Trademark Law is Not Colorblind

Trademark Law is Not ColorblindIn the fashion world, the word “trademark” tends to get tossed around casually. Style writers highlight a designer’s “trademark” use of patterns or “trademark” silhouette. But can these signature features actually be trademarks? In the case of a color trademark for soles of high heels, the question was hotly debated—so hot, it had the Second Circuit seeing red.

Christian Louboutin S.A. v. Yves Saint Laurent, No. 11-3303 (2d Cir., Sep. 5, 2012) (Judges Cabranes, Straub, and Livingston)

Christian Louboutin’s high-end high heels are known, at least among red-carpet crowds and Sex and the City watchers, for their bright red soles. The U.S. Patent and Trademark Office (PTO) granted Louboutin a federal trademark registration for the “lacquered red sole on footwear” shown here:

Louboutin color mark

Yves Saint Laurent (YSL) later introduced a line of monochromatic shoes that were entirely a single color—toe, heel, and sole. Since one of these shoe designs was red, Louboutin sued YSL for trademark infringement and asked the district court to stop YSL from selling the red shoes. Despite Louboutin’s federal trademark registration, Judge Marrero at the district court ruled that Louboutin’s trademark was functional, and therefore invalid, because, under a new rule he established, a single color is never entitled to trademark protection in the fashion industry. This rule was expansive and new, so naturally, Louboutin appealed his decision.

The question before the Second Circuit was whether, in the fashion industry specifically, a designer could claim a color as his trademark—and keep competing designers from using it.

Color Me a Trademark

Here’s a little background on colors as trademarks, in any industry. The U.S. Trademark Act defines a trademark as including “any word, name, symbol, or device, or any combination thereof used … to identify and distinguish his or her goods … from those manufactured or sold by others, and to indicate the source of the goods….” The Supreme Court addressed the question of whether a single color meets the requirements of a registrable trademark in the 1995 Qualitex case.

In Qualitex, the Supreme Court held that a single color can be a protectable trademark, at least sometimes, as long as the color denotes the source of the goods without serving any other function. Key to this decision, though, is that a color can’t get trademark protection if the color is functional. More precisely, if giving trademark rights to a color would limit competition or grant the trademark holder a monopoly on a necessary feature of a product, then the color isn’t protectable. This concept is known as “aesthetic functionality,” and it’s controversial in the trademark law world—some circuits (like the Fifth Circuit) don’t recognize the doctrine at all. But the doctrine is alive and well in the Second Circuit, where this case rolled out.

Stomping Out the Lower Court’s New Trademark Rule

As I mentioned above, the district court judge implemented a new rule that in the fashion industry, color can’t get trademark status. He reasoned that taking a color out of the spectrum presents a unique problem in the fashion industry because aesthetics are inextricable intertwined with fashion. The fashion industry exists because people care about appearances. He likened granting trademark protection for a color in the fashion industry to giving Picasso rights to the color blue during his “Blue Period.”

On appeal, the Second Circuit rejected Judge Marrero’s fashion-industry specific rule because it interpreted the rule as inconsistent with Qualitex. Qualitex, the court said,

specifically forbade the implementation of a per se rule that would deny protection for the use of a single color as a trademark in a particular industrial context. Qualitex requires an individualized, fact-based inquiry into the nature of the trademark, and cannot be read to sanction an industry-based per se rule.

(See page 22 of the Louboutin decision.) Since the lower court had stated and applied exactly that type of rule, the Second Circuit got rid of it and reversed the district court’s decision.

The Second Circuit noted that the issue of color marks is particularly difficult in the fashion industry because “color can serve as a tool in the palette of a designer, rather than mere ornamentation.” But the court concluded that the governing rule is the rule from the Qualitex decision: “The ultimate test of aesthetic functionality … is whether the recognition of trademark rights [in an aesthetic design feature] would significantly hinder competition.”

Cutting the Pattern of the Red Sole Mark

Once the Second Circuit established the correct rule, its application of the rule lead to an interesting compromise. The court determined that Louboutin had established that the red sole is distinctive because consumers and those in the fashion industry—including YSL, however begrudgingly—recognize Louboutin’s shoes by the red sole. So, Louboutin could keep his trademark registration. However, considering the “competition” angle of aesthetic functionality, the court also allowed YSL to keep selling its monochromatic red shoes.

The court concluded that the red sole alone isn’t what makes Louboutin’s mark distinctive—it’s the contrast between the red sole and the color of the upper part of the shoe. The contrasting colors allow the Louboutin sole to “pop” out visually, as you can see from this picture:

Louboutin Red Soles

The appellate court determined that Louboutin had only shown that its mark is distinctive when the top and bottom of the shoe are different colors. It ordered the PTO to modify Louboutin’s registration to clarify that contrast is required.

YSL’s shoes, on the other hand (or foot), are designed to be all one color—to specifically avoid contrast. Compared to Louboutin’s modified mark, the court concluded that YSL’s use of a red sole on monochromatic shoes isn’t a use Louboutin’s red sole mark.

Walking Away from Trademark Trouble?

This case deftly walked a tightrope (in high heels, no less) between allowing some IP protection in the fashion industry—an industry that doesn’t get much IP love—and not limiting protection for the creativity or artistry of particular designers. The court noted the difficult choices this scenario presents, remarking that “aesthetic function and branding success can sometimes be difficult to distinguish,” and that it “must take care to ensure that the mark’s very success in denoting (and promoting) its source does not itself defeat the markholder’s right to protect that mark.”

The opinion might not make things easier for judges in future fashion and trademark cases, though. The lower court’s per se rule would certainly be easier to apply, and determining whether a color has acquired distinctiveness, and, if so, the boundaries of the distinctive features, can lead to messy questions. Where shoes are involved, the divide between the sole and the upper part of the shoe is clear. But will the lines be so easy to draw if the fashion items are purses, jewelry, or clothing?

In the fashion world, one day you’re in, and the next day, you’re out. The same can be said for Judge Marrero’s short-lived “aesthetic functionality for color in fashion” rule.

(Photo credits)

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