At the intersection of patent and trademark law is the functionality doctrine and its much maligned derivative–aesthetic functionality. This doctrine has been largely dormant over the past decade, but like fashion, it cycled back into style in 2011 and was considered by many to be one of the hottest intellectual property topics of the year. This increase in popularity was due in large part to a legal battle involving women’s shoes.
Shoe Conflict Erupts Over Red Soles
The controversy pitted two fashion powerhouses against each other. On one side is Christian Louboutin, an iconic footwear designer who has a federally registered trademark for his shoes’ signature lacquered red sole. On the other side is fellow fashion giant Yves Saint Laurent America, Inc. (“YSL”).
In April 2011, Louboutin filed suit against YSL in New York District Court alleging violations of the Lanham Act and New York common law related to YSL’s manufacture and sale of shoes featuring red soles.
YSL counterclaimed seeking cancellation of Louboutin’s federal registration on grounds that Louboutin’s red sole: is not distinctive; is ornamental and functional; and was secured by fraud on the Patent and Trademark Office. With that, the battle commenced.
Trademark Functionality Takes Center Stage
The Louboutin case thrust the trademark doctrine of functionality--and all of its related terminology--into the limelight. This concept is rooted in the principle that truly utilitarian shapes and features should not be protected under trademark law in order to prevent perpetual monopolies on designs that should only be protected by limited-term patent rights.
The U.S. Supreme Court has two tests for determining functionality. Under the traditional test, a product feature is considered to be functional if “it is essential to the use or purpose of the article or if it affects the cost or quality of the article.” Under the competitive necessity test, a feature will be considered functional if it would put competitors at a “significant non-reputation-related-disadvantage.”
Taking it further, the U.S. Supreme Court fleshed out the concept of “aesthetic functionality” as follows: “[If] design’s
‘aesthetic value’ lies in its ability to ‘confer a significant benefit that cannot practically be duplicated by use of alternative designs,’ then the design is ‘functional.’” It is when a competitor lacks an equally marketable alternative design that the design will be considered to be aesthetically functional.
Aesthetically Functional = Not Protectable
When a feature is found to be aesthetically functional, the feature is not protectable as a trademark, regardless of its status as a source identifier to the consumer public. This impact of aesthetic functionality on the world of trademarks has triggered much conflict.
The court agreed with Louboutin’s position that the consuming public clearly associated the lacquered red sole with Louboutin. In fact, it acknowledged that “the red outsole [is] closely associated with Louboutin” and that “lacquered red outsoles on high-heeled, black shoes flaunt a glamorous statement that pops out at once . . . cognitive bulbs instantly flash to associate: ‘Louboutin.’”
However, in determining that the designer’s red sole is not entitled to protection under trademark law, the judges relied heavily on the “significant non-reputationrelated disadvantage” test. The court framed the issue as “whether, despite Christian Louboutin’s acknowledged innovation and broad association of the high fashion red outsole with him as its source, trademark protection should not have been granted to that registration.”
Drawing many parallels between fashion and art, the court found that for the same reason that an artist needs access to all colors of the rainbow for creative express, so too does a fashion house for its designs. The court concluded that YSL would be at a significant non - reputation - related disadvantage should it not be able to use the color red in connection with its shoes.
Louboutin Continues the Fight
The Louboutin d ecision was m et with h arsh c riticism. Within two months, lawyers for Louboutin appealed to the U.S. Court of Appeals for the Second Circuit. The crux of the appeal is that the District Court made “errors of law in determining that Louboutin’s red outsole mark was likely invalid.” Louboutin’s appeal garnered support from trademark practitioners and brand owners alike, including Tiffany and Company, owners of the “robinsegg blue” color for use in connection with jewelry, tableware and other goods.
Currently pending on appeal, should the Second Circuit uphold the District Court’s decision, the trademark community is concerned with the impact the Louboutin decision may have on the protectability of colors in the fashion world and beyond.
