On Wednesday, the United States Court of Appeals for the Second Circuit issued a detailed written opinion both affirming and reversing portions of the District Court's opinion in the epic Christian Louboutin v. Yves St. Laurent fight over red soled shoes.
To recap, Louboutin sued YSL for selling monochromatic red shoes, which included the use of red soles. Louboutin owns a registered federal trademark covering the use of red soles on footwear.
The Second Circuit agreed that Louboutin had demonstrated that it had acquired distinctiveness for the use of red soled shoes, with a notable exception: The Court held that Louboutin had NOT demonstrated distinctiveness was acquired in monochromatic (all red) red soled shoes.
The Second Circuit essentially dismissed several examples of Louboutin red/red shoes as essentially too few to demonstrate secondary meaning, and ordered that Louboutin's trademark be "rectified" to include this novel limitation.
As an initial matter, the Lanham Act empowers "the Court" to correct registrations to correct errors. It is not clear that "the Court" contemplated by the federal statute was intended to include an Appeals Court selectively amending trademarks as it sees fit, unless the District Court had made a factual finding that such a limitation is warranted and supported by the record.
Here, the District Court had made no such finding and had dismissed the case on broader grounds, which the Appeals Court did not need to reach. Therefore, there is some question as to whether the Circuit Court even had the power it chose to exercise to conveniently dispose of the case.
Second, the Appeals Court's backhanded dismissal of Louboutin's red soled shoe trademark as used on monochromatic shoes was belied by the record which demonstrated that Louboutin had, indeed, used red soles on monochromatic shoes, and that there was even evidence of confusion in Louboutin's consumer survey. The Circuit Court just dismissed that evidence out of hand, but not very persuasively.
Therefore, the Second Circuit's reasoning reads like an example of "bad facts making bad law." The end result is neither satisfying logically or legally, but disposed of a tough case with an equitable result.
In the end, it is my personal opinion that YSL should never have been sued to begin with, until and unless Louboutin had acquired an incontestable trademark that had been successfully asserted against other, more willful targets first.
If that clear record of a tested trademark had been before the Court, it would have been much more difficult to let YSL walk away unscathed, as it did.
So, where does that leave the public? Well, the Second Circuit clarified that color can serve as a trademark in fashion, just as in other areas of law, and rejected the lower court's unprecedented "per se" bar against the use of color in fashion. That, in my personal opinion, was a good start.
It is good law that color can and does function as a trademark in fashion no less than in other industries.
However, the remainder of the opinion did little to add value to the body of precedent on aesthetic functionality, or what level of secondary meaning is necessary to protect color as a trademark.
So, in the end, YSL walked away unscathed, Louboutin kept his (modified) trademark, and we are left with a rule of law that suggests that brand owners' lawyers should take better care selecting their litigation targets.