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 decisionand 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).
From the story of how World War II shortages, including those for product packaging supplies, led to the birth and larger rise of Hermès’ famous orange color trademark, and a deep dive into how the famed Christian Louboutin v. Yves Saint Laurent lawsuit saw the parties face off in court and before the court of public opinion … to an enduring legal rivalry between Nike and Skechers – complete with four lawsuits, claims of corporate “bullying,” and an alleged pattern of rampant copying – and a look at how “progressive,” millennial-focused workplaces have tried to keep employees’ discrimination claims quiet, here are several of the features we penned in 2020.
1. A Shortage of Product Packaging During WWII Led to the Birth of Hermès’ Famous Orange Color Mark
In 1942, the city of Paris was rife with shortages. While World War II would be over for the French within a couple of years, the wartime shortages were not winding down. For one company, a then-105-year-old, family-owned leather goods and apparel manufacturer named Hermès, one immediate impact of the enduring scarcity was its inability to acquire its usual product packaging. Neither the creamy beige and gold cardboard boxes nor the rich marigold-hued ones with a shade of bronze running along the corners that it had traditionally used to package its high-end offerings were accessible. The boxes that had “defined Hermès’ elegance” for decades were no longer within its reach.
As the brand’s story goes, the only packaging that was available – and offered up to Hermès by its supplier – came in a vibrant orange, “the color nobody wanted.” Given the option of adopting a bright new hue for its boxes or being left without packaging for its equestrian-centric leather goods and growing businesses of handbags and ready-to-wear, which were first incorporated into the house’s offerings in the 1920s, Hermès chose the former, and “the orange Hermès box was born.”
2. Christian Louboutin: Red Soles, High Heels, and a Global Quest for Trademark Rights
After all, on the receiving end of that complaint was not a fast fashion retailer or a frequently-sued footwear company like Steve Madden. It was a fellow luxury goods brand, and at the heart of the closely-watched lawsuit was Louboutin’s trademark-protected red sole and its allegations that by selling $800-plus red high heeled shoes that also bore a red sole, YSL was infringing its coveted federal trademark registration that Louboutin had maintained since January 2008.
3. Are Birkin Bags Really a Better Investment than Stocks and Gold? One Company is Actively Testing That Theory
Not only is Rally the first company to look to Reg. A+ to sell shares in a Birkin bag; it is arguably the first company to provide an actual basis for testing the enduring speculation that the wildly coveted Birkin bag just might fare more favorably over time than some of the more traditional classes of assets. By offering shares in the bags, Rally – and its co-founders Chris Bruno, who came from the world of venture capital, and Rob Petrozzo, whose background is in product design – is setting the stage to see just how valuable an investment these bags really are from a securities perspective.
The notion that Birkin bags are an investment that is just as attractive as – or possibly, even more attractive than – conventional financial vehicles is not exactly a novel one. In fact, the Rally offering comes four years after Baghunter, an online retailer for luxury handbags, garnered headlines when it made a striking proclamation: Hermès Birkin handbags are a better investment – on an annualized basis – than gold and the stocks in the S&P 500 index.
4. Counterfeits or Control: What is the Real Issue Between Brands and Amazon?
Many brands have sworn off Amazon for the same glaring reason: fakes. The Jeff Bezos-launched e-commerce giant was publicly taken to task in 2016 and again in 2017, for instance, when Birkenstock revealed that it would cut all ties with the company on the basis of “a series of violations of the law on the [Amazon] Marketplace platform.” According to Birkenstock, those legal violations stemmed largely from Amazon’s alleged failure to prevent the offering of counterfeit goods on its sweeping marketplace site.
Yet, while brands and trade groups, alike, seem willing to rally around the assertion that Amazon’s sites are rife with counterfeit or otherwise infringing products, there may be more to the oft-chilly dynamic between the $1 trillion e-commerce empire and third-party brands than that. That is what Amazon’s Vice President of Public Policy Brian Huseman asserted in the 4-page letter he wrote to Acting Assistant U.S. Trade Representative for Innovation and Intellectual Property Daniel Lee in response to the American Apparel and Footwear Association’s quest to get Amazon on the government’s “Notorious Markets” list.
