August/September 2011 Issue

Civil Cases

Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc.,
2011 WL 3505350 (S.D.N.Y. Aug. 10, 2011)

ABSTRACT
The Southern District of New York denied Christian Louboutin S.A.’s (“Louboutin”) request for a preliminary injunction preventing competitor Yves Saint Laurent America, Inc. (“YSL”) from selling monochromatic red shoes that Louboutin claimed infringed on its registered trademark for “a lacquered red sole on footwear.”  Finding that the use of a single color is functional when used in fashion design, the district court denied relief and issued a Show Cause Order requiring Louboutin to show that its federal registration should not be cancelled.

CASE SUMMARY

FACTS
In or around 1992, fashion designer Christian Louboutin began coloring the outsoles of his high-fashion women’s shoes a glossy, vivid red.  By his own account, Louboutin adopted the red sole to provide his shoes “energy” and chose the particular shade of red because he regarded it as “engaging, flirtatious, memorable, and the color of passion,” as well as “sexy.”

Movie stars and other “A-list notables” snapped up the shoes at prices sometimes exceeding $1,000. Louboutin enjoyed phenomenal market success as sales reached 240,000 pairs per year and 2011 revenues were projected to be approximately $135 million.  The U.S. Patent and Trademark Office granted Louboutin a registration covering the red outsole in 2008.

In January 20011, Louboutin complained to YSL that certain models of shoes offered by YSL in its Cruise Collection used monochromatic outsole/upper combinations, including models that were entirely red.  In response, YSL claimed that red outsoles had appeared occasionally in YSL collections as far back as the 1970s, including in YSL’s 2008 Cruise Collection.  YSL refused to withdraw the challenged models and this suit ensued.

ANALYSIS
Both the court and YSL conceded that the bright red outsoles had become closely associated with Louboutin.  The court pointed to copying by competitors and by black marketers as evidence of the notoriety of Louboutin’s design.

Before the court was the issue of “whether the Lanham Act extends protection to a trademark composed of a single color used as an expressive and defining quality of an article of wear produced in the fashion industry.”  The court distinguished the use of a single color in this case from protected fashion-industry marks involving multiple colors combined in distinct patterns or combinations of shades that manifest a conscious effort to design a uniquely identifiable mark embedded in the goods.  As examples, the court cited Louis Vuitton’s multicolored monogram pattern and the Burberry plaid, and also distinguished cases protecting color on industrial products where color is irrelevant to function and serves only to distinguish one product from another (e.g., pink fiberglass and gold/green cleaning pads).

In reasoning that evokes the old color-depletion theory, the court relied heavily on an analogy between the worlds of art and high-fashion design, observing that such creative fields thrive on artistic freedom and fair competition, and that the greatest range for a creative outlet exists when every color of the spectrum is freely available for use.  “The law should not countenance restraints that would interfere with creativity and stifle competition by one designer, while granting another a monopoly invested with the right to exclude use of an ornamental or functional medium necessary for the freest and most productive artistic expression by all engaged in the same enterprise.”

Introducing the concept of aesthetic functionality, the court next observed that in the fashion business, creativity, aesthetics, taste, and seasonal change drive color selection—color is used to advance expressive, ornamental, and aesthetic purposes.  The court focused on Louboutin’s own testimony, where he admitted that he chose the color to give his shoes “energy” and because it is “engaging” as evidence of the color’s “functionality.”  The court also found that the use of lacquered red in particular had an effect on the cost and quality of the finished product in that the process made the shoes more expensive and, as a result, more attractive to its intended customer.

Turning to the ultimate issue, the court asked whether affirming trademark rights for Louboutin’s use of the color red would significantly hinder competition.  It answered in the affirmative for a number of reasons, including (1) that granting one participant a monopoly on the color red would impermissibly hinder competition among other market participants; (2) that such a monopoly would unfairly inhibit achievement of stylistic goals, such as color matching between shoes, garments, and accessories;
(3) that granting a monopoly would create undue uncertainty in the fashion market any time a designer wanted to use the color red; and (4) that finding trademark protection would create additional uncertainty as to where to draw the line when a shade of red is infringing.  On this particular issue, the court pointed out that Louboutin himself could not explain why the red used by YSL in 2011 was confusingly similar while prior uses of red outsoles by YSL were not.

Ultimately, the Court held that protecting a single color on an article of fashion was an invitation to uncertainty, dispute, and more litigation.  “Because in the fashion industry color serves ornamental and aesthetic functions vital to robust competition, the Court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection, even if it has gained enough public recognition in the market to have acquired secondary meaning.”

Finally, the court also strongly hinted that it would order the cancellation of Louboutin’s U.S. trademark registration, but it could not do so at this juncture since no motion for summary judgment was before the court.

Louboutin has already filed an appeal of the district court’s decision, which remains pending before the U.S. Court of Appeals for the Second Circuit.

CONCLUSION
The decision is a bright red flag to anyone seeking to protect color in a design-oriented business, not to mention a reminder that even doing everything correctly in order to establish secondary meaning may not be enough if the court views the relevant product feature as functional.