20 February, 2018

A Sole of Color - Louboutin Red Shoe Sole Potentially Possible to Register as TM, Says AG Szpunar

After discussing the Louboutin shoe sole case some time ago, one envisioned the matter going ahead to the CJEU without a hitch. Unbeknownst to this writer, the CJEU decided to assess the case in the Grand Chamber (essentially en banc), and therefore the matter went into further hearings. Having concluded, the case was then passed onto Advocate General Szpunar for his opinion, which he handed down very recently. Even though the AG had given their opinion before, this is still an important consideration ahead of the Grand Chamber decision in the future.

As a quick primer, the case of Christian Louboutin v Van Haren Schoenen BV dealt with a registered Benelux trademark owned by Louboutin (TM No. 0874489) for a high-heeled shoe with a red sole. The mark only encompassed the sole, not the entire shape of the shoe. Van Haren had been selling a similar shoe since 2012, and was sued for trademark infringement by Louboutin. Van Haren then counterclaimed for invalidity.

The crux of the case falls on whether the red sole is a registrable trademark, and therefore enforceable.

In his initial opinion last year the AG considered that a sign combining colour and shape, like the Louboutin red sole, is potentially caught by the prohibition contained in Article 3(1)(e)(iii) of Directive 2008/95. This meant that the Article should be interpreted as being capable of applying to a sign consisting of the shape of a product and seeking protection for a certain colour. Even so, he did determine that the mark in question should be "…equated with a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than one consisting of a colour per se". The ultimate classification of the mark, however, should be made by the referring court, and not the CJEU.

Similarly, the decision on whether the mark exclusively 'gives substantial value' to the goods, which is prevented from being registered under Article 3 above, is for the referring court. The AG did clarify this and considered that the matter "…relates exclusively to the intrinsic value of the shape and must take no account of the attractiveness of the goods… and does not permit the reputation of the mark or its proprietor to be taken into account".

The AG wanted to expand on his considerations on a number of points, including the classification of the mark, applicability of Article 3 and classification of the mark with reference to Article 3.

In his view the shape is not "…wholly abstract or of negligible importance, which could justify the finding that the mark at issue seeks protection for a certain colour per se, without any spatial delimitation". The focus is on the shape of the sole. The AG doubts that the color red can perform the essential function of a trade mark and identify its proprietor where that colour is used out of context, i.e. the shape of the sole. He concluded that, following his earlier opinion, that "…the mark… should be equated with a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than as a trade mark consisting of a colour per se".

The AG then moved onto his additional considerations in relation to the applicability of Article 3(1) of the Directive to signs consisting of the shape of the goods and a certain colour.

Dave's shoe innovations definitely skirted the line of registrability
The point revolved around whether the mark can be classified as a 'position mark' under the Implementing Regulation 2017/1431, and whether this prevents the mark from falling under Article 3(1) of the Directive. As the Article does not define what 'shapes' fall in its remit, position marks would not be excluded from being invalid under the provision. The AG considered that this had no bearing on his earlier opinion.

The second main point dealt with by the AG related to the scope of Article 3(1) when compared to Article 4(1)(e)(iii) of Directive 2015/2436.

The 2015 Directive replaced the 2008 Directive, and with no transitional provisions over both, the AG considered that they would cover the same marks (although the former did make changes e.g. to the provisions around the 'own name' defence). The AG determined that any changes would not interfere with the mark's registrability under the 2008 Directive, with Article 3(1) still "…being interpreted to the effect that that provision applies to signs consisting of the shape of the goods which seek protection for a certain colour".

The AG had to then expand on the rationale underlying the ground for refusal or invalidity in Article 3(1).

Following new arguments from both sides, while sympathetic to the pro-registrant argument, the AG set out that, as per the decision in Hauck GmbH & Co KG v Stokke A/S, the assessment to determine whether a shape 'gives substantial value to the goods "…involves account being taken of the average consumer’s perspective [of the aesthetic characteristics]". This perception isn't, however, the decisive element in the assessment, but "…account must be taken both of the perception of the sign at issue by the relevant public and the economic effects which will result from reserving that sign to a single undertaking".

It is important, in the AG's mind, for "…a characteristic to remain available for all market participants over the period during which that characteristic has a particular effect on the value of the goods". Once interest has weaned, it is possible for that characteristic to be registrable as a trademark and not fall under Article 3(1). Unlike the two other prohibitions in Article 3(1), this prohibition is dependent on external factors, e.g. interest and the public's perception of value in the shape, and could catch even a registration of a shape for a certain color.  This would, however, "…exclude the characteristics linked to the reputation of the trade mark or its proprietor" as a part of the assessment. This would shift the assessment from one that includes reputation, to one where the value of the shape of the mark is the only factor that matters, i.e. a more notable brand could still register marks like the sole in question.

In summary: "…the reference to the public’s perception as a factor which, among others, determines the characteristics giving substantial value to the goods argues in favour of Article 3(1)… being interpreted as meaning that that provision applies to signs consisting of the shape of the goods and seeking protection for a colour in relation to that shape".

Finally, the AG moved onto the classification of the mark with reference to Article 3(1)(b) of the 2008 Directive.

The AG considered that this would be useful for the CJEU in case they find that Article 3(1)(e) cannot be applied in this case. In summary, the AG determined that "…when analysing the distinctive character of a sign which is indissociable from the appearance of the goods in question, it is necessary to assess whether the registration of that sign would run counter to the general interest that the availability of the characteristics represented by that sign should not be unduly restricted for other operators offering for sale goods or services of the same type. However, Article 3(1)(b)… cannot fully assume the role of Article 3(1)(e)(iii) of that directive, since it is possible to derogate from that first provision in accordance with the detailed rules laid down in Article 3(3) of that directive". This means that, when assessing a mark's distinctiveness under Article 3(1)(b) that cannot be separated from the goods it is used on (like the bottom sole of a shoe), one has to keep in mind whether it could be an anti-competitive registration of goods of a similar type.

The opinion lays down the foundation for the CJEU's decision later this year, but doesn't by any means close the door on Louboutin's registration. Ultimately this will be determined by the guidelines set by the CJEU, and should the proprietor's reputation be separated from the assessment of value, it is possible for the mark to not be invalid under Article 3(1). This writer keenly awaits the CJEU's decision, as it will undoubtedly have a big impact on similar registrations in the future.

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