5. LVMH’s Failed Stake Building Effort Resurfaces in Enduring Hermès Family Investigation
Ten years ago, on an otherwise ordinary day in October 2010, news broke that LVMH chairman Bernard Arnault had built up a sizable stake in Hermès. The Paris-based luxury goods conglomerate revealed in a statement, as required by French finance law, that it had acquired a 14.2 percent stake in the then-173-year old Hermès, in which the Puech, Dumas and Guerrands families controlled a 73.4 percent stake. What would come to be revealed in due time was that LVMH’s revelation that day was only the first of several that could be expected, and despite the agreement among “the majority of the Hermès families that Arnault was an unwanted interloper” with no place at their ownership table, LVMH’s notoriously ruthless leader was undeterred.
The deals that enabled Arnault to quietly build up a stake in Hermès would come under the microscope in rival lawsuits that Hermès and LVMH would file against one another in 2012. But after executives for LVMH and Hermès ultimately made peace in court in September 2014, trouble was brewing behind the scenes for the Hermès families, and on the heels of LVMH distributing its Hermès stake in late 2014, Hermès – “sparked by tension in the family after LVMH’s 2010 surprise stake building,” filed a criminal complaint against Nicolas Puech, asserting that the great-great-grandson of Hermès founder Thierry Hermès, and cousin to former Hermès chairman Jean-Louis Dumas, had falsely disclosed that he still owned nearly 6 percent of the company’s stock.
6. Remember “Blanding”? Well, Websites Are All Starting to Look the Same Now, Too
Websites are all starting to look alike. Across all three metrics – color, layout and AI-generated attributes – the average differences between websites peaked between 2008 and 2010, and then decreased between 2010 and 2016. Layout differences decreased the most – declining over 30 percent – in that latter time frame. These findings confirm the aforementioned suspicions that websites are becoming more similar. As for what can be made of this creeping conformity, on one hand, adhering to trends is totally normal in other realms of design, like fashion or architecture. And if designs are becoming more similar because they are using the same libraries, that means they are likely becoming more accessible to the visually impaired, since popular libraries are generally better at conforming to accessibility standards than individual developers. They are also more user-friendly, since new visitors will not have to spend as much time learning how to navigate the site’s pages. These are good things.
On the other hand, the internet is a shared cultural artifact, and its distributed, decentralized nature is what makes it unique. As home pages and fully customizable platforms like NeoPets and MySpace fade into memory, web design may lose much of its power as a form of creative expression. The Mozilla Foundation has argued that consolidation is bad for the “health” of the internet, and the aesthetics of the web could be seen as one element of its well-being.
7. How “Progressive,” Millennial-Focused Workplaces Have Tried to Keep Employees’ Discrimination Claims Quiet
The evolving treatment of non-disclosure agreements – or NDAs – has been particularly striking in the wake of #MeToo. While these common contractual agreements (or confidentiality terms reminiscent of an NDA), continue to find their way into an ever-increasing number of situations – from employment agreements and severance packages to visitor logs at co-working spaces and pre-job interview paperwork, they are not always as sweeping or iron-clad as they may seem. In fact, NDAs and confidentiality terms are frequently limited by law in terms of the subject matter for which they can obligate silence.
8. How Pandemics Past and Present, Fuel the Fall of Small Businesses and the Rise of Mega-Corporations
One of less-often discussed consequences of the Black Death is an important one: the rise of wealthy entrepreneurs and their ventures. Although the Black Death caused short-term losses for Europe’s largest companies, in the long term, these businesses concentrated their assets and gained a greater share of the market, as well as increased influence with governments. This has strong parallels with our current COVID-19 reality. While small companies are being forced to rely upon government support to prevent collapse, others, such as giants like Amazon, are profiting handsomely due to the new trading conditions.
The mid-14th century economy is too removed from the size, speed, and interconnectedness of the modern market to give exact comparisons, but we can certainly see some parallels with the way that the Black Death accelerated the domination of key markets by a handful of mega-corporations, which is likely to ensue in the wake of the COVID-pandemic.
9. As NASA Reintroduces its “Worm” Logo, a Look at the Branding & Re-Branding of the Federal Space Agency
In the late 1950s, a Cleveland Institute of Art graduate named James Modarelli was in the midst of his tenure at the laboratory that would become the National Aeronautics and Space Administration (“NASA”) Glenn Research Center just outside of Cleveland, Ohio. At the time, the then-43 year old National Advisory Committee for Aeronautics was being spun into a new agency, the one that we now know as NASA, and the restructuring called for a change in name and branding. So, the powers that be called on the space agency’s employees to submit designs for a new logo, and that is precisely what Modarelli did.
Inspired by a 1958 visit to the Ames Unitary Plan Wind Tunnel in Mountain View, California, where he was particularly impressed by a model of a radical supersonic airplane, the design of the plane, namely its “cambered, twisted arrow wing,” served as the inspiration behind the design of the official NASA seal and a similar, but less formal, symbol that Modarelli submitted a year later.
