696 F.3d 206 (2nd Cir. 2012), 11-3303-cv, Christian Louboutin S.A. v. Yves Saint Laurent America Holdings, Inc.

Docket Nº:11-3303-cv.
Citation:696 F.3d 206, 103 U.S.P.Q.2d 1937
Opinion Judge:JOS
Party Name:CHRISTIAN LOUBOUTIN S.A., Christian Louboutin, L.L.C., Christian Louboutin, Plaintiffs-Counter-Defendants-Appellants, v. YVES SAINT LAURENT AMERICA HOLDING, INC., Yves Saint Laurent S.A.S., Yves Saint Laurent America, Inc., Defendants-Counter-Claimants-Appellees, Yves Saint Laurent, (an unincorporated association), John Does, A to Z, (Unidentified)
Attorney:Harley I. Lewin (Lee Carl Bromberg and Charles D. Ray, on the brief), McCarter & English, LLP, New York, NY, Boston, MA, Hartford, CT, for Plaintiffs-Counter-Defendants-Appellants Christian Louboutin S.A., Christian Louboutin, L.L.C., Christian Louboutin. David H. Bernstein (Jyotin Hamid and Rayn...
Judge Panel:Before: CABRANES, STRAUB, and LIVINGSTON, Circuit Judges.
Case Date:September 05, 2012
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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696 F.3d 206 (2nd Cir. 2012)

103 U.S.P.Q.2d 1937

CHRISTIAN LOUBOUTIN S.A., Christian Louboutin, L.L.C., Christian Louboutin, Plaintiffs-Counter-Defendants-Appellants,

v.

YVES SAINT LAURENT AMERICA HOLDING, INC., Yves Saint Laurent S.A.S., Yves Saint Laurent America, Inc., Defendants-Counter-Claimants-Appellees,

Yves Saint Laurent, (an unincorporated association), John Does, A to Z, (Unidentified), Jane Does, A to Z, (Unidentified), XYZ Companies, 1 to 10, (Unidentified), Defendants-Appellees.

No. 11-3303-cv.

United States Court of Appeals, Second Circuit.

September 5, 2012

Argued: Jan. 24, 2012.

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Harley I. Lewin (Lee Carl Bromberg and Charles D. Ray, on the brief), McCarter & English, LLP, New York, NY, Boston, MA, Hartford, CT, for Plaintiffs-Counter-Defendants-Appellants Christian Louboutin S.A., Christian Louboutin, L.L.C., Christian Louboutin.

David H. Bernstein (Jyotin Hamid and Rayna S. Feldman, on the brief), Debevoise & Plimpton LLP, New York, NY, for Defendants-Counter-Claimants-Appellees Yves Saint Laurent America Holding, Inc., Yves Saint Laurent S.A.S., and Yves Saint Laurent America, Inc., and Defendants-Appellees Yves Saint Laurent, (an unincorporated association), John Does, A to Z, (Unidentified), Jane Does, A to Z, (Unidentified), XYZ Companies, (Unidentified).

Janet L. Cullum (John W. Crittenden, Cooley LLP, San Francisco, CA, and Susan J. Hightower, Pirkey Barber LLP, Austin, TX, on the brief), Cooley LLP, New York, NY, for amicus curiae International Trademark Association, in support of Plaintiffs-Counter-Defendants-Appellants.

Richard Z. Lehv (Jason D. Jones on the brief), Fross Zelnick Lehrman & Zissu, P.C., New York, NY, for amici curiae Tiffany (NJ) LLC and Tiffany & Co., in support of Plaintiffs-Counter-Defendants-Appellants.

Rebecca Tushnet, Professor of Law, Georgetown University Law Center, Washington, D.C., on the brief, for amici curiae Professors of Law in Trademark and Related Fields, in support of Defendants-Counter-Claimants-Appellees.

Before: CABRANES, STRAUB, and LIVINGSTON, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge:

The question presented is whether a single color may serve as a legally protected trademark in the fashion industry and, in particular, as the mark for a particular style of high fashion women's footwear. Christian Louboutin, a designer of high-fashion women's footwear and accessories, has since 1992 painted the " outsoles" of his women's high-heeled shoes with a high-gloss red lacquer. In 2008, he registered the red lacquered outsole as a trademark

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with the United States Patent and Trade Office (" PTO" ).1 We are asked to decide whether that mark is protectable under federal trademark law.

Louboutin, Christian Louboutin S.A., and Christian Louboutin, L.L.C. (jointly, " Louboutin" ), bring this interlocutory appeal from an August 10, 2011 order of the United States District Court for the Southern District of New York (Victor Marrero, Judge ) denying a motion for a preliminary injunction against alleged trademark infringement by Yves Saint Laurent America Holding, Inc., Yves Saint Laurent S.A.S., and Yves Saint Laurent America, Inc. (jointly, " YSL" ). The District Court, in addressing a difficult and novel issue of trademark law, held that, because a single color can never be protected by trademark in the fashion industry, Louboutin's trademark was likely not enforceable. It therefore declined to enter a preliminary injunction to restrain YSL's alleged use of the mark.

