Well Red - Louboutin's Red Shoe Sole TM is Registrable, Says CJEU

The build-up with the Louboutin red sole case has been quite extensive and unique in that Advocate General Szpunar had to give not one, but two opinions on the case ahead of the CJEU's decision (discussed more here and here). There was some degree of uproar with the latest opinion, and hence many trademark practitioners have been salivating at the prospect of the CJEU decision, which could have quite a bit of an impact on the current trademarks regime in Europe. With that in mind, the decision has finally been released by the CJEU earlier this week.

Even though the facts of Christian Louboutin v Van Haren Schoenen BV have been discussed extensively on this blog, they are worth revisiting. The matter concerned a trademark registration (TM 0874489) in Benelux for a red colored sole on a women's high-heeled shoe by Christian Louboutin. The mark consisted of the color on the sole of the shoe, but did not take into account the contours of the shoe, which only served an illustrative purpose on the positioning of the mark. Van Haren sold a similar red soled shoe in the Netherlands, for which they were sued by Louboutin for trademark infringement. The mark was contested by Van Haren, and ultimately ended up with the CJEU.

The referring court asked, in essence, "…whether Article 3(1)(e)(iii) of Directive 2008/95 must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… consists exclusively of a ‘shape’, within the meaning of that provision".

Stephanie had to forget her 'totally unique' shoe design
after the decision

The Court initially affirmed that EU legislation generally accepts that the 'shape' of a trademark within the meaning of Article 3(e), means a set of lines or contours that outline the product concerned, potentially excluding any colors that don't have an outline defining said 'shape'. Any marks that merely consist of that shape would be deemed invalid.

Nonetheless, the Court did determine that "…while it is true that the shape of the product or of a part of the product plays a role in creating an outline for the colour, it cannot, however, be held that a sign consists of that shape in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product". This would exclude any signs that merely apply a color to an apparent shape from the remit of Article 3(e), such as the shoe in the Louboutin trademark.

If the shape of the shoe is excluded from the mark, the Court considered that the mark therefore could not exclusively consist of a shape, as the main element of that sign is a specific colour designated by an internationally recognised identification code (in this instance Pantone 18‑1663TP).

In short, the Court concluded that "…Article 3(1)(e)(iii)… must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… does not consist exclusively of a ‘shape’, within the meaning of that provision".

The case is quite important, as the registration of a trademark for a color, excluding any shape that is used to illustrate the placement of the color, would be allowed under the ruling. The decision completely ignored the AG's considerations of reputation and the addition of value through the introduction of the mark, which were the main points that many found contentious. Whether this omission will be challenged in future case law remains to be seen.

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.

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.

Seeing Red - Registration of Red Shoe Sole Potentially Invalid, Says AG Szpunar

The color of a product or a logo can often be just as memorable as its shape, design or quality. When you think of a Coca Cola bottle, do you think of the color red? If you see a chocolate bar draped in purple, do you think of Cadbury? Colors are a great differentiator, and the more striking the color the more you tend to probably remember it. That's why many companies register a particular color as a trademark in relation to their goods or services, protecting that very association from competitors. In a similar vein, could you register a trademark that incorporates a color with your product, for example in conjunction with a shoe? A recent case involving this has been going through the European courts, and the Advocate General has finally given their two cents on the matter ahead of the CJEU's decision.

The case of Christian Louboutin SAS v Van Haren Schoenen BV concerns the registration of a mark in Benelux by Louboutin, comprising of a high-heel shoe with a red sole. Only the sole was registered. Van Haren made and sold similar red-soled shoes, and upon identifying this, Louboutin took the company to court for trademark infringement. Van Haren challenged the infringement opposing the mark's registration, claiming invalidity. Having made its way through the Dutch courts, the case ultimately ended up with the CJEU, and prior to their judgment Advocate General Szpunar aimed to give the court guidance on the issue.

