Christian Louboutin’s on-going battle to maintain trade mark protection for the ‘red sole’ of his shoes has been widely reported in the media in recent weeks. Many reports have suggested that it is not looking good for the future fate of the ‘red sole’ trade mark, but some commentators, including Louboutin himself, are looking at it from a more positive angle.
This blog piece explores the potential ramifications of the most recent opinion issued by Advocate General Szpunar (“the AG”) on 6th February 2018.
Louboutin obtained a Benelux registration in 2010 for the following trade mark:
“The trade mark consists of the colour red (Pantone 18 1663TP) applied to the sole of a shoe as shown (the contour of the shoe is not part of the trade mark but is intended to show the positioning of the mark)”
The goods covered were “footwear (other than orthopaedic footwear)” in class 25.
In 2012, Louboutin sought to rely on this registration and brought proceedings against a Dutch shoe retailer, Van Haren, for selling women’s shoes with red soles. Van Haren counterclaimed by applying to invalidate Louboutin’s registration arguing that the mark was invalidly registered because it consists exclusively of a shape which gives substantial value to the goods, and therefore falls foul of the provisions contained in Article 3(1)(e)(iii) Directive 2008/95 (“the Directive”).
As part of those proceedings, the Rechtbank Den Haag (the Dutch Court) referred a question to the CJEU asking whether the concept of ‘shape’ is limited to the 3D properties of goods (contours, volume etc.), or whether 2D properties, such a shape’s colour should also be taken into account when assessing the applicability of Art. 3(1)(e)(iii).
Our blog piece on the AG’s first opinion can be read here.
The Second Opinion
The CJEU ordered a reopening of the oral procedure and the second opinion from the AG is part of the new proceedings.
There are four main areas considered as part of the second Opinion:
- The applicability of Art. 3(1)(e)(iii) to ‘position marks’;
- The scope of Art. 3(1)(e)(iii) as compared with Art. 4(1)(e)(iii) of Directive 2015/2436 (the revised Directive forming part of the EU trade mark reform package);
- The rationale behind Art. 3(1)(e)(iii);
- Classification of the mark at issue with reference to Art. 3(1)(b).
Louboutin argued that his depiction of the above mark meets the criteria of Article 3(3)(d) of Regulation 2017/1431 and should therefore be classified as a position mark to which Art. 3(1)(e)(iii) of the Directive does not apply.
The AG’s view is that Art. 3(1)(e)(iii) could equally apply to a position mark in which the sign consists of the shape of the goods, because a position mark is not entirely independent of the shape of the goods, particularly in the case of a sign representing part of the goods in question and where the delimitation is shown by using colour.
The Scope of Art. 3(1)(e)(iii) as compared with Art. 4(1)(e)(iii) of Directive 2015/2436
The AG considered the extent to which the introduction of ‘other characteristics’ by Art. 4(1)(e)(iii) of the new Directive led to a broadening in scope of the provision which was not previously provided for by the wording in Art. 3(1)(e)(iii) of the earlier Directive.
If Art.3(1)(e)(iii) was intended to be limited to the ‘shape’ of signs, then arguably it would not be applicable to signs which do not consist exclusively of a ‘shape’ which gives substantial value to the goods i.e. those also seeking protection for a certain colour.
The AG did not agree with this. His view is that the revised wording of Article 4(1)(e)(iii) did not amount to a change in the law, merely a clarification confirming the already accepted position under the old Directive.
The Rationale for Art. 3(1)(e)(iii)
Louboutin tried to argue that within the aesthetic field, there is no need keep the essential characteristics of goods available on a lasting basis under trade mark law, because such characteristics do not have a sufficiently long economic lifetime to justify such protection.
Fashion trends change over time and characteristics which at one time were desirable to consumers will then fall out of fashion and become undesirable.
The AG referred to his Opinion in Hauck in which he said that to achieve the objection laid down in Art. 3(1)(e)(iii), i.e. to ensure that shapes which are attractive to the public remain available to market participants, both the perception of the sign by the relevant public and the economic effect of reserving that sign to one undertaking must be taken into account.
Applying this to the current case, the AG concludes that, unlike Art.3(1)(e)(i) and (ii), the applicability of Art. 3(1)(e)(iii) can depend on the public’s perception of what characteristics give substantial value to the goods. If that is the case, then it would be inconsistent to rule out the applicability of the provision to a sign consisting of the shape of the goods and seeking protection for a certain colour.
Again, the AG reiterates that the reputation of the trade mark or the owner must be excluded from the assessment of whether Art. 3(1)(e)(iii) applies.
Classification of the mark at issue with reference to Art. 3(1)(b)
Finally, the AG considers the assessment under Art. 3(1)(b) as an alternative position to a broad interpretation of Art. 3(1)(e)(iii).
AG considers the Libertel criteria, i.e. that the public can only distinguish a limited number of colours because it rarely compares products in various shades of colour when they are side-by-side. He concludes that this applies to position marks seeking protection for a certain colour.
It is also necessary to consider whether the sign in question departs significantly from the norms and customs of the relevant sector.
If Art.3(1)(e)(iii) is found not to apply and an assessment under Art. 3(1)(b) is made and the mark is deemed non-distinctive under that provision, then of course, it would be possible for Louboutin try to overcome that hurdle with evidence of acquired distinctiveness.
So what does this really mean for the red sole?
The fate of Louboutin’s trade mark now rests in the hands of the CJEU who will give the preliminary ruling, and then the Dutch Court, who will then need to apply the ruling and issue its decision.
It will be interesting to see whether the CJEU follows the Opinions of the AG, and if so how the Dutch Court then applies the law in the invalidity proceedings.
If the CJEU does follow the Opinion of the AG, and Article 3(1)(e)(iii) is applicable to the mark at issue, it does not necessarily follow that the test will be satisfied and Louboutin’s mark will be declared invalid.
Crucially, the AG has made it clear in both Opinions that in assessing whether the shape of a sign gives substantial value to the goods, the assessment must be limited to the intrinsic value of the shape only. Any reputation or cachet which results from the trade mark owner’s promotion of the sign cannot be taken into account.
Once we strip out the glamour and fame attached to Louboutin’s red sole (N.B. the red sole features as a branding element for Louboutin in more ways than on the soles of his shoes), and look at the mark as merely the shape of a shoe sole in red, can we really be so sure it adds substantial value to the goods? We’ll have to wait and see.