Since 1992, Louboutin painted the outsoles of his women’s high-heeled shows with a high-gloss red lacquer. He registered the mark in the USPTO in 2008 and now the Second Circuit Court of Appeals in New York has held that his red painted outsoles on women’s shoes is a valid trademark distinguishing his shoes from other fashionable footwear. Christian Louboutin S.A. v. Yves Saint Laurent America Holding, Inc., No. 11-33-3-cv. (2nd Cir. September 5, 2012)(available here). The question before the Court was simple: 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. The Appeals Court affirmed the trial court’s denial of a motion for preliminary injunction (a victory for Yves Saint Laurent (“YSL”)) but reversed the lower court’s decision that the red outsoles could never operate as a trademark. However, the Appeals Court seemed to limit Louboutin’s mark to women’s high-heeled shoes with a high-gloss red lacquer stating: The color red is claimed as a feature of the mark and the mark consists of a lacquered red sole on footwear.
“We conclude that a single color can never serve as a trademark in the fashion industry … is inconsistent with the Supreme Court’s decision in Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 162, 115 S. Ct. 1300, 131 L.ED.2d 248 (1995) (“Qualitex”). Louboutin’s trademark, has acquired limited ‘secondary meaning’ as a distinctive symbol … [and] we limit the trademark to red outsole. The trademark as thus modified. Finally, we conclude that, because the monochrome design employed by YSL is not a use of Louboutin’s modified trademark, we need not, and indeed should not, address whether YSL’s use of a red outsole risks consumer confusion or whether the Louboutin mark, as modified, is ‘functional.’”
Yves Saint Laurent (“YSL”) marketed a line of “monochrome” shoes in purple, green, yellow, and red. Louboutin objected to the YSL monochrome red shoes and sued in New York federal court. The District Court had held that, in the fashion industry, single-color marks are inherently “functional” and that any such registered trademark would likely be held invalid. The Appellate Court discussed a test for aesthetic functionality and identified three major elements. “Whether the design feature is either ‘essential to the use or purpose’ or ‘affects the cost or quality’ of the product at issue. Next, if necessary, [the analysis] turn[s] to a third prong, which is the competition inquiry set forth in Qualitex.”
In Qualitex “[t]he ultimate test of aesthetic functionality is whether the recognition of trademark rights [in an aesthetic design feature] would significantly hinder competition.” Qualitex, 514 U.S. at 170 (quoting Restatement (Third) of Unfair Competition § 17, cmt. C, at 176 (1993). The purpose of the functionality defense “is to prevent advances in functional design from being monopolized by the owner of [the mark] in order to encourage competition and the broadest dissemination of useful design features.”
The Court, in limiting Louboutin’s trademark rights to the red lacquered outsoles, recognized the fear in the fashion industry and expressly indicated that ladies shoes, which are entirely and completely red (monochromatic), do not infringe Louboutin’s rights.