10. Four Lawsuits, Corporate “Bullying,” and an Alleged Pattern of Rampant Copying: The History of Nike v. Skechers
In the $62.5 billion-plus global sneaker market, the competition is fierce, the costs associated with the intensive research and development that goes into designing and manufacturing footwear are high, and the revenues that can be generated from single styles collections can race past the $1 billion mark for standouts like Nike’s Flyknits or adidas’ Stan Smith and the Superstar models. This means that the stakes are high amongst the market’s key players, and the chance that litigation will come into play among them is even higher.
Nike and adidas have long made headlines in connection with their history of legal battles, centering on their respective knitted technologies, for instance, which spawned an international battle beginning at the very same time as he London Olympics in 2012, and while there is likely no end in sight to the fights they wage against one another in their quest to outfit consumers across the globe, another rivalry has been spilling over into the courts: Nike versus Skechers.
11. In Order to Operate (More) Sustainably, Brands Need to Do More than Simply Skip Fashion Week
With such an announcement in mind, Saint Laurent is rightfully being praised for being the first big brand to more or less break the traditional cycle in favor of a presumably more measured – and more sustainable – approach. After all, in recent years, sustainability has come to dominate much of the conversation in the industry, as nearly-countless articles have detailed just how unsustainable the bi-annual or quarterly show model – or realistically, even more frequent than that if you count the oft over-the-top pre-season and couture presentations by brands – currently is.
12. From Intangible Assets to Price-Setting Power: What Makes a Brand a Brand?
What makes a brand a brand? That is the interesting – albeit complicated – question that Bernstein’s Bruno Monteyne and Luca Solca set out to answer in a recent client note. In doing so, the analysts consider a handful of other questions, namely, “What differentiates brands from commodities? Why do [brands] make so much money, and what determines how much money they can make?,” and come up with the following assertion: “a brand is a license to tax our emotions and dreams.”
Delving into the definition of a “brand” in a more concrete manner, Monteyne and Solca point to the “big gap between a marketer’s definition of what a brand is and what a brand, instead, appears to be in the … minds of consumers.” On one hand, they say that “marketers have a more factual assessment of brands: specific products and formulations, advertising campaigns over the years, design and logo choices and evolution, ‘story-telling,’ testimonials and representatives, and so on.”
13. Can Bottega Veneta’s Daniel Lee Go Beyond the “It” Bag? Or Better Yet … Does He Need to?
It is a valid question. After all, branching out beyond bags is largely what François-Henri Pinault, the Chairman and CEO of Bottega Veneta’s parent company Kering, and Bottega’s former chief executive officer Claus-Dietrich Lahrs (who has since been succeeded by Bartolomeo Rongone) aimed to achieve when they hired Lee a year and a half ago. As the New York Times’ Vanessa Friedman wrote in February, “In 2018, Mr. Pinault and [Mr.] Lahrs had decided that if the brand were ever to move to the next level, Bottega had to become known not just for leather goods … but also for its ready-to-wear.”
14. World-Famous Trademarks and Millions of Dollars of Counterfeits: A Look at Nike’s Escalating Fight Against Fakes
One new tactic fashioned by the sportswear giant, in particular, started to emerge in 2010, when “Nike [began] approaching licensed U.S. customs brokers and requesting the broker’s assistance to provide it with information regarding a specific (or multiple) shipments,” Deanna Clark-Esposito, an international trade attorney, reported at the time. “In an effort to assist Nike, brokers (naively) handed over information, only to be later ‘thanked’ by Nike in the form of a lawsuit with allegations ‘supported’ by the very papers the broker provided it with.”
15. “Homogenous,” Instagram Apologies Raise Questions About Modern Brands and their “Mission-Centric” Branding
2020 saw no shortage of markedly similar apologies from some of the market’s buzziest brands, making it almost impossible not to wonder whether these utterly-Instagrammable apologies are merely the latest efforts by brands to not only save face (and save their bottom-lines during an already-difficult time) but also to attempt to bolster the often-explicitly “mission” oriented nature of their operations. After all, aside from disrupting the traditional retail model by cutting out the middleman and going all-in on social media content-as-advertising, this morals or ethics-driven approach is a large part of what initially helped to set these companies apart from other, more established market entities.
At the same time, broader expectations about how these companies conduct themselves have also entered into the mix given that they are marketing – and to some extent, profiting from – a larger message of morals, making allegations of racial discrimination and reported attempts to stand in the way of unionization efforts, for example, even more problematic.
