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Christian Louboutin clicked the heels of his fabulously expensive shoes together, and the Second Circuit granted his wish – trademark protection of its signature red soles. The court, however, limited the protection “to uses in which the red outsole contrasts with the color of the rest of the shoe,” meaning that if Yves Saint Laurent (YSL) were to use a red sole on a red shoe, as it did in this case, it would not infringe on Louboutin’s trademark. So, the Second Circuit – in a spectacular Glinda-the-Good-Witch fashion – also handed down a win to YSL, and everyone in Oz was happy.
This decision overturned last year’s district court ruling. The district court ruled against Louboutin, noting that one color could never serve as a fashion brand trademark, even though the U.S. Patent and Trademark office had granted Louboutin protection in 2008. The district court used Qualitex Co. v. Jacobson Products Co., in which the Supreme Court ruled that a single color can be trademarked if it has acquired secondary meaning and that it does not serve any other significant function. The district court highlighted the functionality requirement as the deathblow to single trademarks in the fashion industry, because in fashion, colors are inherently functional.
To come to this win-win conclusion, however, the Second Circuit was forced to make several sleights of hand. First, the court frames the issue as “whether a single color may serve as a legally protected trademark in the fashion industry and, in particular, as the mark for a particular style of high fashion women’s footwear.” The court answers in the affirmative, and in support of this answer cited heavily to Qualitex, emphasizing the Supreme Court’s approval of trademarks on single colors. But, the court’s decision in this case does not rely on the trademarkability of Louboutin’s signature red soles as a single color, but as two (or more) contrasting colors. Some commentators have wondered that with this additional restriction of contrasting colors, perhaps the appropriate mode of protection is not a trademark, but a patent.
Second, in addressing the district court’s establishing a per se rule of functionality for color marks in the fashion industry, the Second Circuit explains that its own reading of Qualitex would disallow any court from establishing any per se rules. The court asserts that each single color mark case merits a fact intensive analysis because the “Qualitex Court expressly held that ‘sometimes[ ] a color will meet ordinary legal trademark requirements[, a]nd, when it does so, no special legal rule prevents color alone from serving as a trademark.’” This logical leap taken from the Court’s permissive language to a hardline restriction seems dubious.
The Second Circuit addresses this by noting that even if Qualitex allows for per se rules of functionality in certain industries, it is inappropriate for the fashion industry. The functionality defense was not meant to guarantee a competitor the use of the full range of his creativity, but to ensure his ability to “fairly compete in a given market.” If color is not inherently functional in fashion, it is difficult to imagine any other market that would be subject to per se rules of functionality, essentially rendering the above concession moot.
Finally (and here is where the real magic happens), after an extensive review of the history of trademark protection of single-color marks and the aesthetic functionality defense, the court makes its decision on a completely different basis: because YSL’s red sole was not actually a use of Louboutin’s mark, there was no need to consider whether “the likelihood of consumer confusion or whether the modified Mark is functional.” In reading the conclusion of the Second Circuit’s opinion, there is almost a sense of disappointment, perhaps akin to what Dorothy felt upon pulling back the mysterious curtain to find the small, squeaky man behind the large looming head. Here is yet another trademark decision based on use of mark.
– Shannon Han
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