Opinion ID: 807878
Heading Depth: 2
Heading Rank: 4

Heading: The Red Sole Mark

Text: Having determined that no per se rule governs the protection of single-color marks in the fashion industry, any more than it can do so in any other industry, we turn our attention to the Red Sole Mark. As we have explained, Part II.A, ante, we analyze a trademark infringement claim in two stages, asking first whether the mark “merits protection” and, second, whether the allegedly infringing use of the mark (or a similar mark) is “likely to cause consumer confusion.” Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 115 (2d Cir. 2006). The functionality defense (including the tripartite aesthetic functionality test) is an affirmative defense that we consider at the second stage of this analysis. Stormy Clime, Ltd., 809 F.2d at 974. We have stated the basic rule that “[a] certificate of registration with the PTO is prima facie evidence that the mark is registered and valid (i.e., protect[a]ble), that the registrant owns the mark, and that the registrant has the exclusive right to use the mark in commerce.” Lane Capital Mgmt., Inc., 192 F.3d at 345. As the District Court correctly noted, “Louboutin’s certificate of registration of the Red Sole Mark gives rise to a statutory presumption that the mark is valid.”21 Louboutin, 778 F. Supp. 2d at 450 (citing 15 U.S.C. § 1057(b)).22 But the District Court found, in effect, that YSL had rebutted that 21 Louboutin argues that the District Court disregarded the statutory presumption of validity to which the Red Sole Mark was entitled. We disagree. The District Court’s ruling rested at least in part on its determination that the Red Sole Mark is functional and is therefore invalid, and its opinion clearly recognized that, at the threshold of analysis, Louboutin was entitled to the statutory presumption. 22 We note that a registered trademark that has been in continuous use for at least five years may, in certain circumstances, be deemed “incontestable.” 15 U.S.C. § 1065; see Maker’s Mark Distillery, Inc. v. Diageo N. Am., Inc., 679 F.3d 410, 417–18 (6th Cir. 2012). Because the Red Sole Mark has not been in use for five consecutive years since its registration, it is not yet entitled to the special protection available to incontestable marks. 24 presumption by showing that the Red Sole Mark is ineligible for protection because a single color can never achieve trademark protection in the fashion industry. As explained above, that holding was error. Although, as set forth below, we determine that the Mark as it currently stands is ineligible for protection insofar as it would preclude competitors’ use of red outsoles in all situations, including the monochromatic use now before us, we conclude that the Mark has acquired secondary meaning—and thus the requisite “distinctness” to merit protection—when used as a red outsole contrasting with the remainder of the shoe. Because in this case we determine that the Red Sole Mark merits protection only as modified, and because YSL’s use of a red outsole on monochromatic red shoes does not infringe on the Mark as modified, we need not, and do not, reach the issues of customer confusion and functionality at the second stage of the trademark infringement analysis described above.
We first address whether the Red Sole Mark “merits protection” as a distinctive mark. As discussed above, distinctiveness may be shown either by proof that the mark is itself inherently distinctive, or by showing that the mark has acquired, through use, secondary meaning in the public eye. See Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210–11 (2000); Inwood Labs., 456 U.S. at 851 n.11 (“[S]econdary meaning” is acquired when “in the minds of the public, the primary significance of a product feature . . . is to identify the source of the product rather than the product itself”). For the reasons that follow, we hold that the Red Sole Mark has acquired limited secondary meaning as a distinctive symbol that identifies the Louboutin brand, and that it is therefore a valid and protectable mark as modified below. See PaperCutter, Inc. v. Fay’s Drug Co., Inc., 900 F.2d 558, 559 (2d Cir. 1990) (a mark having secondary meaning is a valid mark). 