From the growing number of trademark applications coming from Off-White for stylized versions of the word “Off” to zip ties and words flanked by quotation marks and Glossier’s successful quests to claim rights in its specific uses of millennial pink to an influx of trademark specimen fraud being faced by the U.S. Patent and Trademark Office (“USPTO”) to the Supreme Court’s decision in the Booking.com case, this year was filled with noteworthy trademark filings, cases, and evolving trends.
Here is a look at some of the interesting developments in the trademark space that we saw in 2020 …
As luxury brands rush to establish face masks as a distinct – revenue-driving – category of accessories, the race to file mask-specific trademark applications has already begun, with applications being lodged with national trademark offices across the globe as early as July, just a month after the World Health Organization published its guidelines suggesting laypeople wear fabric masks and leave the medical-grade masks to the frontline professionals who need them most. (Interestingly, most luxury brands do not already maintain registrations that extend to protective face masks or coverings).
In terms of the impetus behind brands’ quests for registrations, the aim appears to be two-fold. Not only are companies looking to protect the use of their valuable brand names, logos, and in some cases, monogram prints, in connection with their use on face masks and other coverings, they are also presumably looking to up the ante when it comes to damages. With a trademark registration that covers masks in hand, brands will be able to not only bring trademark infringement cases of action, but counterfeiting claims, as well.
The U.S. Court of Appeals for the Second Circuit sided with Costco in the years-long legal battle that it has been ensnared in with Tiffany & Co. In a highly-anticipated decision dated August 17, a 3-judge panel for the Second Circuit held that the U.S. District Court for the Southern District of New York erred in determining on summary judgment that the multi-national warehouse retailer ran afoul of federal trademark law by labeling and selling diamond engagement rings as “Tiffany” rings, and ultimately, requiring Costco to pay a jury-determined $21 million damages sum as a result.
In the decision, Circuit Judge Debra Ann Livingston states that the lower court was wrong to grant Tiffany’s motion for summary judgment, and thereby, prevent a jury from deciding key issues at the conclusion of a trial.
“A generic name – the name of a class of products or services – is ineligible for federal trademark registration,” the Supreme Court held in late June in its decision in the closely-watched booking.com case. However, while the nation’s highest court determined that such generic marks may not be registered with the USPTO, adding a Generic top-level domain, such as “.com” to such a generic term is capable of changing the outcome, which is why “‘Booking.com’ – unlike the term ‘booking’ standing alone – is not generic” in the eyes of the court.
In its decision, which was authored by the late Justice Ginsburg, the court held that “a term styled ‘generic.com’ is a generic name for a class of goods or services only if the term has that meaning to consumers.” In other words, a term is not generic and can be eligible for federal trademark registration if it is capable of distinguishing the goods/services of one company from those of others – in furtherance of the goal of trademark law, which is to “protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get.”
In holding that a showing of likelihood of confusion is a necessary element in a counterfeiting claim, three-judge panel for the U.S. Court of Appeals for the Ninth Circuit asserted that Section 1114 of the Lanham Act “addresses both trademark infringement and counterfeit claims, and we have repeatedly held that the plain language of Section 1114 requires a likelihood of confusion for a trademark infringement claim.” At the same time, the court stated that “we have not directly addressed it in the context of a counterfeit claim, perhaps because consumer confusion is generally not in dispute in most counterfeit cases.”
“For example, the use of a counterfeit Louis Vuitton trademark on a handbag is obviously intended to confuse consumers,” Judge Kenneth K. Lee wrote. “Put another way, a counterfeit claim is merely ‘the hard core or first degree’ of trademark infringement, and there is nothing in the statutory language of Section 1114 that suggests that a counterfeit claim should be construed differently from an infringement claim.”
Still yet, the court noted that “other circuits” – including the Fifth and Second Circuits – “also read the statutory provisions to require a likelihood of confusion for a counterfeiting claim.”
The Supreme Court’s 1995 decision in Qualitex v. Jacobson has been the basis for establishing and protecting color trademarks for the past two decades, and it is the basis for the USPTO’s Trademark Trial and Appeal Board (“TTAB”) determination in 2018 that hardware company Forney Industries’ 2014 application for a color mark – one that consists of the colors red, orange, and yellow with a black banner located near the top as applied to product packaging for welding and machining accessories and tools – could not be registered on the USPTO’s Principal Register, as the mark was not inherently distinctive, and thus, could only be registered after Forney showed that the mark had acquired distinctiveness in the minds of the consuming public.
