Christian Louboutin has been handed a loss in a legal battle over its red sole trademark in Japan. After filing suit against Eizo Collection Co., Ltd., alleging that the Japanese footwear company was infringing its red sole trademark and thus, running afoul of unfair competition law by selling red soled shoes of its own – albeit without the affiliation of or authorization from the famed French brand, the Tokyo District Court sided with Eizo on the basis that Louboutin lacks robust rights in the red sole trademark in Japan, and beyond that, consumers are unlikely to confuse the two companies’ offerings. 

In a decision dated March 11, the Tokyo District Court dismissed Christian Louboutin’s unfair competition case, determining that the celebrity-favored footwear brand fell short in showing that its red sole trademark maintains the necessary level of secondary meaning to act as a trademark. In order to make its case for acquired distinctiveness, counsel for Louboutin pointed to consistent use of the red sole by the brand in Japan for more than 20 years. At the same time, the brand revealed that it has generated revenues of JPY3.3 billion ($26.33 million) for women’s heels since 2016, alone, and has spent JPY15 million ($120,000) per year to advertise its offerings, namely, red soled heels, in the Japanese market. 

Still yet, Louboutin cited a consumer survey conducted in October 2020, which found that 65 percent of 3,149 interviewees, namely, women between 20 and 50 years old, named Louboutin as the source of a depiction of a high heel shoe with a red sole. (The court ultimately took issue with this survey given that the pool of surveyed individuals was primarily limited to luxury shoppers, and they were not shown a photo of the Eizo’s footwear, only Louboutin’s.)

Louboutin Trademark

Unpersuaded by this evidence, the Tokyo District Court found that the color red “has been commonly used on shoes [in the Japanese market] to enhance the aesthetic appearance and attract consumers,” according to Osaka-based trademark attorney Masaki Mikami, holding that women’s heels with red-colored soles “have been widely distributed even before the launch of Louboutin shoes in Japan.” The court also determined that the two decades of use and the advertisements relied upon by Louboutin “would be insufficient to find [its] red soles have played a role as a source indicator in Japan.”

Even if the court were to find that Louboutin has rights in the single-color red sole mark, it still would not prevail in the unfair competition case at hand, as consumers are not likely to confuse its footwear with Eizo’s offerings. A few factors weigh against Louboutin on this front, according to the court. Primarily, there is the level of sophistication of consumers/the level of attention they are paying to such purchases. Considering that Louboutin’s offerings generally come with price tags of $700 or more, relevant consumers are likely to pay a fair amount of attention in the purchasing process, the court stated. 

Louboutin Trademark

Also weighing against confusion, the court noted that Louboutin’s red soles have the brand’s name adorned on them, and the same goes for EIZO’s footwear, which bears the “EIZO” name on the soles. And still, the court found that the two companies’ shoe soles, themselves, are visually quite different, with Louboutin’s consisting of red lacquered soles and Eizo’s being red rubber, which serves to further decrease the chance that consumers might be confused as to the source of the Eizo shoes and/or believe they are in some way affiliated with Louboutin. 

With the foregoing in mind, the court dismissed Louboutin’s unfair competition complaint, refusing to fashion any of the remedies that it was seeking, including monetary damages, injunctive relief to bar Eizo from continuing to offer up red sole heels, and a court order requiring Eizo to deliver the red soled heels in its possession to Louboutin for destruction. 

The loss for Louboutin comes as the brand’s 2015 application to register the red sole as a position trademark on women’s high-heeled shoes has been pending before the Japan Patent Office due to “a lack of inherent and acquired distinctiveness.” Brands have struggled to secure protection for single color marks in Japan. For some larger context, all of the color marks that have been registered by the JPO to date consist of more than two colors, with the national trademark body refusing to register a single color as a trademark as of now.

