionality. In essence, this decision found that the fashion industry could not be singled out as the one industry in which color could not be trademarked. As a result, Qualitex cannot be read to sanction an industry-specific per se rule of functionality; rather, it requires an individualized, fact-based inquiry into the nature of the trademark to receive protection.