One of the thorniest issues in trademark law is whether and when trademark law will protect the use of a single color. After all, there are an infinite number of colors, and it would hardly be fair if one company could obtain a theoretically perpetual right to exclude others from using a color. So, the law makes it difficult to achieve this.
Cases involving color marks are rare, but the Second Circuit released an important decision last week in Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc., (2nd Cir. 2012). The court held that Louboutin’s trademark, consisting of a red, lacquered outsole on a high fashion woman’s shoe (the “Red Sole Mark”), has acquired limited “secondary meaning” as a distinctive symbol that identifies the Louboutin brand, but (oddly) only where the red outsole contrasts with the color of the remainder of the shoe.
The heart of the decision is the court’s functionality analysis. Trademark law recognizes two types of functionality, “utilitarian” functionality, and “aesthetic” functionality. Utilitarian functionality occurs when a product feature is essential to the use or purpose of the article, or if it affects the cost or quality of the article. The court had no difficulty finding that the red outsole was not precluded from trademark protection by reason of utilitarian functionality, since the color serves no utilitarian purpose.
However, that did not end the inquiry. The court had to determine whether Louboutin’s Red Sole Mark was barred under the doctrine of “aesthetic” functionality.
In doing so, the court noted the “counterintuitiveness” of this inquiry: “how can the purely aesthetic be deemed functional, one might ask?” The court answered its own question by noting that “the doctrine of aesthetic functionality bars protection of a mark that is “necessary to compete in the [relevant] market.” A mark is “aesthetically functional, and therefore ineligible for protection under the Lanham Act, where protection of the mark significantly undermines competitors’ ability to compete in the relevant market.” The Red Sole Mark easily passed muster under this test.
The district court had applied a per se rule that assumed functionality (and therefore unenforceability) for color marks in the fashion industry. The Second Circuit disagreed, stating that Supreme Court precedent “requires an individualized, fact-based inquiry into the nature of the trademark, and cannot be read to sanction an industry-based per se rule.” After reviewing the record, and Louboutin’s extensive evidence supporting secondary meaning for the Red Sole Mark, the court concluded that the color mark could be asserted as a trademark only when used as a red outsole contrasting with the remainder of the shoe; it could not be used when both the sole and the remainder of the shoe were red.