EP’s Louboutin Decision Opens the Door for U.S. Businesses to Protect Their Color/Shape Brands in Europe
In a recent, game changing decision, European Union’s highest court (EU High Court) has ruled that Christian Louboutin’s famous red sole shoes are eligible for protection as a trademark. This article discussed the significance of the decision and the opportunity it provides U.S. fashion designers to promote and protect their color brands in the European Union. This has been a fashionable topic of discussion for our lawyers in Los Angeles.
Background of the Decision
Following its court victory in the U.S. in 2012, Christian Louboutin, best known for its red soled, high heeled women’s shoes, has succeeded in its second major court effort over the past decade, this time in the EU, to obtain trademark protection for its red-sole design. These two decisions put Louboutin well on its way toward its goal of gaining world-wide recognition and protection for its signature mark. It has been a long and challenging path, including false starts and legal misfires, but one, which may well contain lessons for American businesses and their counsel, who seek to establish their own color brands in the Europe.
Christian Louboutin first introduced its red soled shoes in 1992 but did not seek registration protection for its mark for the better part of a decade. Finally, in 2001, Louboutin filed a trademark application in the U.S., Ser. No. 76,261,832, for the design shown below. This first application described the claimed mark as “shoe sole color of red” and did not show or describe the mark by reference to or contrasting with the upper part of the shoe. Louboutin’s first U.S. application was based on and took priority from a prior French filing. According to the USPTO file, Louboutin’s first application was abandoned in Nov. 2002 for failure to respond to an office action.
Louboutin waited another five years to make its second attempt at obtaining U.S. trademark registration for its red sole mark. The second filing in the U.S, Ser. No. 79,030,715, which was filed in 2006 and issued in 2008, was also based on a prior French registration. Once again, the submitted color drawing, shown below, depicted an all red shoe sole, without the contrasting upper part of the shoe, and sought to broadly claim the color “red.”
After an inquiry from the trademark examiner as to the position of the claimed color on the claimed products, Louboutin amended the mark description in this application to claim, “the color red appears in the design representing a stylized red shoe.”
Louboutin and its legal team may have finally recognized the shortcomings of the earlier efforts at obtaining trademark registration. In 2007, in its third attempt at U.S. trademark registration, Louboutin submitted drawings which showed the mark as it was actually used on the product, by depicting a 3D drawing of a high heeled shoe, with a red sole clearly identified. Other than the sole, the remainder portions of the shoe were shown in dashed line, indicating they were not part of the claimed mark. The application described the claimed mark as “a lacquered red sole on footwear” and narrowly described the goods as: “Women’s high fashion designer footwear.” This application issued as Reg. No. 3,361,597 on Jan. 1, 2008.
Louboutin’s U.S. Enforcement
Louboutin’s first major attempt at enforcing its trademark in the U.S. occurred in 2011, shortly after Yves Saint Laurent (YSL), another famous French fashion designer, introduced its red shoe design to the market. Louboutin brought suit in a New York federal court, claiming that YSL had infringed its 2008 registered U.S. trademark. YSL responded by seeking cancellation of the Louboutin mark based on alleged functionality of the mark.
By way of legal backdrop to the case, under U.S. Supreme Court precedent in Qualitex, decided in 1995, color alone can be protectable as a trademark, “when that color has attained ‘secondary meaning’ and therefore identifies and distinguishes a particular brand (and thus indicates its ‘source’).” However, according to Qualitex, color that is determined to be “functional” is not eligible for trademark protection. In that regard, the U.S. Supreme Court identified two categories of functionality: “utilitarian” and “aesthetic.” The utilitarian test for functionality inquiries into whether the subject color is essential to the use or purpose of the product or affects the cost or quality of the product. The aesthetically functional test asks whether exclusive use of the color at issue would put a competitor at a significant non-reputation-related disadvantage.
In the lower court, the New York federal district court ruled against Louboutin. The court, while acknowledging U.S. Supreme Court precedent in Qualitex, ruling that color is eligible for trademark protection, found that color marks in the fashion industry are pre-se non-protectable because of their “aesthetic functionality.” The judge explained this carved out exception for the fashion industry based on the industry’s particular requirements in terms of choice and competitiveness.
Louboutin appealed the adverse district court decision to the second circuit court of appeals, arguing that the lower court has misinterpreted and misapplied Supreme Court precedent. The court of appeal agreed and reversed the district court decision on the basis that it was inconsistent with the Supreme Court decision in Qualitex. The court of appeal found that Louboutin’s red sole mark was valid, provided that the trademark description be narrowed to “a red lacquered outsole on footwear that contrasts with the color of the adjoining (“upper”) portion of the shoe. The dotted lines are not part of the mark but are intended only to show placement of the mark.”
This decision firmly established Louboutin’s trademark rights in its red soled shoes in the U.S.