25 Although a single color, standing alone, can almost never be inherently distinctive because it does not “almost automatically tell a customer that [it] refer[s] to a brand,” Qualitex, 514 U.S. at 162–63 (emphasis omitted); see Mana Prods., Inc. v. Colum. Cosmetics Mfg., Inc., 65 F.3d 1063, 1070 (2d Cir. 1995), a color as used here is certainly capable of acquiring secondary meaning. As the Qualitex Court put it, over time, customers may come to treat a particular color on a product or its packaging (say, a color that in context seems unusual, such as pink on a firm’s insulating material or red on the head of a large industrial bolt) as signifying a brand. And, if so, that color would have come to identify and distinguish the goods—i.e., “to indicate” their “source”—much in the way that descriptive words on a product . . . can come to indicate a product’s origin. Id. at 163 (emphasis added). In the case of a single-color mark, therefore, distinctiveness must generally be proved by demonstrating that the mark has acquired secondary meaning. Id. at 165–66. We see no reason why a single-color mark in the specific context of the fashion industry could not acquire secondary meaning―and therefore serve as a brand or source identifier―if it is used so consistently and prominently by a particular designer that it becomes a symbol, “the primary significance” of which is “to identify the source of the product rather than the product itself.” Inwood Labs., 456 U.S. at 851 n.11; see also Mana Prods., Inc., 65 F.3d at 1071 (“In light of the Supreme Court’s decision in Qualitex, color is today capable of obtaining trademark status in the same manner that a descriptive mark satisfies the statutory definition of a trademark, by acting as a symbol and attaining secondary meaning.”). “The crucial question in a case involving secondary meaning always is whether the public is moved in any degree to buy an article because of its source.”23 Genesee Brewing Co., 124 F.3d at 143 n.4. 23 Importantly, to determine whether a mark has secondary meaning, “it is not always the general public’s understanding but—depending upon the product—often only a segment of consumers that need be examined.” Centaur Commc’ns, Ltd. v. A/S/M Commc’ns, Inc., 830 F.2d 1217, 1221 (2d Cir. 1985); see, e.g., Harlequin Enters. Ltd. v. Gulf & Western Corp., 644 F.2d 946, 950 n.2 (2d Cir. 1981) (finding that a survey of “500 romance readers in three cities” in which fifty 26 “Factors that are relevant in determining secondary meaning include ‘(1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and, (6) length and exclusivity of the mark’s use.’” Id. (quoting Centaur Commc’ns, Ltd. v. A/S/M Commc’ns, Inc., 830 F.2d 1217, 1222 (2d Cir. 1985)). Whether a mark has acquired distinctiveness is “an inherently factual inquiry.” Yarmuth-Dion, Inc. v. D’ion Furs, Inc., 835 F.2d 990, 993 (2d Cir. 1987). Where, as here, the record contains sufficient undisputed facts to resolve the question of distinctiveness―not to speak of facts found by the District Court that are based upon evidence of record and not clearly erroneous―we may do so as a matter of law. See id. at 993–94; Warner Bros., Inc. v. Gay Toys, Inc., 724 F.2d 327, 333–34 (2d Cir. 1983) (determining, based on the weight of the evidence, that the challenged mark had established secondary meaning). The record before the District Court included extensive evidence of Louboutin’s advertising expenditures, media coverage, and sales success, demonstrating both that Louboutin has created a “symbol” within the meaning of Qualitex, see Qualitex, 514 U.S. at 162, and that the symbol has gained secondary meaning that causes it to be “uniquely” associated with the Louboutin brand, see Two Pesos, Inc., 505 U.S. at 766 n.4. There is no dispute that Louboutin originated this particular commercial use of the lacquered red color over twenty years ago. As the District Court determined, in findings of fact that are supported by the record and not clearly erroneous, “Louboutin invested substantial amounts of capital building a reputation and good will, as well as promoting and protecting Louboutin’s claim to exclusive ownership of the mark as its signature in women’s high fashion footwear.” Louboutin, 778 F. Supp. 2d at 447. And there is no dispute that Louboutin’s efforts were successful “to the point where, percent of the respondents identified a certain book cover design as having been produced by a certain publisher was “probative of secondary meaning”). 27 in the high-stakes commercial markets and social circles in which these things matter a great deal, the red outsole became closely associated with Louboutin,” id. at 447–48 (emphasis added), and where unsolicited media attention to that red sole became rampant. Indeed, the Chief Executive Officer of YSL’s parent corporation, François-Henri Pinault, himself acknowledged that, “[i]n the fashion or luxury world, it is absolutely clear that we recognize the notoriety of the distinctive signature constituted by the red sole of LOUBOUTIN models in contrast with the general presentation of the model, particularly its upper, and so for all shades of red.”24 Joint App’x 529. In light of the evidence in the record, including extensive consumer surveys submitted by both parties during the preliminary injunction proceedings, and of the factual findings of the District Court, we think it plain that Louboutin’s marketing efforts have created what the able district judge described as “a . . . brand with worldwide recognition,” Louboutin, 778 F. Supp. 2d at 448. By placing the color red “in [a] context [that] seems unusual,” Qualitex, 514 U.S. at 162, and deliberately tying that