Hermès is angling to overturn a finding of the Japanese trademark body, which determined earlier this year that the combination of orange and brown that can be found on Hermès’ product packaging is not necessarily an indicator of the brand. In a filing lodged with the Appeals Division of the Japan Patent Office (“JPO”) this fall, the nearly 185-year-old French luxury goods brand is arguing in favor of the registration of its specific orange and brown hues as a trademark for use on product packaging for cosmetics, jewelry, leather goods, and retailer services, among other goods/services, on the basis that consumers in Japan do, in fact, associate the famed two-color combination with a single source: its brand, thereby, enabling the orange and brown combo to operate as a trademark.

The appeal from Hermès follows from its unsuccessful argument that the combination of orange and brown on product packaging has acquired distinctiveness in the minds of relevant consumers, making it so that they associate the colored product packaging with the Hermès brand. In furtherance of its argument, counsel for Hermès stated that the brand has been consistently using the color combination on its product packaging in Japan since the 1960s and cited survey evidence that it conducted among “high-income men and women in their 30s to 50s” with incomes of JPY10,000,000 ($87,951.91) and above that shows that a portion of consumers link the colored packaging to the Hermès brand.

The Hermès survey revealed that 36.9 percent of the individuals pointed to the Hermès brand when they were shown three boxes in different shapes all bearing the orange and brown color mark. Meanwhile, 43.1 percent identified Hermès as the source when shown ten different box options in the trademark colors.

Reflecting on Hermès’ survey, an examining attorney for the JPO was not convinced that the results are “persuasive to support acquired distinctiveness among relevant consumers of the goods and services in question,” namely because Hermès limited the pool exclusively to high-income individuals. In addition to stating that the survey should have been applied to a pool of consumers with a broader range of incomes, the JPO examiner determined that “even among high-income consumers, more than half of them did not link the color to Hermès.” Based on Hermès’ survey, Osaka-based trademark attorney Masaki Mikami notes that “it is doubtful if relevant consumers would conceive the color per se as a source indicator.” 

With the foregoing in mind, the JPO examiner refused to register the mark.

This is not the first time that Hermès – or other brands – have faced pushback from the JPO over color-centric trademarks. The JPO has registered “trademarks of multiple colors” in the wake of an April 2017 enactment of a revision to the Trademark Act of Japan to allow for marks that consist exclusively of colors to be registered, according to Kimura & Partners attorney Takaaki Kimura. And in speaking about the registerability of colors at the time of the law’s revision, the JPO’s trademarks division director Sunao Sato said that this “new type of trademark is expected to play a major role in corporate brand strategy as a means of disseminating various brands” as opposed to simply via word marks or logos. 

Since then, the JPO has issued registrations for a number of other color-centric marks – from Sumitomo Mitsui Financial Group’s dual greens to the color scheme of Mitsubishi Pencil’s maroon “UNI” pencil, complete with a black band. Yet, despite the change in law and a few subsequent registrations, there appears to be a larger trend in rejections of color marks, with the JPO taking the stance that many of these marks “lack distinctiveness and [the applicants fail] to demonstrate acquired distinctiveness.” For instance, the JPO previously objected to an application filed by Hermès for a three-color combination mark for use in Classes 14 (jewelry), 18 (leather goods), and 25 (clothing). Meanwhile, Christian Louboutin has similarly faced opposition in Japan in its quest to register its famed red sole trademark.

A further indication of the difficulty that brands are having when it comes to amassing color-specific trademark registrations in Japan? The strikingly slim success rate for color applications.

Mr. Mikami has told TFL that as of November 15, 2020, 543 applications for color marks were filed with the JPO. As for the number of those applications that have resulted in registration: a mere eight, which makes for a 1.5 percent “success rate.” He further notes that this trend, which has seen the eight existing color registrations issued exclusively to large companies, may “imply that the JPO considers color marks to be unavailable for registration without enormous investment” by the filing party, which means that “smaller companies and startups cannot take advantage of color marks as a branding tool at all, contrary to other traditional and non-traditional trademarks, e.g. name, shape, logo (design), position, motion.” 