Forney appealed the TTAB’s decision to the U.S. Court of Appeals for the Federal Circuit, maintaining its assertion that its mark is not a “color mark,” and instead, should be treated as product packaging. That distinction is significant, as it stands to remove the need to prove acquired distinctiveness, as while a color mark or a mark that consists of a combination of colors requires a showing of secondary meaning, product packaging can be inherently distinctive, and thus, registrable without proof of acquired distinctiveness.
It is against that background that the Federal Circuit issued a striking decision issued in early April, holding that “a distinct color-based product packaging mark can indicate the source of the goods to a consumer, and, therefore, can be inherently distinctive.” As such, the 3-judge panel for the Washington, DC-located Federal Circuit found the TTAB had “erred by holding that a multi-color mark can never be inherently distinctive, and that product packaging marks that employ color cannot be inherently distinctive in the absence of a well-defined peripheral shape or border.”
The color pink applied to the inside of boxes that are not otherwise pink. That is what is at the center of the new trademark registration that the USPTO has issued to Glossier. A year and a half after it filed an application for registration for its millennial pink hued product packaging, the USPTO has handed the direct-to-consumer beauty brand a win and agreed to register “the color pink as applied to the inner surface of portions of boxes that contrast with the color of the rest of the boxes, which form packaging for the goods” as a trademark for use in connection with an array of cosmetics products.
The registration – which was issued on December 15 (the same day that USPTO doled out three registrations for Valentino’s Rockstud footwear) – comes up a bit short of what Glossier initially set out in its application, with the burgeoning New York-based brand originally seeking protection for “the color pink … as a feature of the mark which is displayed on boxes” in its May 2019 application.
It is worth looking beyond Glossier’s individual applications to the larger evolution in branding that they represent, particularly when it comes to direct to consumer (“DTC”) brands, i.e., ones that sell products directly to consumers without the help of third-party retailers. With the rise of the DTC model – which has seen the rapid rise of billion dollar-plus brands, such as Glossier, Warby Parker, Casper, and Harry’s, just to name a few – has come a push by those brands (and others) to “invest more time, money and effort” in the visual elements of their products compared to what has generally proven to be the status quo for many of the companies that came before them.
A recent decision from the Court of Justice of the European Union provided a win for Ferrari that could have significant implications for other luxury brands, including those in the fashion space. On the heels of a loss before the Düsseldorf Regional Court after German toy manufacturer Autec successfully challenged the validity of Ferrari’s Testarossa trademark on the basis of non-use, the CJEU determined that Ferrari has not manufactured new models of its famed Testarossa since the 1990s, but it may still maintain trademark rights in the name.
One of the most interesting questions the CJEU was tasked with determining after Ferrari appealed the regional’s decision to the Düsseldorf Higher Regional Court, which then sought guidance from the CJEU, was whether the sale of trademark-bearing goods by a brand that it had previously released into the relevant market (i.e., pre-owned products) constitutes “genuine use” of the trademark. On this point, the CJEU’s panel of judges said yes, holding that the resale of goods by a trademark owner can constitute “genuine use,” even if those rights would have otherwise been exhausted as a result of the initial sale.
Not exactly a household name, Marine Serre – who showed her first full collection in Paris in February 2018 (after winning the LVMH Prize for Young Fashion Designers the year prior) – has, nonetheless, found a following within the high fashion sphere. “From New York to Paris, the brand’s instantly identifiable moon print leggings and tops have appeared across all four fashion week cities, solidifying the designer’s status as one to watch,” according to fashion site WhoWhatWear. In the process, the brand has also found fans in an array of big-name celebrities, from nearly all of the Kardashian/Jenner women and the likes of Beyoncé to K-pop stars Sandara Park and Jennie Kim, and singers Ariana Grande and Dua Lipa, who have all worn crescent moon-adorned wares from Serre’s collections.
Garnering famous fans, and also big-name collaborations, such as one with sportswear behemoth Nike, Marine Serre has managed to steadily expand the footprint of her brand beyond purely fashion industry circles, and a big part of the mounting appeal and growing level of consumer recognition can be tied to the brand’s logo, the crescent moon that consistently appears on its garments and accessories, which is coming to serve as a visual indicator of the burgeoning young brand.
All of the color marks that have been registered by the Japan Patent Officeto date consist of more than two colors, with the national trademark body refusing to register a single color as a trademark as of now. A an indication of the difficulty with which brands have had in amassing color-specific registrations in Japan? The strikingly slim success rate for color applications. Osaka-based trademark attorney Masaki Mikami notes 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 registrations: a mere eight, which makes for a 1.5 percent “success rate.”