Louboutin’s Enforcement Efforts in Europe
Louboutin’s efforts at obtaining trademark recognition and protection for its red sole in Europe have faced more challenges and setbacks than its corresponding U.S. efforts. This is so despite the fact that both U.S. and EU have adopted very similar definitions of a trademark. As in the U.S., trademark in the EU is defined broadly as “any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the good and services of one undertaking from those of other undertakings.” As in the U.S., functional marks are not protectable. Thus under EU trademark law, signs which consist exclusively of: (i) the shape which results from the nature of the goods themselves; (ii) the shape of goods which is necessary to obtain a technical result; (iii) the shape which gives substantial value to the goods, are not protectable.
A core difference between U.S. and EU trademark laws lies in underlying requirements for acquiring legal rights in a mark. In the U.S., federal trademark rights are acquired by use of the mark in trade and commerce rather than by registration. To be sure, registration in the U.S. does provide the owner of a mark with broader, more robust legal protections, including nationwide geographic coverage for the mark, presumption of validity and ownership, and right to seek statutory damages and attorneys’ fees in the event of an infringement suit. However, the underlying rights in a mark are obtained by use. In fact, obtaining federal registration in the U.S. is not possible without a showing that the mark is being used in trade and commerce. In contrast, trademark rights in Europe are acquired through registration, not through use.
As pointed out above, despite the fact that it had first introduced its red soled shoes in 1992, Louboutin did not seek trademark registration for its red sole shoe design in Europe until 2000. That first attempted mark (No. 3067674), discussed above, depicted a two-dimensional red sole, without the contrasting upper part of the shoe. In 2008, Louboutin sought to enforce that trademark against Zara, a French company which sold its own red soled shoes. Zara responded to the lawsuit by counterclaiming for cancellation of the Louboutin registration based on it not being “clear, precise, self-contained, easily accessible, intelligible, durable and objective.” The lower French court issued a decision in favor of Louboutin and Zara appealed. In Zara, the French court of appeal reversed the lower court’s decision and ruled that Louboutin’s mark was unenforceable because the mark sought to be protected was not “clear, precise, self- contained, easily accessible, intelligible, durable and objective.”
The litigation leading to the recent decision of the EU High Court was based on the trademark application, which Louboutin had filed in Europe in 2009, which issued in 2010. That application was identical to the three-dimensional mark Louboutin had filed in the U.S. in 2007 and successfully enforced in the U.S. in 2012. In 2013 Louboutin initiated legal proceedings in a Netherland district court against Van Haren, a Dutch company whose retail stores were selling high-heeled shoes with red soles. When the lower Dutch court ruled in favor of Louboutin, Van Haren appealed the decision on the basis that the mark at issue was invalid based on aesthetic functionality. Van Haren argued that the Louboutin mark was objectionable for “consisting solely of a shape which results from the nature of the goods, which gives a substantial value to the goods or which is necessary to obtain a technical result.” The Dutch court referred the matter to the EU High Court for a ruling on this issue.
The issue faced by the EU High Court was whether shape and color of Louboutin’s mark could be separated under the circumstances; i.e., whether color applied to the sole of a high-heeled shoe is essentially a “shape” mark within the meaning of the EU trademark law. The EU High Court sought to answer that question by reference to the following factors: 1) the usual meaning of the applicable terms and phrases in everyday language, 2) the context for the mark at issue, and 3) the purposes of the applicable trademark rules.
The EU High Court found in favor of Louboutin, pointing out that Louboutin did not seek to protect a particular shape, but the application of a color to a specific part of a high heeled shoe. The EU High Court thus concluded that Louboutin’s red sole mark cannot be regarded as consisting ‘exclusively’ of a shape because the main aspect of the mark is a specific color applied to a specific part of a high-heeled shoe.
Lessons from Louboutin for U.S. Businesses Seeking to Protect Color Marks
Louboutin’s long and winding road to gaining recognition and successful enforcement of its red sole mark in the U.S. and in Europe provides valuable lessons and a valuable opportunity for U.S. businesses who seek protection for their color marks in the U.S. and in Europe.
First, applicants should resist the impulse of overbroad descriptions of their color marks and instead should define their color marks succinctly and narrowly as used on the actual product in a manner that highlights the subject color as a source identifier.
Second, owners of marks should seek trademark registration in the U.S. as soon as the mark is first used in U.S. Trademark protection in the EU should be initiated by initiating registration after the mark has been created. Where the color mark is first introduced in the U.S., the corresponding EU registration can take priority from the earlier U.S. filing. Conversely, where the first filing is done in the EU, the U.S. filing can claim priority from the EU filing.
Third, in the U.S., proof of acquired distinctiveness or secondary meaning is required as a condition for obtaining trademark registration for color marks. In Europe, no such evidence is required at the registration stage, but, as noted in the EU High Court decision, such proof is highly valuable at the enforcement stage in the EU.
Fourth, enforcement targets should be carefully chosen. In particular, targeted products need to use the same or a substantially identical mark to the protected mark. Because of natural skepticism of judges in the U.S. and Europe and juries in the U.S. towards color marks, it is important that the target be chosen carefully.
EU High Court’s decision in Louboutin has provided U.S. businesses with a clear opportunity to expand on the promotion and marketing of their products in Europe by designing products that are identifiable by reference to their color.