Stuart Semple is looking to #FreeTiffany. In order to “liberate” Tiffany & Co.’s signature hue, the British artist created a “super flat matte high-grade shade” acrylic paint that mimics the stalwart New York-based jewelry brand’s robin’s-egg blue, and recently offered 150 ml tubes of it for sale on his e-commerce site for $28, all of which have since sold out. The aim of the project? To make “this once unattainable color” available to “all artists to use in their creations.” Speaking to his desire to take on Tiffany’s blue, Semple states on his website that “the iconic Tiffany Blue was created by Charles Tiffany and John Young in 1837, and is a trademarked color that needs a license to use it.” While “many corporations have trademarked colors, like T-Mobile’s Magenta or Coca Cola’s Red,” what Semple says “makes Tiffany Blue different is that its trademark is across all uses since 1998, and they have even hidden the Pantone code.” 

Semple’s Tiffany-specific venture – and in particular, the language that he uses to describe the project – is thought-provoking, and provides an opportunity to dive into the bid by brands to monopolize colors for the purpose of their specific offerings and oftentimes, their marketing. It is important to note, of course, that such language largely overstates the rights that Tiffany & Co. actually maintains in the specific blue hue (and the rights that brands can reasonably expect to have in a color mark).

While Semple asserts that “the iconic Tiffany Blue has been held tight in the Tiffany & Co. grasp” because the LVMH-owned jewelry company holds trademark rights “across all uses since 1998,” that is not necessarily true based both on how trademark rights are amassed in the U.S. and how Tiffany & Co. is actually using the blue hue. “In the U.S., it is possible under certain circumstances to register a color as a trademark,” trademark attorney and former U.S. Patent and Trademark Office (“USPTO”) trademark examiner Dana Dickson wrote in a recent post. After all, in Qualitex Co. v. Jacobson Prods. Co., a landmark case that centered on the protect ability of the green-gold color of Qualitex’s dry cleaning press pads, the Supreme Court explicitly stated that a color can be registered as a trademark, as long as it identifies a single source for the products/services at issue.

In short: an individual color can be legally protected as a mark, assuming that the use of the color is non-functional and that the brand at issue can establish that consumers have come to associate the color with a single source rather than merely with the products or services themselves.

Tiffany Blue
Examples of color marks (via Cowan)

Not exactly an effortless endeavor, Cowan, Liebowitz & Latman attorney Dasha Chestukhin has noted that “acquired distinctiveness (also called ‘secondary meaning’) can be extremely difficult to establish” when it comes to colors, since “generally color takes some time to be recognized as a source indicator. However, establishing the requisite level of distinctiveness is not impossible. Christian Louboutin, for instance, maintains valuable trademark rights in Pantone 18-1663TP for use on the soles of contrasting-colored shoes. Cartier enjoys rights in a different shade of red for use on certain product packaging, namely, tied to its sale of jewelry; Hermès has trademark rights in its specific “shade of the color orange” for use on packaging in connection with the sale of ready-to-wear, leather goods, and other products; and even Glossier has claimed rights in some specific uses of millennial pink … just to name a few examples. 

Yet, even if a brand can amass such rights and corresponding trademark registrations, that is “not a blanket permission to use that color on any object in any way and to prevent anyone else from using that color in any way,” Dickson states, further asserting that the USPTO has been clear that “color marks are marks that consist solely of one or more colors used on particular objects.” Or – in other words, “The registration is not for the color in the abstract (used on anything and everything to indicate the source of all imaginable goods and services),” and instead, such protections only extend to: “(1) use of the color on a particular object, [and] (2) for the purpose of identifying the source of only the goods/services indicated in the [party’s trademark] application” and/or registration. 

A quick overview of the trademark registrations that Tiffany & Co. does – and does not have – in the U.S. is telling in terms of how it is using and describing its marks. In lieu of a registration for a simple color swatch, for instance, the company has registrations for word marks, such as “Tiffany Blue,” which it uses in connection with “jewelry featuring the color blue as an integral component of the jewelry,” and “Tiffany Blue Box” for use on jewelry. As for its other color-centric marks, Tiffany has a multi-class registration for “a shade of blue often referred to as Robin’s Egg Blue which is used on boxes” in connection with the sale of jewelry, fragrance products, certain leather goods, tableware, and stationary, among other things, as well as related retail store services. 