We conclude that the District Court's holding that a single color can never serve as a trademark in the fashion industry, Christian Louboutin S.A. v. Yves Saint Laurent America, Inc., 778 F.Supp.2d 445, 451, 457 (S.D.N.Y.2011) ( " Louboutin " ), is inconsistent with the Supreme Court's decision in Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 162, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995) (" Qualitex " ), and that the District Court therefore erred by resting its denial of Louboutin's preliminary injunction motion on that ground. We further conclude that Louboutin's trademark, which covers the red, lacquered outsole of a woman's high fashion shoe, has acquired limited " secondary meaning" as a distinctive symbol that identifies the Louboutin brand. As explained below, pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119, we limit the trademark to uses in which the red outsole contrasts with the remainder of the shoe (known as the " upper" ). We conclude that the trademark, as thus modified, is entitled to trademark protection. Finally, we conclude that, because the monochrome design employed by YSL is not a use of Louboutin's modified trademark, we need not, and indeed should not, address whether YSL's use of a red outsole risks consumer confusion or whether the Louboutin mark, as modified, is " functional."

We therefore (1) affirm in part the order of the District Court, insofar as it declined to enjoin the use of all red lacquered outsoles; (2) reverse in part the order of the District Court insofar as it purported to deny trademark protection to Louboutin's use of contrasting red lacquered outsoles; and (3) enter judgment accordingly. We remand for further proceedings with regard to YSL's counterclaims.

BACKGROUND2

This appeal arises out of an action for injunctive relief and enforcement of a trademark brought by Louboutin, together with the corporate entities that constitute his eponymous French fashion house,

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against YSL, a venerable French fashion institution. Louboutin is best known for his emphasis upon the otherwise-largely-ignored outsole of the shoe. Since their development in 1992, Louboutin's shoes have been characterized by their most striking feature: a bright, lacquered red outsole, which nearly always contrasts sharply with the color of the rest of the shoe.

Christian Louboutin introduced his signature footwear to the fashion market in 1992. Since then, his shoes have grown in popularity, appearing regularly on various celebrities and fashion icons. The District Court concluded, and YSL does not dispute, that " Louboutin [had] invested substantial amounts of capital building a reputation and good will, as well as promoting and protecting Louboutin's claim to exclusive ownership of the mark as its signature in women's high fashion footwear." Louboutin, 778 F.Supp.2d at 447. The District Court further found that Louboutin had succeeded in promoting his shoes " to the point where, in the high-stakes commercial markets and social circles in which these things matter a great deal, the red outsole became closely associated with Louboutin. Leading designers have said it, including YSL, however begrudgingly." Id. at 447-48. As a result of Louboutin's marketing efforts, the District Court found, the " flash of a red sole" is today " instantly" recognizable, to " those in the know," as Louboutin's handiwork. Id. at 448.

On the strength of the fashion world's asserted recognition of the red sole, Louboutin on March 27, 2007 filed an application with the PTO to protect his mark (the " Red Sole Mark" or the " Mark" ). The trademark was granted in January 2008, and stated: " The color(s) red is/are claimed as a feature of the mark. The mark consists of a lacquered red sole on footwear." Id. at 449 (capitalization altered). The written description was accompanied by a diagram indicating the placement of the color:

(Image Omitted)

In 2011, YSL prepared to market a line of " monochrome" shoes in purple, green, yellow, and red. YSL shoes in the monochrome style feature the same color on the entire shoe, so that the red version is all red, including a red insole, heel, upper, and outsole. This was not the first time that YSL had designed a monochrome footwear line, or even a line of footwear with red soles; indeed, YSL maintains that since the 1970s it had sold such shoes in red and other colors.

In January 2011, Louboutin avers, his fashion house learned that YSL was marketing and selling a monochrome red shoe with a red sole. Louboutin requested the removal of the allegedly infringing shoes from the market, and Louboutin and YSL briefly entered into negotiations in order to avert litigation.

The negotiations having failed, Louboutin filed this action on April 7, 2011, asserting claims under the Lanham Act, 15 U.S.C. § 1051 et seq., for (1) trademark infringement and counterfeiting, (2) false designation of origin and unfair competition, and (3) trademark dilution, as well as state law claims for (4) trademark infringement, (5) trademark dilution, (6) unfair competition, and (7) unlawful deceptive acts and practices. Louboutin also sought a preliminary injunction preventing YSL from marketing, during the pendency of the action, any shoes, including red monochrome shoes, bearing outsoles in a shade of red identical to the Red Sole Mark, or in any shade which so resembles the Red Sole Mark as to cause confusion among consumers.

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In response, YSL asserted two counterclaims: (1) seeking cancellation of the Red Sole Mark on the grounds that (a) it is not " distinctive," 3 but instead merely " ornamental," 4 (b) it is " functional," 5 and (c) it was secured by fraud on the PTO; and (2) seeking damages for (a) tortious interference with business relations and (b) unfair competition. On July 22, 2011, after a limited and expedited discovery process, the parties argued the preliminary injunction motion. As noted above, see note 2, ante, the District Court did not hold an evidentiary hearing.

On August 10...

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