…Oh I used to be disgusted
and now I try to be amused.
But since their wings have got rusted,
you know, the angels wanna wear my red shoes.
Red shoes, the angels wanna wear my red shoes...
For awhile, at least in the Second Circuit, we were wondering who could sell red shoes and/or whether angels might have to go barefoot for awhile… But now we seem to have some clarity on the issue.
To review, Louboutin has been fighting since 2011 to stop Yves St. Laurent (“YSL”) from copying his trademark red-soled shoes. In what had been a somewhat surprising opinion, the Southern District of New York had denied Louboutin’s request for an injunction against YSL’s monochrome red shoes (that included a red sole) last August, on the grounds that color was per se functional as applied to fashion items. We’ve been waiting for months for Louboutin’s appeal to reach a decision, which finally came down on September 5, 2012 from the Second Circuit Court of Appeals.
My earlier ruminations on this case had really focused on the older theory of “color depletion” as a possible rationale for disallowing Louboutin’s claim to exclusive rights in a red outsole — and what an affirmance of the district court’s ruling might mean for that theory. But on appeal the Second Circuit reversed and held that, consistent with prevailing precedent, single color marks are not per se aesthetically functional — and therefore are protectable. The court went on to say that Louboutin’s contrasting red sole has obtained secondary meaning (meaning people recognized the contrasting red outsole as an indicator that the shoe came from Louboutin). Thus, Louboutin, according to the Second Circuit, owns exclusive rights in the color red as applied to an outsole where said outsole is in a contrasting color to the remainder of the shoe. A win for Louboutin? Well sort of…
After reviewing the history and contours of functionality and aesthetic functionality the court summarized the relevant Second Circuit test for aesthetic functionality as follows:
…a mark is aesthetically functional, and therefore ineligible for protection under the Lanham Act, where protection of the mark significantly undermines competitors’ ability to compete in the relevant market [citations omitted]… In making this determination, courts must carefully weigh ‘the competitive benefits of protecting the source –identifying aspects’ of a mark against the ‘competitive costs of precluding competitors from using the feature’.”
Curiously, however, the court did not then apply the above test directly to Louboutin’s claims. Rather (and properly) the court took pains to establish the metes and bounds of Louboutin’s trademark rights—a necessary analysis before deciding whether the functionality defense needs to be raised at all. In so doing, the court concluded that Louboutin indeed does own an enforceable trademark – but only in red as applied to an outsole where the shoe upper is in a contrasting color. The court reaches this conclusion, in part, based upon ample record evidence that the public recognized a shoe as a Louboutin shoe because of the contrasting red color on the outsole.
That all makes sense to this blogger. But then the court rather conclusively stated:
[h]aving limited [Louboutin’s enforceable mark to the outsole], and having established that the red sole used by YSL is not a use of [Louboutin's mark], it is axiomatic that we need not- and should not – address either the likelihood of consumer confusion or whether the [contrasting use of red on the outsole] is functional.”
(Emphasis added). Hence, YSL can keep making its monochrome shoe because it is not identical to Louboutin’s mark.
Hmmm. This seems a bit of judicial slight of hand. In essence the court is saying that there can be no confusion between the use of a single contrasting color mark on an outsole and use of the identical color in a monochromatic treatment that includes the outsole. But do we really know that consumers could not be confused? Couldn’t they?
One possible rationale for the court’s conclusion could be that the court felt that a single color used on a shoe upper would likely be found to be aesthetically functional. If that were the case, then of course a court would be hard-pressed to enjoin a red (uppered) shoe based upon Louboutin’s red sole mark even if that mark is valid and enforceable. But that doesn’t answer why a monochromatic shoe that includes a red outsole could never be confusingly similar to a shoe with a contrasting red sole.
Of course, the court could have concluded that a monochromatic shoe also is aesthetically functional. But is a monochrome shoe aesthetically functional? Using the court’s own test, would competitors be disadvantaged by allowing trademark protection on monochrome treatments that included both the outsole and the upper? I don’t know because there really was no analysis of that point.
Intuitively and logically allowing a designer to claim a single color used on a shoe upper would have to be improper as aesthetically functional — and the test the court enunciates (competitive disadvantage) would support that conclusion. Also, I think the test supports the court’s conclusion that a single contrasting color used on an outsole (perhaps other than leather brown) is not functional or aesthetically functional, since fashion designers don’t need (non-leather) shades on the outsole to compete. But the conclusion that a monochromatic use of a single color across the entire shoe is per se functional seems, at a minimum, less than supported by the test or the evidence. Furthermore, to simply conclude that it is axiomatic(?) that consumer confusion need not be considered because the registered mark is not identical to the allegedly infringing use, seems to make short shrift of the analysis, which analysis does not require that the marks in question be identical.
This blogger thinks it might have been more interesting had the court remanded the case for further review as to whether a monochromatic shoe is aesthetically functional under the court’s test and, if not, whether Louboutin’s red outsole mark could be confusingly similar to the monochrome shoe of YSL.
Well, at least for now Elvis’ angels can wear YSL’s red shoes…