Christian Louboutin Sees Red—New York Court Refuses to Stop Yves Saint Laurent’s Use of Red!

Summary:

On August 10, 2011, Judge Victor Marrero of the Southern District of New York denied Christian Louboutin’s (“Louboutin”) motion for preliminary injunction against Yves Saint Laurent America, Inc.’s (“YSL”) use of red color on outsoles of women’s high heeled shoes. At issue in this case were several models of YSL’s shoes that had bright red outsoles as part of a monochromatic design in which the shoes are either entirely red or blue or yellow, etc.

Although the court acknowledged that a niche group of “well heeled” consumers associated Louboutin’s lacquered red outsoles with him, it refused to extend protection to the red outsoles. Rather the court found that the red color serves non-trademark purposes particularly because fashion is dependent on colors. Allowing Louboutin to have a monopoly over a single color would “cast a red cloud over the whole industry, cramping what other designers could do, while allowing Louboutin to paint with a full palette.” Furthermore, Louboutin’s federal registration for the color red as applied to footwear (“Red Sole Mark”) did not help him. As discussed below, the court held that Louboutin failed to demonstrate that its Red Sole Mark merits protection.

The court held that because Louboutin did not demonstrate that its Red Sole Mark merits protection, it need not consider whether YSL’s shoes are not likely to cause confusion with Louboutin’s shoes, nor whether Louboutin is likely to suffer irreparable harm absent an injunction. Judge Marrero invited YSL to cancel the Red Sole Mark.

Facts:

Renowned women’s shoe designer, Christian Louboutin is known for high heeled shoes that have a glossy vivid red outsole. Louboutin first thought of these red outsoles in 1992 and in his own words, he regarded the color red as engaging, flirtatious, memorable and the color of passion as well as sexy. Sometime in early 2011, YSL began offering several models of shoes that featured a bright red outsole as part of a monochromatic design in which the shoe is entirely red or yellow or blue, etc. After attempts to have YSL withdraw the challenged models from the market failed, Louboutin sued YSL for trademark infringement among other claims. Subsequently, Louboutin sought a preliminary injunction to prevent YSL from selling the challenged shoes during the pendency of its trademark infringement action.

The SDNY denied Louboutin’s motion for preliminary injunction.

The Opinion:

At the heart of the SDNY’s opinion was the question whether Louboutin’s Red Sole Mark merits trademark protection. Judge Marrero acknowledged that a single color alone is “sometimes” protectable as a trademark “if it “act(s) as a symbol that distinguishes a firm’s goods and identifies their source, without serving any other significant function.” However, the judge held that in the fashion world, single colors have significant non source identifying functions. Just as painters cannot stake a claim to single colors, fashion designers could also not stake such a claim because this would stifle creativity. Moreover, single colors, when used on fashion items, are functional because they affect the quality and cost of the items.

To deal with the “creativity” aspect, the court took the help of a hypothetical involving two stellar modern masters–Picasso and Monet. (Judge Marrero acknowledged that lawyers could argue that this hypothetical is inapt and distinguishable.) The judge hypothesied that Picasso has a problem with Monet’s water lillies because the distinctive indigo color of the lillies is the same or too close to the “exquisite shade that Picasson declares is “the color of melancholy.”” As per the court, “[n]o one would argue that a painter should be barred from employing a color intended to convey a basic concept because another painter, while using that shade as an expressive feature of a similar word, also staked claim to it as a trademark in that context.” Every painter and designer has the “freedom to pick and choose color from every streak of the rainbow” and “allowing one artist or designer to appropriate an entire shade… would unduly hinder not just commerce and commerce and competition, but art as well.”

As for the functionality aspect, the court concluded the lacquered red color serves a functional purpose. It is well-settled that a single color is functional if a monopoly over its use will put a competitor at a significant disadvantage because the color is “essential to use or purpose” of the article to which it is applied or if it “affects its cost or quality”. Here, the court held, color is functional because in Louboutin’s own words, he chose the lacquered red color because it gave his shoes “energy”, is “engaging” and “sexy” and “attracts men to the women who wear my shoes.” On the other hand, YSL used red in its shoes to evoke Chinese design elements. Moreover, YSL’s shoes are entirely red in color—to indicate that they are part of the brand’s history and coordinate with clothing items offered in the same collection. It follows that the red outsole is an “object of beauty” and “[t]o attract, to reference, to stand out, to blend in, to beautify, to endow with sex appeal—all comprise nontrademark functions of color in fashion.”