Tiffany also has registrations for the use of its blue hue on “jewelry pouches with drawstrings” in the class of goods that extends to “jewelry” (i.e., Class 14); on shopping bags – again in connection with the sale of certain categories of goods; in connection with retail store and mail order catalog services featuring jewelry, among other things; and on metal fasteners for use on non-metal key rings. 

Tiffany Blue post

Put simply, while Tiffany & Co. may maintain registrations for an array of uses of its blue, they are all specific – and relatively narrowly defined – and in fact, ultimately, the company’s rights are limited to the uses that it actually and consistently makes of the color, as trademark rights are born and maintained as a result of actual use of the mark and not by virtue of being issued registrations by the USPTO. As such, Tiffany is likely not standing in the way of artists using its blue hue or similar versions of the color for their work, assuming such work does not cause confusion among consumers as to any potential involvement by or affiliation with Tiffany & Co.

Still yet, it is also worth noting that based on court dockets in the U.S., Tiffany does not appear to abuse the rights that it has in its blue, and in fact, is not overly litigious, seemingly reserving the trademark lawsuits that it has initiated in recent years to fights against outright counterfeiters, such as the operators of websites like besttiffanyco.com, and Costco., which it famously sued in February 2013 for offering up non-Tiffany & Co. created rings with signage that described the rings as “Tiffany,” thereby, giving rise to consumer confusion. 

Against this background, brands would be wise to take Semple’s claim that “it’s ILLEGAL for you to use [Tiffany blue] because it’s trademarked in every category” – and the notion that a trademark holder can actually enjoy such sweeping rights in a color – with a grain of salt, and focus any color-centric branding efforts on the reality that color marks are, in fact, protectable, but apply to specific goods/services, and are often relatively narrow in scope.

Hardly Semple’s first foray into taking famous hues and turning them into paint for purchase, he has made headlines in recent years after “making the blackest black paint and ink you can buy as revenge against Anish Kapoor’s control of the coveted Vantablack,” as DesignTaxi put it this week. The move followed from news back in 2014 that artist Anish Kapoor acquired the exclusive license to use Vantablack, the super-black military-grade coating, from patent owner Surrey NanoSystems. “Kapoor’s decision to withhold the material from fellow artists has sparked outrage across the international artists community,” Artnet reported at the time. Semple, included. He followed this up by making what he called the “pinkest pink,” and banning Kapoor from using it. 

On the heels of Executive Vice President of Product and Communications Alexandre Arnault revealing on Instagram this weekend that the April Fool’s joke that saw Tiffany & Co. adopt a vibrant new hue in place of its time-tested robin’s egg blue, the famed jewelry company has revealed that it will swap in that same bold yellow color on select stores across the globe over the coming year. In the first step of what appears to be an inherently social media-friendly extension of its widely-shared prank last month, the brand “temporarily remodeled its Rodeo Drive location – with yellow furniture, fixtures and, for the first time, a yellow Tiffany & Co. box and shopping bag,” according to WWD. Also in the mix for the pop-up: a photo booth and the display of a collection of yellow diamonds, including the nearly 130 karat “Tiffany Yellow Diamond.” 

Apparently looking to parlay the viral level of engagement that followed from its April Fool’s Day stunt (consumers have seemingly very strong opinions about the idea of playing with the famed jewelry giant’s longstanding blue hue) into a broader marketing campaign, and seemingly an ode to the social media savvy of 29-year-old Mr. Arnault, who took an executive role at the fabled jewelry stalwart early this year after Tiffany & Co. joined the LVMH Moet Hennessy Louis Vuitton’s sweeping arsenal of luxury brands, the New York-based jeweler revealed that it will adopt a similar concept at different “global locations, which will soon be determined.”