Ultimately, Mikami tells TFL 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.”
In a currently-pending opposition that it initiated with the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) in October 2019, consumer cleaning supply and chemical behemoth S. C. Johnson called foul on Off-White’s application for the word “OFF” written both horizontally and vertically inside of a circle, for which Off-White is claiming rights in connection with its intent to use on various types of bags, including “all-purpose carry bags,” and jewelry. According to its notice of opposition, counsel for S. C. Johnson argued that Off-White should be blocked from registering the “OFF Cross Design mark” because it is a bit too similar to the marks it already uses in connection with its 63-year old Off! insect repellant brand.
Meanwhile, on December 15, the buzzy streetwear brand received a notice of allowance for its “Product Bag” trademark – quotation marks included – for use on “tops as clothing; bottoms as clothing.”
A federal court of appeals handed down the wrong decision in a case centering on trademark infringement damages, the Supreme Court held in late April. In issuing its decision in the closely watched Romag Fasteners Inc. v. Fossil Inc. case, the nation’s highest court sided with Romag, holding that the manufacturer of magnetic snaps, clasps, fasteners, and other closures does not need to show that Fossil willfully infringed its trademark in order to recover the brand’s profits as part of a damages award.
“A plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award,” Justice Neil Gorsuch wrote, on behalf of the unanimous panel of nine justices, in his decision in the case, which has been slated as standing to resolve a multi-circuit split among federal appeals courts across the U.S. when it comes to whether a showing of willful infringement is required for a plaintiff to make a play for an infringer’s profits.
A since-approved application for registration for “TTOOHHHJDD” for use on apparel is part of a large and ever-growing scheme, one that has caught the attention of the academics, practitioners, the Senate, and the USPTO, alike. In December 2019, New York University Law School professor Barton Beebe testified before a Senate subcommittee about “the harm to American consumers and businesses” that is being created as a result of a very specific type of intellectual property fraud.
The increasingly pervasive scheme – which largely comes out of China but which finds Amazon firmly situated at its center – sees third-party Amazon sellers duping the USPTO into issuing them registrations that they then use to increase “brand presence” – and thus, revenue – on the e-commerce titan’s marketplace.
The USPTO has been working to crack down on the rise in fraudulent applications, launching a pilot program in November 2018 to enable third parties to report altered or fabricated specimens that are submitted with use-based trademark applications. More recently, the USPTO has instituted changes to its trademark application, maintenance, and enforcement procedures, including requiring applicants to provide more information, such as their email addresses, and mandating that foreign applicants be represented by a U.S.-licensed attorney.
The color pink applied to the inside of boxes that are not otherwise pink. That is what is at the center of the new trademark registration that the U.S. Patent and Trademark Office (“USPTO”) has issued to Glossier. A year and a half after it filed an application for registration for its millennial pink hued product packaging, the USPTO has handed the direct-to-consumer beauty brand a win and agreed to register “the color pink as applied to the inner surface of portions of boxes that contrast with the color of the rest of the boxes, which form packaging for the goods” as a trademark for use in connection with an array of cosmetics products.
The registration – which was issued on December 15 (the same day that USPTO doled out three registrations for Valentino’s Rockstud footwear) – comes up a bit short of what Glossier initially set out in its application, with the buzzy New York-based brand originally seeking protection for “the color pink … as a feature of the mark which is displayed on boxes” in its May 2019 application. Glossier walked back a bit early this year following pushback from the USPTO, and amended the description of the mark to a slightly-less-sweeping: “the color pink as applied to the inner surface of portions of boxes that contrast with the color of the rest of the boxes, which form packaging for the goods.”
In making such a “contrasting color” modification to the language identifying its mark, the description of Glossier’s mark mirrors the language that Christian Louboutin was forced to adopt in connection with its trademark registration in light of the outcome of the trademark infringement case that it filed against Yves Saint Laurent in April 2011. Louboutin’s trademark registration now extends to a lacquered red sole on contrasting-colored footwear; as opposed to broadly covering a “lacquered red sole on footwear.”
(And in fact, Glossier’s counsel pointed to Louboutin’s trademark rights – “by way of analogy” – in its February 2020 response to the USPTO’s Office Action to support its quest for “protection for a narrowly defined display of the color pink that is capable of acquiring distinctiveness just as Louboutin’s red sole was.” It is worth noting that Glossier’s registration does not cite a specific Pantone hue like Louboutin’s does.)
