Inside IP Quarterly Newsletter - Winter 2012

IN THIS ISSUE

Trademarking Colors in the Fashion Industry Avoid Inadvertent Abandonment of Your Trademark When Does "News" Really Fall Under the "News" Exemption FTC'S Revised "Green Guides" Provide Instruction On Environmental Marketing Claims TRADEMARKING COLORS IN THE FASHION INDUSTRY IS NOT BLACK AND WHITE

By Pamela M. Miller

The other shoe has finally dropped in the widely publicized Louboutin v. Yves Saint Laurent case, with the Second Circuit rejecting a bright line rule that a single color can never serve as a trademark in the fashion industry.1 Although this decision has been declared a victory by both parties, as well as the fashion industry, which often argues that United States law does not protect fashion design adequately, is this decision truly a victory for all?

Louboutin and Yves Saint Laurent ("YSL") are well-known fashion houses that both manufacture high end shoes. Louboutin's shoes are best known for their trademarked red lacquered outsoles on women's footwear ("Red Sole Mark").2 After discovering that its competitor, YSL, was making shoes with red soles as well as red uppers (i.e., monochromatic), Louboutin sued YSL for trademark infringement.3 YSL counterclaimed, seeking cancellation of Louboutin's Red Sole Mark, and contending that it was functional, and thus not protectable.4 Under applicable law, if an aspect of a product gives a producer a competitive advantage that is not related to its source identification purposes, then it cannot be trademarked as it is deemed functional.5 Using this framework, the district court sided with YSL, finding that in fashion, color is always functional because color is a useful aesthetic feature to which all designers should have access.6

If the case would have ended here, Louboutin would have essentially lost all protection over its signature red soles, essentially allowing competitors to begin making knock-offs without fear of trademark infringement — with similar implications for other fashion houses using color as a source identifier. Luckily for Louboutin, the case did not end here. On appeal, the Second Circuit held that the Supreme Court specifically forbade the implementation of a per se rule denying protection for the use of a single color as a trademark in the fashion industry.7 The court determined that an analysis of functionality necessarily requires an individualized fact-based inquiry to determine if that single color is used so consistently and prominently by a particular designer that it becomes a symbol, the primary significance of which is to identify the source of the product rather than the product itself — meaning that it has acquired secondary meaning.8 Because the court determined that Louboutin had only demonstrated that secondary meaning in products where the red sole contrasted in color with the upper part of a shoe, the court narrowed Louboutin's Red Sole Mark accordingly.9 Based on this narrowed scope of protection, the court determined that YSL did not infringe the Red Sole Mark as modified because YSL's shoes were monochromatic, and thus had no color contrast between the sole and the upper.10

This case is a good reminder that trademark owners put their own brands at issue when they assert infringement claims against others and, as a result, should carefully consider the implications before asserting such claims. Here, prior to the court's narrowing of the Red Sole Mark, Louboutin had broad trademark protection covering red soles on footwear for women. This mark likely prevented any number of Louboutin's competitors from using red on the outsole of a woman's shoe, essentially giving Louboutin the monopoly on this color in the fashion industry. As narrowed, the Red Sole Mark only covers shoes with red soles that contrast in color with the upper. Based on this narrowing, its competitors are now free to start making monochromatic shoes like YSL and may even begin to test the scope of what it means to "contrast" the color red. Would a shoe's pink upper be found to be contrasting with a red sole, for example? Because the court did not give any clear guidance as to what colors are deemed to contrast with Louboutin's red soles, it is an open question that may be left for another lengthy court battle. One might wonder if the result would have been better for Louboutin if it would have sued a company making a shoe with a black upper and a red sole, most akin to Louboutin's iconic brand. This is a question that Louboutin should have...