color to his product, Louboutin has created an identifying mark firmly associated with his brand which, “to those in the know,” “instantly” denotes his shoes’ source, Louboutin, 778 F. Supp. 2d at 448. These findings of fact by the District Court in addressing a motion for a preliminary injunction are not clearly erroneous. We hold that the lacquered red outsole, as applied to a shoe with an “upper”25 of a different 24 As an example of the interest of plagiarizers in “knocking off” Louboutin’s mark―another Centaur Communications consideration―we take judicial notice, pursuant to Federal Rule of Evidence 201, of a recent seizure by the United States Bureau of Customs and Border Protection of over 20,000 counterfeit Louboutin shoes illegally shipped to the United States, with an estimated retail value of over $18 million. CBP Seizes More than 18 Million in Fake Women’s Fashion Shoes, U.S. Dep’t of Homeland Sec., Customs & Border Prot. (Thursday, Aug. 16, 2012), http://www.cbp.gov/xp/cgov/newsroom/news_releases/local/08162012_5.xml; see Ives Labs., Inc. v. Darby Drug Co., 638 F.2d 538, 544 n.8 (2d Cir. 1981) (taking judicial notice of existence of official government proceeding), rev’d on other grounds by Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982). 25 As noted above, we use the word “upper” to refer to the visible portions of the shoe other than the outsole. 28 color, has “come to identify and distinguish” the Louboutin brand, Qualitex, 514 U.S. at 163, and is therefore a distinctive symbol that qualifies for trademark protection. We further hold that the record fails to demonstrate that the secondary meaning of the Red Sole Mark extends to uses in which the sole does not contrast with the upper―in other words, when a red sole is used on a monochromatic red shoe. As the District Court observed, “[w]hen Hollywood starlets cross red carpets and high fashion models strut down runways, and heads turn and eyes drop to the celebrities’ feet, lacquered red outsoles on high-heeled, black shoes flaunt a glamorous statement that pops out at once.” Louboutin, 778 F. Supp. 2d at 448 (emphasis added)). As clearly suggested by the District Court, it is the contrast between the sole and the upper that causes the sole to “pop,” and to distinguish its creator. The evidentiary record further demonstrates that the Louboutin mark is closely associated with contrast. For example, Pinault, the chief executive of YSL’s parent company, wrote that the “distinctive signature” of the Mark is in its “contrast with the general presentation of the [shoe], particularly its upper.” Joint App’x 529. Of the hundreds of pictures of Louboutin shoes submitted to the District Court, only four were monochrome red. Compare id. 19, 415, 438, 587 (depicting monochrome Louboutin shoes), with id. 415–27, 431–47, 593–653, 680–724 (photographs and news articles depicting Louboutin shoes). And Louboutin’s own consumer surveys show that when consumers were shown the YSL monochrome red shoe, of those consumers who misidentified the pictured shoes as Louboutin-made, nearly every one cited the red sole of the shoe, rather than its general red color. We conclude, based upon the record before us, that Louboutin has not established secondary meaning in an application of a red sole to a red shoe, but only where the red sole contrasts 29 with the “upper” of the shoe. The use of a red lacquer on the outsole of a red shoe of the same color is not a use of the Red Sole Mark. Because we conclude that the secondary meaning of the mark held by Louboutin extends only to the use of a lacquered red outsole that contrasts with the adjoining portion of the shoe, we modify the Red Sole Mark, pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119,26 insofar as it is sought to be applied to any shoe bearing the same color “upper” as the outsole. We therefore instruct the Director of the Patent and Trade Office to limit the registration of the Red Sole Mark to only those situations in which the red lacquered outsole contrasts in color with the adjoining “upper” of the shoe. See id. In sum, we hold that the Red Sole Mark is valid and enforceable as modified. This holding disposes of the Lanham Act claims brought by both Louboutin and YSL because the red sole on YSL’s monochrome shoes is neither a use of, nor confusingly similar to, the Red Sole Mark. We therefore affirm the denial of the preliminary injunction insofar as Louboutin could not have shown a likelihood of success on the merits in the absence of an infringing use of the Red Sole Mark by YSL.
Having limited the Red Sole Mark as described above, and having established that the red sole used by YSL is not a use of the Red Sole Mark, it is axiomatic that we need not―and should not―address either the likelihood of consumer confusion or whether the modified Mark is functional. 26 15 U.S.C. § 1119 provides that “[i]n any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.” (emphasis added). 30