The description of Glossier’s mark also notes that “the shape and configuration of the box is not a part of the mark,” and instead, “merely represents boxes of various sizes and serves to show positioning of the mark,” thereby, enabling Glossier to claim rights in any of the shapes/sizes of boxes that it uses to package and ship its hot-selling cosmetics products – from its Cloud Paint cream blush to its Generation G sheer matte lipstick. This is no small matter given the fact that Glossier almost certainly does the vast majority of its sales via e-commerce both in a pre- and post-pandemic given its relatively limited brick-and-mortar footprint.
While the concept of a color – or better yet, the specific use of a specific color on a specific category or categories of goods/services – as a trademark is well established (Owens-Corning, Qualitex, Tiffany & Co., Louboutin, UPS, Home Depot, etc.), the USPTO was still slightly hesitant when it came to Glossier’s mark, and issued an Office Action in August 2019 on the basis that its use of the color pink on the inside of a box is functional and decorative and thus, not an indicator of source..
According to the USPTO, consumers are unlikely “to perceive the color pink as identifying the origin of [Glossier’s] goods; but rather, as [a] decorative feature … because they are accustomed to encountering various colors, including pink, on various packaging for cosmetics and beauty care goods.” (The examining attorney pointed to pink boxes utilized by Kylie Jenner’s eponymous cosmetics brand, subscription box company Fab Fit Fun, and Sephora as examples).
Counsel for Glossier responded to the USPTO’s Office Action by way of a 160-page filing in February 2020, in which it argued that the company’s use of the color is not functional. Not only are there “numerous other color options available for other parties to use on the interior of boxes for cosmetic products,” Glossier cited the Federal Circuit’s 1985 decision in In re Owens-Corning Fiberglas Corp. (which found that “depriving the public of the right to color insulation pink does not hinder competition or take from the goods something of substantial value”) in asserting that“there is no particular value or advantage to making a pink interior that contrasts with the rest of the box.”
In addition to not being functional, Glossier asserted that its mark has acquired distinctiveness “based on five years’ use of the mark, as well as extensive evidence that when the relevant consumers see the color pink on the interior of a box for cosmetics, and the rest of the box is a contrasting color, they immediately recognize it as emanating from Glossier.”
According to the nearly 7-year old brand, “The ultimate test in determining whether a designation has acquired distinctiveness is an applicant’s success in educating the public to associate the proposed mark with a single source.” Here, Glossier claimed that it has done so by “consistently promot[ing] the Pink Box by featuring it in social media posts and other advertising,” and being the subject of unsolicited social media attention from purchasers, who “make a point to share photos of not just [its] cosmetic products, but also the box they come in,” which Glossier says “speaks to the distinctiveness of the packaging.”
These social media posts – in which “consumers frequently post their own images of the Pink Box and identify Glossier in tags and hashtags” – not only “demonstrate that many consumers already associate the Pink Box with [Glossier], but they also serve to educate even more consumers and reinforce the association between the Pink Box and Glossier,” the brand asserted. It also submitted 98 customer declarations, examples of third-party social media posts and unsolicited media coverage, and copies of the pouch by other brands as evidence of acquired distinctiveness.
Fast forward to December 15, and Glossier can add a registration for the pink interior of its product packaging to the registration it was issued in August for its pink bubble wrap pouch, or “the claimed color pink as applied to bags featuring lining of translucent circular air bubbles and a zipper closure” to be exact.
The registration is certainly striking given the ripe not-old age of the Glossier brand, and it may suggest that the digitalization of consumption and the rise of social media is making it easier for brands to establish the requisite level of acquired distinctiveness for their source-identifying use of the color. However, it should not necessarily be viewed as an indication that such plays for color are likely to be a sure-fire for other young brands given that Glossier is, in many ways, an outlier.
In addition to courting a cult fan base, which arguably dates back before the launch of the brand in 2014 to 2010 when Glossier founder Emily Weiss first launched her heavily-followed Into the Gloss beauty blog, the company’s “no-makeup” beauty products and Instagram-centric aesthetic benefit from the backing of nearly $200 million in funding from sophisticated VCs, including Forerunner Ventures, Thrive Capital, Index Ventures, and Sequoia Capital, among others. In other words, Glossier – which nabbed a valuation of a whopping $1.2 billion in March 2019 at the close of its $100 million Series D funding round – is hardly the average beauty startup. It is a resource-flush machine that is well-equipped (both in terms of its consistent and sweeping marketing strategy, and its established legal prowess, of course, courtesy of Barnes & Thornburg) to demonstrate the its specific use of a color – millennial pink – is a distinctive identifier of a single source among its target consumers.