THE BROAD VIEW: The recent reveal from Tiffany & Co. is certainly a move to target and draw in younger, digitally-connected consumers. As Reuters reported in Janaury, the younger Mr. Arnault, the son of LVMH scion Bernard Arnault – who “helped LVMH acquire luggage maker Rimowa and gave it a hipster edge [during his tenure as] CEO there, through collaborations with Dior that made it sexy for the runway” – told Tiffany & Co. employees during a town hall shortly after his appointment that “he would focus on advertising campaigns and luring young customers.”

The temporary color change is also, of course, a clear example of LVMH’s plan to revamp the 184-year old Tiffany brand, including by way of overhauling its expansive lineup of offerings, redesigning some of its stores, and giving its marketing efforts a makeover.

Beyond that, these store-specific Tiffany events are likely aimed at helping the brand to tempt consumers back into brick-and-mortar outposts in the wake of longstanding COVID-19 lockdowns and a striking rise in e-commerce sales, something that many brands – from luxury names to resale retailers like The RealReal, the latter of which is readily expanding its physical retail footprint – are aiming to achieve. While vaccine roll-outs are prompting consumers to venture out more, they are “unlikely to go back to their old ways of shopping,” Dr. Michael Ketzenberg and Dr. M. Serkan Akturk recently wrote, thereby putting the impetus on brands “to stay relevant in the post-pandemic world.”

With that in mind, brands and retailers need to “facilitate better retail experiences” in order to engage consumers in a post-pandemic capacity, according to Gensler Gensler architect and lifestyle leader Michael Gatti, whether that be through “engaging and creative in-store experience,” for instance, or by way of the introduction of an expanded range of products. As of now, Tiffany is opting for the former.

Is it a trademark infringement to advertise, offer and/or stock and ship goods that bear a sign identical or similar to another’s registered trademark without that party’s authorization? The answer is not a difficult one to determine: These activities amount to prima facie infringement under Articles 10 TMD and 9 EUTMR. Things get more complicated, however, when the same question is asked in reference to an online marketplace, such as Amazon. Can an entity like Amazon be considered as playing an active role – and be directly liable for trademark infringement – if the product that is being promoted, sold, stocked and shipped by way of its platform and corresponding services is a counterfeit?

This is the key issue at the heart of an ongoing case initiated by Christian Louboutin (Louboutin, C-148/21) that was recently referred to the Court of Justice of the European Union (“CJEU”). The referral, which came in March by way of Tribunal d’arrondissement in Luxembourg, was made in the context of proceedings that Louboutin – the holder of the famous red (Pantone 18-1663TP) sole trademark – filed against a number of Amazon entities, including Amazon EU Sàrl, over third-party listings of counterfeit shoes on its third-party marketplace platform, and the stocking and delivery of these goods by Amazon through its corresponding Fulfilment by Amazon program.

The referral is important for two main reasons: First, because national litigation has given contrasting answers to the question of whether an online marketplace, such as Amazon, may bear direct liability for trademark infringement in relation to third-party listings; and secondly, because to date, the CJEU has not explicitly gone as far as holding that the operators of an online platform may be directly liable for trademark infringement together with users of its services. Against this background, the situation appears to be different from copyright, for instance, where the direct liability of platform operators for infringing activities has been well established, first, by the CJEU in its Pirate Bay decision and has since been “codified.” (Although, we will know more about the latter when the CJEU releases its YouTube/Cyando judgment next month). 

Louboutin … Again

Back in August 2019, just months after Louboutin waged its suit against Amazon, a ground-breaking decision was issued in Belgium, with the President of the Brussels Companies Court holding that Amazon was directly liable for the infringement of Louboutin’s red sole trademark. Specifically, the court determined that Amazon could be held liable for the use of the red sole mark in third-party advertisements for counterfeit goods that were displayed on Amazon’s marketplace. The display of such ads constituted direct infringement by the platform itself, according to the court, as did the subsequent shipment of such items by Amazon through its Fulfillment by Amazon venture. 

