The court puts its foot down - Fashion designer Christian Louboutin loses trademark protection in three countries for his distinctive red-soled shoes, leaving competitors free to follow in his footsteps.
Christian Louboutin, whose shoes along with Jimmy Choo, Gucci, Manolo Blahnik, Walter Steiger and Alexander McQueen is one of the most expensive and sought after shoe brands in the world, has just lost trademark protection for his distinctive red-soled shoes, in the Benelux, a three-county region including Belgium, the Netherlands and Luxembourg, in Western Europe.
The case, Christian Louboutin v. Van Dalen Footwear BV, AR 2013-6154 concerns infringement proceedings brought by Christian Louboutin against Van Dalen Footwear B.V. (a Netherlands retail store) for allegedly infringing its registered trademark by selling red-soled shoes. A court has cancelled Louboutin's registered trademark 0874489, granting Van Dalen's counterclaim for invalidity while denying Louboutin's infringement claim.
Judge Natalie Swalens of the Brussels District Court determined the decision March 20th last month, the court held firstly that Louboutin's trademark constitutes a shape mark rather than a colour mark. As such, it had to comply with the exclusions provided by article 3(1)(e) of the Trade Mark Directive, a provision of European trademark law that excludes the registration of any signs consisting of shapes that give substantial value to goods. The provision is intended to prevent the securing of a permanent monopoly in the technical, functional or aesthetic characteristics of a product or in the type of shape design which should be protected for a limited period of time, under design legislation, and thus, absent those rights should be free for other competitors to use.
Importantly, trademarks and designs have a different legal scope; trademarks enjoy protection that is unlimited in time, rights to designs are limited. Whereas a trademark seeks to protect the identity of the origin of the goods and services, designs seek to protect the goods (and the substantial value of their appearance) in their own right. Based on the evidence brought by Van Dalen Footwear (represented by Simmons & Simmons LLP,Amsterdam), the court found that the red sole gave the goods their substantial value, as consumers had stated that they would not have paid as much for their shoes if they had not had the red soles. As such, the red sole did not qualify for trade mark protection. Secondly, the court concluded that Louboutin's trademark lacks a distinctive character because red-soled shoes are common on the market, generally non-traditional trademarks for shapes and colours are only registrable if they have acquired distinctiveness through extensive use.
One would imagine that this comes as another blow to the iconic brand. From a business perspective, the case highlights yet again, the importance of the correct brand strategy for management of high end fashion brands. This is not the first time that the brands signature trademark has been invalidated in Europe. The French Supreme Court, Commercial Chamber, Christian Louboutin v. Zara France, Decision of 30 May 2012 also ruled that Christian Louboutin's trademark, representing a red sole, was invalid for lack of distinctiveness, It also rejected Louboutin's unfair competition claims, stating, that the reputation of Louboutin's red shoe soles rather relate to the concept than to the trademark, asserting that Louboutin could not claim a monopoly on the concept of having red soles on women's shoes, despite claims brought by Louboutin that by using red soles, Zara would be unduly benefiting from Louboutin's investments.
Interestingly, the Belgian approach and the French approach stand in contrast to the US position in Christian Louboutin SA v Yves Saint Laurent Am. Holding, Inc, US Court of Appeals, Second Circuit, No 11-3303-cv, 696 F.3d 206 (N.Y.) 5 September 2012. Where the US Court of Appeals held the red sole mark registered by Christian Louboutin to be valid and enforceable when limited to a red lacquered outsole contrasting with the colour of the rest of the shoe. This may because unlike the EU, The U.S offers a much more limited scope of protection for fashion designs, while countries in the EU have the availability of design protection for both registered and unregistered fashion designs under EU Design Regulation, as well as copyright protection for certain aspects of a design and also trademarks. The U.S does not offer the same tailored system of protection, and as such, the main source of protection available for fashion is through Trademarks.
This is one of the few court decisions addressing how fashion-industry participants may protect the distinctive features of their designs. The iconic brands monochromatic red sole shoes have been sold since 1992, and can sell for more than £4,000 a pair. The Louboutin case is a good illustration of the difficulties in registering aspects colour and shape marks as trademarks, and of protecting trade dress under trademark and unfair competition laws. Courts have shown themselves to be quite strict in determining the validity of non-traditional trademarks, and under the influence of European Union law, the case highlights that the requirements for the validity of non-traditional trademarks, such as shape marks is quite challenging.
In the world of fashion, how brands protect themselves across international boundaries is big business. One of the strongest appeals of luxury brands is the exclusivity and status that comes from owning a designer product, whether it be shoes, a bag or clothing that is instantly recognisable. In an industry where copying is rife, intellectual property and in particular trademark protection is usually a fashion brands most important and valuable asset.
Trademark loses for luxury brands mark the end of exclusivity.
The success of fashion is based on commercial strategies. It was only recently that Gucci lost the rights to use its iconic interlocking GG trademark in the UK. Trademark loses for luxury brands mark the end of exclusivity. If anyone can wear a red sole shoe then what makes it exclusive? The significance of this is huge, Not only do trademark loses dilute the significance of the brand, but mean the blurring of the boundaries of social class, through which fashion products become more readily available to everyone.
As brands strive harder to build exclusivity; it will be the consumer whom feels the impact most detrimentally.
Without the ability to claim exclusive use of the red sole, there’s little to separate the company’s products from its competition, this may spur more innovation from luxury brands in the form of their designs. But, as brands strive harder to build exclusivity; we suspect that it will be the consumer whom feels the impact most detrimentally.
With the financial stakes high, the question is whether Louboutin will appealing this case? The judgment if anything shows that Louboutin may have chosen the wrong strategy for the protection of its red soles. If Louboutin had registered a colour mark for the colour red, only for soles of high-heeled shoes in class 25, or gone down the design right route it may have had a more successful outcome in this case.