As Osler Hoskin & Harcourt LLP’s May Cheng and Maryna Polataiko asserted in connection with the protection of color marks, the “hurdle” that is acquired distinctiveness “may be difficult to overcome for less-established brands or those with lower brand consistency” and presumably, those with lower brand reach. And that likely remains true even as Glossier continues to build up its trademark portfolio.
Nonetheless, Glossier is certainly shedding light on how forward-thinking companies are approaching branding, which includes going beyond merely word marks and logos to product packaging and color to build – and consistently reinforce – brand awareness in a heavily (and increasingly) digital market.
In 2012, Christian Louboutin made headlines in connection with the trademark case it initiated against Yves Saint Laurent. A federal Court of Appeals determined that its red sole trademark – for use on high heels shoes of a contrasting color – is, in fact, a valid mark. In issuing its opinion, the U.S. Court of Appeals for the Second Circuit shot down the lower court’s determination that color per se can never be a valid trademark for fashion-related products, such as footwear, and handed Louboutin a partial win.
“While Louboutin failed to obtain the relief it sought,” which was an injunction barring YSL from selling all-over red shoes complete with red soles, because its trademark rights are limited to instances in which the role sole contrasts with the color of the upper of the shoe, the decision, nonetheless, created a “basis for future enforcement against competitors who imitate the distinctive Louboutin contrasting red sole,” Foley & Lardner’s Andrew Baum wrote at the time. More broadly, he noted, the Second Circuit’s decision was “a victory for trademark owners who seek to incorporate a nonfunctional color into their overall branding scheme.”
On the heels of its case against YSL in the U.S., Louboutin set out on a tour de force aimed at formally amassing and/or enforcing rights in other jurisdictions, including Switzerland, France, Belgium, China, India, and Japan. What has come of that quest has been nothing short of time-consuming and resource-intensive, and at times, the results have been mixed. On one hand, the validity of the famed footwear brand’s trademark has been upheld by a series of important decisions, including ones from the Paris Court of Appeal, the Court of Justice for the European Union, the Hanseatic Court of Appeals in Germany, the Beijing High Court, and the European Union Intellectual Property Office, among others.
At the same time, though, Louboutin has not necessarily fared well in other countries, including Japan, where the Paris-based brand is currently in the midst of an appeal over the protectability of its red sole as a trademark.
Interestingly, the notion of color trademarks is not entirely novel in Japan, with the Japanese Ministry of Economy, Trade and Industry announcing in March 2017 that the Japan Patent Office (“JPO”) had registered the first two standalone color marks: one for the blue-white-black colors that appear on the packaging of Tombow’s “Mono” eraser, and another for the orange, green, and red signage that adorns 7-Eleven’s stores. The registrations came on the heels of an amendment to the Trademark Act of Japan, which, as of its enactment in April 2015, allows for the registration of nontraditional marks, including color and sound.
Speaking about the registerability of colors in 2017, 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. As Osaka-based trademark attorney Masaki Mikami recently noted, 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.
With that in mind, Louboutin has not the first company to face pushback over its quest for a single color mark. The trademark application that Hitachi Construction Machinery filed in 2015 for a specific color orange for use on “hydraulic excavators, wheel loaders, road loaders, loaders, and dump trucks” was rejected by the JPO – and ultimately, the IP High Court – which found that the color has not acquired distinctiveness as a source indicator of Hitachi’s hydraulic excavators.
Similarly, in furtherance of the larger trend in rejections of color marks on the basis that they “lack of distinctiveness and [the applicants fails] to demonstrate acquired distinctiveness,” an application filed by Hermès for a three-color combination mark for use in classes 14 (jewelry), 18 (leather goods), and 25 (clothing) was rejected by the JPO.
Hermès has since been granted registrations for the same Red (Pantone 2028C), yellow/orange (Pantone 1235C) and blue (Pantone 295 C) mark for use on those same types of goods in the U.S., France, Australia, the Philippines, and with the World Intellectual Property, with such different outcomes potentially serving as a demonstration of what Mikami calls the “significantly high hurdle to clear” when it comes to color marks in Japan.
A further indication of the difficulty with which brands have had in amassing color-specific registration in Japan? The strikingly slim success rate for color applications. Mikami notes 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.”
Ultimately, Mikami tells TFL 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.”
Maybe Louboutin will be one of the outliers, although, it seems unlikely.
