Case(s): Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., No. 11-3303 (2d Cir. 2013).

Facts: Christian Louboutin, S.A., a renowned footwear brand based in Paris, has produced luxury footwear, the vast majority of which features a bright-red lacquered outsole. Louboutin applied to register the red sole (the “Red Sole Trademark”) and was granted federal registration in 2008. Three years later, in 2011, Yves Saint Laurent (“YSL”), an iconic Paris-based fashion house, released a collection of monochrome footwear in various colors, including red. YSL’s Tribute, Tribtoo, Palais and Woodstock styles consisted of monochrome coloring (i.e. red sole, red shoe; purple sole, purple shoe).

On the heels of the release of the YSL collection, Louboutin filed a trademark infringement lawsuit against YSL in April 2011 in the U.S. District Court for the Southern District of New York. Louboutin asserted that YSL was liable under the Lanham Act for claims including trademark infringement and counterfeiting, false designation of origin, unfair competition, and trademark dilution, in connection with Louboutin’s federal registration for the Red Sole Trademark. Louboutin sought, among other things, a preliminary injunction preventing YSL from marketing its own red monochrome shoes or any other shoe incorporating Louboutin’s Red Sole Trademark.

In response, YSL filed a counterclaim, seeking to have the court cancel Louboutin’s Red Sole Trademark, on that grounds that it lacked distinctiveness and/or was merely ornamental or functional, thereby making it ineligible for trademark protection.

District Court

After an expedited discovery process, District Judge Victor Marrero denied Louboutin’s motion for a preliminary injunction, finding that Louboutin had failed to establish that there was a likelihood of success on the merits of its claims primarily because “single-color marks are inherently ‘functional’ and that any such registered trademark [including Louboutin’s Red Sole Trademark] would likely be held invalid.”

Court of Appeals

Louboutin filed to appeal the district court’s decision.

The Second Circuit Court of Appeals reversed Judge Marrero’s finding, asserting, instead, that the fashion industry was “excepted” from the Supreme Court’s holding on the protectability of a single color and thereby denied trademark protection to Louboutin’s Red Sole Trademark for contrasting red lacquered soles.  The Second Circuit affirmed the district court’s denial to enjoin YSL from selling monochrome red shoes with red soles.

Analysis: The Second Circuit faced three key inquiries.  First, was the district court correct in holding that single-color marks could never receive trademark protection due to the argument of functionality? Second, if single-color marks could be protected under the umbrella of trademark law, did Louboutin’s Red Sole Trademark merit protection? Third, if Louboutin’s Red Sole Trademark was protected, did YSL’s monochrome shoes infringe that mark?

The Second Circuit primarily focused on whether YSL’s affirmative defense of functionality rendered Louboutin’s Red Sole Trademark incapable of trademark protection due to the principal that functional features of goods may not be protected. Citing Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995), the Second Circuit noted that “the Supreme Court specifically forbade the implementation of a per se rule that would deny protection for the use of a single color as a trademark in a particular industry—including the fashion industry—because an analysis of functionality necessarily requires an individualized fact-based inquiry into the nature of the trademark.” (Finnegan).

Next, the Second Circuit turned its attention to whether Louboutin’s Red Sole Trademark warranted protection as a distinctive mark that had acquired secondary meaning in the mind of the consuming public.  The court of appeals found that Louboutin’s Red Sole Trademark was certainly not inherently distinctive, as according to Qualitex, “a single color, standing alone, could almost never be inherently distinctive because such marks do not automatically tell a customer that it refers to a brand, but rather, over time, customers come to treat a particular product color as signifying a unique source.” (Finnegan).

In the absence of inherent distinctiveness, the court focused on whether the Red Sole Trademark had achieved secondary meaning, considering several types of evidence, including consumer surveys, Louboutin’s advertising expenditures, unsolicited media coverage, and worldwide sales for footwear bearing the Red Sole Trademark. With this in mind, the court found that the Red Sole Trademark had, in fact, acquired secondary meaning.

However, despite its finding of secondary meaning, the appeals court noted “Louboutin’s failure to show that the secondary meaning of its Red Sole Mark extended to uses in which the sole did not contrast with the upper part of a shoe (i.e., on monochromatic red shoes).  For example, of the hundreds of pictures of Louboutin shoes submitted to the district court, only four were monochrome red.  YSL, on the other hand, had produced evidence of its sale of monochromatic red shoes, as well as other monochromatic colored shoes since the 1970’s.” Finnegan).

Based on this evidence, the Second Circuit ordered the U.S. Patent and Trademark Office to limit Louboutin’s Red Sole Trademark to only those situations in which the red lacquered outsole contrasts in color with the adjoining “upper” of the shoe, finding that the Red Sole Trademark was valid and enforceable only as modified.

Conclusion: “This case is one of the few appellate court decisions addressing whether a single color is capable of functioning as a trademark, and more specifically how fashion-industry participants may protect the distinctive features of their designs by establishing secondary meaning, even if the distinguishing feature is just one color.” (Finnegan).