The court was also of the opinion that the red lacquered outsole affects the cost of the shoe, though not in a manner traditionally understood in a functionality analysis. Here, adding the red lacquered finish to a plain raw leather sole costs more than producing shoes without the red lacquered finish. However, for fashion designers such as Louboutin and YSL, “the higher cost of production is desirable because it makes the final creation that much more exclusive, and costly.”

Unfortunately for Louboutin, the court criticized its Red Sole Mark and invited YSL to cancel the mark. First, the court took issue with the vagueness of the Red Sole Mark because it claims the color red without any limitation as to shade. (In its reply brief, Louboutin identified the exact Pantone shade of its red color for the first time. However, the court held that Louboutin could not limit its registration by representations made in its litigation with YSL. Accordingly, the color in the registration governs. Even if the court were to accept the limitation of Louboutin’s color to the Pantone shade identified in the litigation, YSL represented that it had never used that exact shade on its outsoles). This, the court held, was “overly broad and inconsistent with the scheme of trademark registration established by the Lanham Act.” Permitting Louboutin to get a monopoly over the color red would prohibit competitors such as YSL from using red on outsoles of its shoes for stylistic purposes discussed above. Second, the goods covered by the registration of the Red Sole Mark are “women’s high fashion designer footwear.” This broad identification of goods could cause Louboutin to prevent competitors from using red not only in high fashion shoes, but for other articles as well, including articles that have been designed to match with monochromatic shoes. Third, the registration claims protection not just in the base of the color red, but also its gloss. Thus, the court held that it is not clear whether the Red Sole Mark extends protection to a “Chinese red” outsole that was not shiny, but entirely flat.

The court also addressed the oft used “color depletion” theory in support of its opinion. It held that if Louboutin is allowed to own one shade of red for an outsole, another designer can “just as well stake out a claim for exclusive use of another shade of red, or even Louboutin’s color, for the insole….”

Louboutin proposed that the court draw out a forbidden zone above and below the exact Pantone shade stated in the reply brief. However, the court rejected this proposal on the ground that its acceptance would give Louboutin rights far beyond the injunction requested by him. The court envisaged that if it were to accept Louboutin’s proposal, other designers would need to seek advance clearance from Louboutin himself or go to court for a declaratory judgment that their proposed red sole does not infringe Louboutin’s mark, “thereby turning the judge into an arbiter of fashion design.”

Conclusion:

The tone of the opinion indicates that Judge Marrero meant to sent a message to fashion companies which take aggressive stances with regard to their intellectual property. The court could have simply denied the preliminary injunction by finding that Louboutin was not likely to succeed on the merits because there was no likelihood of confusion or that YSL’s use of a red outsole on all red shoes was a fair use. Instead it chose to attack the very existence of Louboutin’s trademark rights.

The court acknowledged that Louboutin had secondary meaning in its red outsole and ownership of a federal registration. However, it appears that the very broadness of the registration, as the court saw it, might have been a death knell for Louboutin. Judge Marrero clearly appears to favor free competition over exclusive rights. It is possible that this case might have had a different outcome if Louboutin had objected to shoes that were not entirely red (the court also wondered why Louboutin had not previously objected to YSL shoes which were also monochromatic red), but for example, a black high heeled shoe with a red outsole. That would have made it difficult to argue that the competitor needed to make the outsole red.

This dispute between the two French giants is certainly not over. Louboutin’s attorneys have indicated that Louboutin will appeal the decision. Furthermore, the trademark infringement action is still pending. The next important event in the case will be the results of a court conference at which Louboutin is required to show why its registration should not be canceled.

What the Opinion Means for the Indian Fashion Industry:

In recent times an increasing number of Indian designers have forayed into the US market. Undoubtedly these designers will be interested in protecting their intellectual property, including single colors, in the United States. In the event any entrant into the US market desires to apply to protect her or his right in a single color, adding a design feature to a single color should be considered. If, however, a designer applies to protect a single color at the US Patent and Trademark Office, the application should describe the color with specificity. It is probably not enough to say red or magenta. It is advisable to mention a Pantone shade, if possible. Furthermore, the goods covered by the application should also be described narrowly. The application must also include a particular placement of the color.

This decision was handed down by the Southern District of New York. We do not know for sure how this case will fare in the Second Circuit Court of Appeals or the fate of the pending action for trademark infringement. However, at this time, if an Indian designer wants to litigate a case involving single color, she or he would be ill-advised to bring the case in the Second Circuit.