Christian Louboutin tried to distinguish its shoes from others by giving them a shiny red lacquered sole. The company takes the position that the red sole functions as a trademark — that it helps consumers know the source or origin of the shoes.
In general, colors can be trademarks. See Qualitex v. Jacobson Products, 514 U.S. 159 (1995). Think of the Owens Corning fiberglass insulation’s iconic pink color, or the blue Tiffany boxes. Those colors are protected as trademarks, and no competitors may use them without running afoul of the Lanham Act.
However, trademarks are about promoting competition – not stifling it. Therefore, if something is “functional,” then it can not be the subject of trademark protection.
“The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm’s reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, 35 U.S.C. §§ 154 173, after which competitors are free to use the innovation. If a product’s functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity).”
Under the doctrine of “aesthetic functionality,” something can be solely aesthetic, but it would be anti-competitive to permit one company to monopolize the feature. For example, in Brunswick Corp v. British Seagull, Ltd., 35 F.3d 1527 (Fed. Cir. 1994), the Federal Circuit considered the case of Mercury outboard engines. Mercury sought trademark protection for its black engines, but the Federal Circuit upheld the TTAB’s decision that black was “dejure functional because of competitive need.” The Court compared the black engines to Owens-Corning’s pink fiberglass. While the pink in the fiberglass serves no real purpose except to tell you who made the stuff, a black engine will appear smaller than other colored engines (black is slimming, after all) and black goes with a greater variety of hull colors. Therefore, trademark protection for pink fiberglass is ok, but every engine manufacturer has a right to make black engines.
So how does this apply to the Christian Louboutin Shoes?
Manhattan federal judge Victor Marrero found that the red was aesthetically functional. Christian Louboutin S.A. v. Yves St. Laurent Am., Inc., 778 F. Supp. 2d 445 (S.D.N.Y. 2011).
Christian Louboutin himself has acknowledged significant, nontrademark functions for choosing red for his outsoles… he stated that he chose the color to give his shoe styles “energy” and because it is “engaging.” He has also said that red is “sexy” and “attracts men to the women who wear my shoes.” … The outsole of a shoe is, almost literally, a pedestrian thing. Yet, coated in a bright and unexpected color, the outsole becomes decorative, an object of beauty. To 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 red outsole also affects the cost of the shoe, although perhaps not in the way Qualitex envisioned. Arguably, adding the red lacquered finish to a plain raw leather sole is more expensive, not less, than producing shoes otherwise identical but without that extra ornamental finish. Yet, for high 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.
Because the use of red outsoles serves nontrademark functions other than as a source identifier, and affects the cost and quality of the shoe, the Court must examine whether granting trademark rights for Louboutin’s use of the color red as a brand would “significantly hinder competition,” that is, “permit one competitor (or a group) to interfere with legitimate (nontrademark-related) competition through actual or potential exclusive use of an important product ingredient.”
The court found that it would hinder competition.
Fashion is dependent on colors. It is subject to temporal change. It is susceptible to taste, to idiosyncrasies and whims and moods, both of designers and consumers. Thus, at any moment when the market and the deities of design, by whatever fancy they decide those things, proclaim that “passion” is in for a given season and must be expressed in reds in the year’s various collections, Louboutin’s claim would cast a red cloud over the whole industry, cramping what other designers could do, while allowing Louboutin to paint with a full palette. [*455] Louboutin would thus be able to market a total outfit in his red, while other designers would not. And this impediment would apply not just with respect to Louboutin’s registered “the color red,” but, on its theory as pressed in this litigation, to a broader band of various other shades of red which would be available to Louboutin but which it could bar others from using.
Louboutin has now filed an appeal with the Second Circuit. See Christian Louboutin wants his red soles back. If I’m the bookie for this case, I’d give 20:1 odds that he loses. First of all, he’s appealing the denial of a preliminary injunction. That requires him to show that the lower court abused its discretion when issuing the denial. Second, the record seems quite clear that giving a fashion designer a monopoly over one color in a design would be as anticompetitive as letting one boat manufacturer have a monopoly on black engines.