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Agenda. Functionality, Fair Use and Fashion: The Christian Louboutin v. Yves Saint Laurent Case. Color Trademarks.

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David H. Bernstein

Debevoise & Plimpton LLP

New York, New York, USA

September 8, 2012

Functionality, Fair Use and Fashion:

The Christian Louboutin v.

Yves Saint Laurent Case

Agenda

•Color Trademarks •Fair Use – Descriptive – Nominitive •Functionality – Utilitarian – Aesthetic – Color

Application to Louboutin v. YSL – Facts

– Defenses and Surveys – Irreparable Harm – Secondary Meaning – Likelihood of Confusion – Fair Use

– Functionality – District Court ruling – Court of Appeals decision

NutraSweet Co. v. Stadt Corp., 917 F.2d 1024 (7th Cir. 1990)

Color Trademarks

Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (1995)

Color Trademarks

Color and Secondary Meaning

• Proving Secondary Meaning in Color Trademarks • Advertising Focused on Color

• Long Period of Exclusive Use • Unsolicited Media Commentary • Customer/Dealer Declarations • Consumer Surveys

Blue

is the

Color of

Dreams

Limitations: Descriptive Fair Use

It is a defense to a claim of infringement if “the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, . . . of a term or device which is descriptive of and used fairly and in

good faith only to describe the goods or services of

such party, or their geographic origin. . . .” -- 15 U.S.C. § 1115(b)(4)

KP Permanent Make-Up, Inc. v. Lasting Impression I, 125 S. Ct. 542 (2004)

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Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002)

Limitations: Nominitive Fair Use

Limitations: Functionality

Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938)

TrafFix Devices v. Marketing Displays, 532 U.S. 23 (2001)

Utilitarian Functionality

Georgia-Pacific Consumer Products LP v. Kimberly-Clark Corp., 647 F.3d 723 (7th Cir. 2011)

Eco Mfg. LLC v. Honeywell Int’l Inc., 357 F.3d 649 (7th Cir. 2003)

Aesthetic Functionality

Wallace Int’l Silversmiths, Inc., v. Godinger Silver Art Co., 916 F.2d 76 (2d Cir. 1990)

Jay Franco & Sons, Inc. v. Clemens Franek, 615 F.3d 855 (7th Cir. 2010)

Color and Functionality

Green functional for farm

equipment -- Deere & Co. v. Farmhand, Inc., 560 F. Supp. 85 (S.D. Iowa 1982), aff’d,

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Functionality Standards

• Is the feature essential to the use or purpose of the product?

• Does the feature affect the cost or quality of the product?

• Would granting exclusivity through trademark put competitors at risk of a significant non-reputation-related disadvantage?

Louboutin v. YSL

Louboutin v. YSL

Key Facts

– Challenged shoes are monochromatic

Tribtoo

Palais Woodstock Tribute

– Challenged shoes come in a range of colors

Louboutin v. YSL

Key Facts

– Challenged shoes match the seasonal collection

Louboutin v. YSL

Key Facts

– YSL has used red soles since 1970s

Louboutin v. YSL

Key Facts

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Louboutin v. YSL

Key Facts

– Mr. Louboutin personally attended YSL fashion show in 2004 featuring YSL shoes with red soles

Taï Taï Lotus

Louboutin v. YSL

Key Facts

– Historical Use of Red Soles

Louboutin v. YSL

Key Facts

– Third Party Use of Red Soles

Galliano Dior Steffans Paciotti Chanel Marc Jacobs

Key Defenses

– Long delay undermines claimed irreparable injury – November 2010: Cruise collection launched – January 11, 2011: Demand letter sent – January 17, 2011: YSL rejects demands – April 7, 2011: Louboutin files suit

– Survey shows insufficient secondary meaning (<24%) – Survey shows no likelihood of confusion (<5%) – YSL’s use of red is a fair use

– Louboutin’s trademark is aesthetically functional

Louboutin v. YSL

Louboutin v. YSL

Secondary Meaning Survey

– Key Question: Do relevant consumers associate red sole (as registered)

exclusively with a single source or with

Louboutin v. YSL

– Misleading stimulus skews results (>50% confusion)

Likelihood of Confusion Survey

– When shoes are shown in real-world conditions (video), there is no likelihood of confusion (<5%)

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Key Defenses

– YSL’s use of red is a fair use

– YSL does not use red sole as a “mark”

– YSL uses red (and green, blue, yellow, purple, etc.) fairly to describe the shoe as being monochromatic and to match with the season’s collection – Louboutin’s trademark is functional

– Alleged trademark cannot be enforced – Registration should be cancelled

Louboutin v. YSL

Louboutin v. YSL

Deposition testimony – Mr. Louboutin refused to

specify which shades of red were off-limits to competitors – Mr. Louboutin now

objected to some prior year designs, but never objected previously – Mr. Louboutin himself

couldn’t decide whether certain models of YSL shoes infringed his rights

Louboutin v. YSL: District Court

Christian Louboutin S.A. v. Yves Saint Laurent, 778 F. Supp. 2d 445 (S.D.N.Y. 2011)

Key Rulings

– Louboutin’s mark is likely not entitled to trademark protection because it is ornamental and functional – Single color applied

to entire surface of article of apparel cannot constitute a valid mark

Louboutin v. YSL: Court of Appeals

Oral Argument held January 24, 2012

Louboutin v. YSL: Court of Appeals

Decision issued September 5, 2012

• Rejects district court’s “per se” rule against trademark protection for a single color for fashion items because aesthetic functionality is a fact-intensive inquiry • Louboutin’s red outsole is entitled to protection only

when it contrasts with the color of the rest of the shoe • YSL did not “use” Louboutin’s trademark (as limited to contrasting colored shoes) and therefore did not infringe

– Court did not reach YSL’s fair use or functionality defenses, or its defense that confusion was not likely – YSL free to produce monochromatic red shoes • Case remanded to district court to allow YSL to pursue its

counterclaims against Louboutin for cancellation and tortious interference

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Functionality After Louboutin v. YSL

• Utilitarian Functionality: Is the feature essential to the use or purpose of the product?

• Utilitarian Functionality: Does the feature affect the cost or quality of the product?

• Aesthetic Functionality: Would extending protection to the ornamental features significantly limit the range of competitive designs available and significantly undermine a competitor’s ability to compete in the relevant market?

References

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