"Champagne" Tastes Trigger Trademark Disputes with Apple, Others

For decades, the Comité Champagne, a French industry trade organization dedicated to protecting the French Champagne region's world famous vintners, have aggressively policed the marketplace and prosecuted any unauthorized use of the word "champagne." 

Such is the reason that the bottle of California's slightly cheaper bubbly you may have opened on New Year's Eve was termed "sparkling white wine," and not "champagne."

According to the Comité's website, the "reputation and importance of the Champagne appellation has long been a source of envy for other producers, spawning hundreds of imitations every year...Champagne is a unique product born of the shared heritage of Winegrowers and Champagne Houses whose livelihoods depend on protecting that heritage."

The website claims that the Comité has a "duty to protect consumers against misleading claims made for any wines, beverages or products that trade off Champagne’s reputation as an appellation of guaranteed origin and quality."

The Champagne Regions of France

Accordingly, it is the stated policy of the Comité Champagne  to prosecute anyone who misappropriates the reputation or identity of the Champagne appellation.

It seems perfectly reasonable for the Comité to try and thwart counterfeit champagne beverages, and is has done so very effectively.

However, the Comité also seems to take its role as defender of the appellation so seriously that it attacks any uses of the word "champagne" to describe color or style, even when not used in connection with beverages.

Most recently, for example, Apple introduced the new iPhone 5 series, in a metallic gold color initially planned to be described as "champagne."

However, the Comité saw fit to send a warning letter to Apple before the phone was launched, contending that the term "champagne" was a trademarked geographic designation, and that Apple's use would inevitably lead to litigation.  Apple backed off, and now simply calls the color "gold."

The Wall Street Journal now reports that the Comité is at it again, this time threatening a glass bottled water distributor that had planned on using the tagline: "the Champagne of waters."

Not wanting to fight a lawsuit, the distributor dropped the tag line.

The Gold/"Champagne" iPhone

In the past, the Comité has also successfully barred the use of the term ‘Champagne’ in connection with unauthorized toothpastes, mineral water for pets, toilet paper, underwear and shoes.

But is such aggressive policing of the wider marketplace really necessary?

Traditionally, brand protection advocates would argue that it is critical to protect the marketplace against any and all unauthorized uses, even those outside of the core area of protection.

Failure to do so, they warn, could lead to the most dreaded outcome: "genericide" and ultimate abandonment of the trademark itself.

Examples of once famous trademarks that have fallen victim to such a fate include aspirin, yo-yo, escalator, kerosene, zipper, cellophane and thermos.

But in none of these instances did the widespread unauthorized usage that led to the trademarks' destruction start outside of the core market, leading to the slippery slope of genericide that brand owners dread.

Rather, the trademark owners were simply so successful in their core market, everyone else adopted the term to describe the product category itself.  Eventually, no one knew that any particular thermos originated from one source or manufacturer.

It is that fear that drives makers of Kleenex-brand tissues, Xerox-brand copiers and Band-Aid brand bandages, to frequently remind us that their products are brands, not the names of generic products.

Brand protection advocates must carefully balance their clients' important need to protect against trademark erosion, and the wider realities of the marketplace.

T-Mobile Sues AT&T Subsidiary Over Use of the Color Magenta

In a recently-filed federal lawsuit against AT&T subsidiary Aio Wireless, telecommunications giant T-Mobile alleges that Aio Wireless deliberately chose the color magenta to advertise, promote and market a competing product, and in doing so, violated the trademark laws and committed unfair competition.

“With full knowledge of T-Mobile’s use of magenta, AT&T’s subsidiary chose — out of all the colors in the spectrum — magenta to advertise, market and promote its wireless services in direct competition with T-Mobile,” the complaint alleges.

“Aio does not use the orange coverage map of its parent company, but instead uses in its stores and on its website a magenta coverage map that is strikingly similar in color to the one used by T-Mobile."

However, what exactly is the "magenta" shade that T-Mobile uses, and does T-Mobile really own it as a trademark?

T-Mobile has undoubtedly been aggressive protecting magenta as a key part of its brand.  

In 2008, it hand delivered a cease and desist letter to Engadget, demanding the immediate discontinuance of the use of the color magenta in connection with Engadget Mobile.

In the more recent fight with Aio, T-Mobile's court filings reference a number of trademark registrations issued to its parent Deutsche Telekom AG for the color magenta alone, "which is the approximate equivalent of pantone matching system rhodamine red u, used on the background of product displays and advertisements found in a store."

However, the Washington Post notes that this trademark translates to hex #c63678 in the pantone color coding system.  The Post's reporters also noted that Aio's version of "magenta" maps to #960051.  In other words, not all magentas are the same, and it will be up to the District Court to sort out if there is a viable claim of infringement here.


But can T-Mobile really lay legal claim to a color to begin with?


The answer is absolutely, as a matter of established U.S. trademark law.  Colors can function as powerful indicators of source, when they are not serving a functional purpose.  A unanimous U.S. Supreme Court definitively pronounced on the subject in 1995, finding that colors could acquire distinctiveness over time, and serve the purpose of a trademark.  As we have also discussed, however, how this regime applies to individual cases is tricky.

For example, the color candy apple red as applied to shoe soles was registered as a trademark by Christian Louboutin, but was later limited by the Second Circuit Court of Appeals when Louboutin sought to stop Yves St. Laurent's sale of monochromatic red shoes.

Both Sides Declare Victory in Red Sole Battle: But Did the Public Lose?

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.

Over 20,000 Pairs of Red Soled Shoes Seized by U.S. Customs in Los Angeles

Photo Provided by CBP Photographer Josh Denmark

U.S. Customs and Border Patrol agents stationed at a port in Los Angeles seized 20,457 pairs of fake Christian Louboutin shoes shipped from China, U.S. officials said Thursday.

The counterfeit "red soled" shoes had a domestic value of over $50,000, but would have fetched over $18 million if they had reached the streets, according to U.S. Customs and Border Protection officials.

In 2011, Christian Louboutin filed a trademark infringement lawsuit against designer Yves Saint Laurent, involving the red sole trademark.

However, in August 2011, U.S. District Court Judge Marrero in the Southern District of New York (Manhattan) denied the designer's Motion for a Preliminary Injunction.

The judge questioned the validity of the red sole trademark, writing, "Louboutin's claim would cast a red cloud over the whole industry, cramping what other designers do, while allowing Louboutin to paint with a full palette."

The District Court's denial of Louboutin's Preliminary Injunction application is currently pending on appeal before the U.S. Court of Appeals for the Second Circuit.