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.

Is it Trademark Infringement to Make Your Own Fakes?

The Huffington Post is reporting that there is a run on a particular pantone of red paint in the United Kingdom.

Why red paint?

Faced with the high price of genuine Christian Louboutin designer pumps, some cash-strapped British wannabe fashionistas are painting the soles of their high heel shoes a specific shade of red, in a deliberate imitation of the designer's federally registered trademark.

In response to the Huffington Post article, I was asked the obvious question by many people:  "Is that practice legal in the United States?"

I had to pause to make sure that I was absolutely convinced that the following statement was really true:

"Yes.  This practice is absolutely legal in the United States."

Intentionally applying a counterfeit, imitation trademark to a product for one's own personal use, assuming that there is ZERO chance that the item will ever be sold or offered for sale to anyone -- is perfectly legal under current U.S. trademark laws.  It is perfectly legal to own, wear and proudly display a counterfeit product on one's own person.

The Lanham Act, codified at 15 U.S.C. § 1051 et seq., is the primary federal statute of trademark law in the United States.  The Lanham Act prohibits a number of activities, including trademark infringement, trademark dilution, false advertising and false designation of origin.

If someone were to offer a product for sale that infringes upon, dilutes or causes confusion with a protectable trademark or design, that person would be civilly (and possibly even criminally) liable under the Lanham Act for monetary damages and an injunction (a court order) against their continued conduct.  The goods can also be confiscated and destroyed.

In a case where I represented French designer Hermes of Paris, a 3-judge panel on the influential U.S. Court of Appeals for the Second Circuit in Manhattan unanimously wrote:

"Such a practice [of selling knockoffs] does harm the public, however, by creating post-sale confusion, not just among high-end consumers, but among the general public, which may believe that the knockoff is actually the genuine article.  In fact, high-end consumers may be less confused than the general public in the post-sale context because many of them will be aware of the existence of copies.  In either case, a loss occurs when a sophisticated buyer purchases a knockoff and passes it off to the public as the genuine article, thereby confusing the viewing public and achieving the status of owning the genuine article at a knockoff price."  Hermes Int'l et al. v. Lederer de Paris Fifth Avenue, Inc., et al., 219 F.3d 104, 106 (2d Cir. 2000).

But in each of its relevant prohibitions against knockoffs, the Lanham Act deliberately utilizes a key word -- commerce.

Absent some form of actual, intended or apparent "use in commerce," the imitation shoes that a person makes solely for their own personal use and display cannot be accused in a federal court as being an infringement, dilution or false advertising.

Indeed, that result is true even if the copycat shoes are admittedly designed to cause the third-party, "post-sale" consumer confusion that the Court of Appeals said is harmful.

Cheap knockoff shoes can also "dilute" the fame and power of a well-known brand (especially if the imitation shoes are lousy quality, which would "tarnish" the fame of the red-sole Louboutin trademark).

But the manufacture and use of personal copycat red soled shoes, assuming no use in commerce other than the mere act of a private person wearing them, is simply not illegal under current U.S. federal law.

That perverse outcome means that even if an ill-intentioned person were to manufacture many pairs of such shoes, for no commercial purpose other than to deceive their friends and onlookers into believing that they are fashionable enough to own a hundred pair, there is nothing the trademark owner can legally do to stop that person.

Perhaps the more interesting and unresolved question is...could a designer accuse a famous celebrity who chooses to wear knockoffs on the red carpet, of essentially "endorsing" the fake goods in an unlawful commercial manner?