The decision was partially reversed on appeal in June 2020, with the Brussels Court of Appeal ruling that while Amazon was not liable for ads for third-parties’ products, it was on the hook for ads promoting its own products. In regards to the services that fall under its Fulfillment by Amazon program, the appeals court applied previous CJEU determinations – including the high court’s decision in the Coty Germany GmbH v Amazon Services Europe Sàrl case (which was the most recent judgment at the time) – and ruled out any direct liability on the part of the $1.6 trillion retail titan.

The Non-Liability of Online Marketplaces

In the Coty v. Amazon case, the CJEU limited itself to answering the question referred by Germany’s Federal Court of Justice: “Does a person who, on behalf of a third party, stores goods which infringe [another’s] trademark rights, without having knowledge of that infringement, stock those goods for the purpose of offering them or put them on the market, if it is not that person himself but rather the third party alone which intends to offer the goods or putting them on the market?” 

In that case, the court held that the answer is no, but what is more interesting than the ruling, itself, is the previously-issued Opinion of Advocate General Campos in which he considered that if a platform actively contributes to the distribution of infringing goods, then it should be concluded that such a platform (at least) stocks those goods within the meaning of Article 9(3)(b) EUTMR. As such, it would be irrelevant whether the platform has knowledge – or awareness – of the infringing nature of the goods sold by its users, as long as it could be reasonably expected the platform operator to act to detect such infringing activity.

AG Campos lamented the lack of information provided regarding the relevant factual scenario in the background proceedings: in a context like the one described by the referring court, Amazon would not stock goods for sale within the meaning of Article 9(3)(b) EUTMR. However, based on the parties’ observations and the hearing, the reality might be that Fulfillment by Amazon is more complex than how the referring court indicated: the model could actually be characterized as an “integrated store” in connection with which Amazon plays an active role in the selling process. 

The corollary would, thus, be that Amazon has absolute control over the process.

Within the Fulfillment by Amazon program, the Amazon-affiliated companies, such as its logistics partners, do not merely stock and transport the goods in a neutral fashion. Rather, they undertake a much broader range of activities, including preparing the goods for delivery and delivering them; carrying out advertising and promotional activities; providing information to customers in the process; and handling the refunds of faulty goods. Still yet, Amazon also takes payment for the goods sold, which it then transfers to the seller’s bank account.

AG Campos concluded that in such a context, Amazon would be playing an active role, and thus, be directly liable for infringing activities, having satisfied the requirements under the proviso. Importantly (and correctly), he also noted that, in the event that Amazon was found directly liable for trademark infringement, the safe harbor in Article 14 of the E-commerce Directive would not apply. This is nothing new, the Advocate General asserted, noting that this point was clarified by the CJEU in its 2011 decision in L’Oréal SA v. eBay International

With the foregoing in mind, the new Louboutin referral to the CJEU is one to watch. The resulting judgment will not only be meaningful for the brand and its enduring fight against fakes (one that dates back to the headline-making case that it filed against Yves Saint Laurent in a New York federal court in 2011), it may help shed further light on the thorny question of how far the services provided to sellers by an online marketplace, such as Amazon, can go without translating to infringement liability. 

Even if no specific question is asked on this point, it would be a welcome clarification on the side of the CJEU to address whether a platform that does directly undertake trademark-restricted acts may, nonetheless, remain eligible for the hosting safe harbor. This is particularly important considering the ongoing discussion around the proposed Digital Services Act, which has been presented as a “crystallization” of CJEU case law: on the one hand, the Proposal refers the safe harbor protection to “any type of liability” (recital 17); on the other hand, it excludes the applicability thereof to “any service that is not an intermediary service” (Article 1(4)). 

Eleonora Rosati is Professor of Intellectual Property Law and Director of the Institute for Intellectual Property and Market Law (IFIM) at Stockholm University. (This article was initially published by IPKat).