The question referred to the Court was "[i]s the notion of ‘shape’ within the meaning of Article 3(1)(e)(iii) of Directive 2008/95... limited to the three-dimensional properties of the goods, such as their contours, measurements and volume (expressed three-dimensionally), or does it include other (non three-dimensional) properties of the goods, such as their colour?" In essence, the question asks whether a 'shape', as defined in the Directive, can include colors as well as the actual three-dimensional shape of an object.

The Advocate General first considered the classification of the mark and its impact on the registration. He determined that the classification of the contested mark is a factual assessment to be made by the referring court. That consideration does not prevent the CJEU from making remarks which may guide that court in making its assessment. He also saw that the classification of the goods does not necessarily have any legal consequences regarding the goods. Even if the mark is a 'position mark', which some parties argued it was, it doesn’t prevent that mark from consisting of the shape of the goods (i.e. the color). He then concluded that "…it is for the referring court to determine whether the mark at issue in the present case is a per se colour mark or a mark consisting of the shape of the goods, but also seeking protection for a colour".

To determine whether the mark is a color mark per say, or consists of the shape of the goods, as defined in the Directive, the Advocate General set out the test as "…the referring court should carry out an overall assessment, taking into account the graphic representation and any descriptions filed at the time of application for registration, as well as other material relevant to identifying the essential characteristics of the contested mark, where applicable". One would also have to account for whether the mark was registered as for the color only, or if the shape was incorporated in the registration as a part of the color.



The CJEU could impede Cindy's new color schemes 

The Advocate General rejected that the color, albeit restricted from applying to a particular shape, would not in itself limit the mark to simply a color mark. Instead "…what must be determined is whether the sign derives its distinctive character from the colour in respect of which protection is sought per se, or from the exact positioning of that colour in relation to other elements of the shape of the goods". Therefore the Advocate General accepts that it is possible for the mark to apply to the position of the color as well.

When considering the actual mark that was registered, the Advocate General saw that, even though the contours of the shoe were not a part of the registered mark, its placement on the shoe was very relevant. The mark sought to protect simply a red sole on any high-heeled shoe, irrespective of its shape. He finally thought that "…[t]he contours of the sole appear in any event to be a negligible element of the mark, which derives its distinctive character from the unusual positioning of the coloured element and, potentially, the colour contrast between different parts of the shoe".

Although the Advocate General considered that the mark, at least on the outset, would be one that consists of a shape in conjunction with the color, he still aimed to analyse both possible outcomes in more depth.

Firstly, whether the mark consists of a color per say. As established in previous cases, colors per say don't have distinctive character; however, they may become distinctive through use. The registration, even so, shouldn't prevent other proprietors from using the color for goods of a similar type. The Advocate General ultimately concluded that "…if the contested mark were to be classified as a ‘mark consisting of a colour per se’, it would be appropriate to hold that it did not fall within the scope of Article 3(1)(e)".

Secondly, whether the mark consisting of the shape of the goods and of a certain colour. The Advocate General set out that, to answer whether a mark consists of both the shape and the color applied to it, one has to heed the logic and scheme of Article 3(1)(e), i.e. to prevent the registration of marks that would impede fair competition. The Advocate general considered that any shape that incorporates color in the mark would have to be analysed under Article 3(1)(e) as a part of the overall assessment of the sign. This would apply even under the new Directive.

He concluded that "… Article 3(1)(e) of [the] Directive… does potentially apply to signs consisting of the shape of the goods which seek protection for a certain colour". The mark in question would also be, in his view, potentially caught by the Article and therefore invalid. He also observed that, while the color potentially does add value to the mark (and potentially falls under Article 3(1)(e)(iii)), the value added only relates to the intrinsic value of the shape (for example, is it commonly used and therefore valuable) and not the reputation of the proprietor or the mark.

The Advocate General clearly sets the stage for the CJEU to find that color marks applied to a particular shape would be invalid, as the protection of a color to an indeterminate amount of soles could prevent fair competition. Less conventional trademarks could be hindered by a negative decision by the CJEU, and it remains to be seen how they navigate this paradigm in the light of the expansion of registrations through the new Directive 2015/2436. Should the shape be taken into account the mark could survive, but it looks like Louboutin might have to simply rely on their goodwill in passing off in the future.