Case C-163/16 – Christian Louboutin v Van Haren Schoenen BV: the CJEU’s preliminary ruling Although it might have been eclipsed by shoes of a different nature and purpose thanks to a certain football tournament which is hitting the media at the moment, fashionistas out there will be aware that the CJEU has handed down its judgment in the on-going dispute between Louboutin and Van Haren regarding use of a red sole, and whether Louboutin’s trade mark (shown below) should be declared invalid. For a full history of the case, see our previous blog posts
here and
here, which set out the background and legal position so far. The latest judgment can be read
here and the press release (which provides a helpful summary) is
here. The high profile case has attracted much media attention, especially within the fashion industry, due to the uncertainty around the future ability of Louboutin to enforce the trade mark registration for the ‘red sole’ were it to be found invalid. The case has also raised issues around the functionality of colour. For ease of reference, the trade mark concerned is as follows:
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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 key issue for consideration by the CJEU was whether the exclusion provided for under Article 3(1)(e)(iii) Directive 2008/95 (which states that marks which consist exclusively of the shape which gives substantial value to the goods cannot be registered) applies equally to two-dimensional properties of the goods (such as colour), as to three-dimensional properties of the goods (such as contours, measurements and volume). The AG’s second opinion suggested that Article 3(1)(e)(iii) could apply to the mark at issue, but that the assessment as to whether the shape of the sign gives substantial value to the goods must be limited to the intrinsic value of the shape, without taking into account the reputation or cachet associated with the brand in question. In a relatively short judgment from the CJEU, the Court concluded that, as the Directive does not provide a definition of ‘shape’, it must be given its usual meaning, and the Court defines this as a ‘set of lines or contours that outline the product concerned’. The Court then went on to say that this does not mean that a colour (without an outline) necessarily constitutes a ‘shape’ for the purposes of Art. 3(1)(e)(iii). The Court also pointed out that in the current case, whilst the shape of the product plays a role in creating an outline for the colour, the registration makes it clear in the description that the shape of the product (the contour of the shoe) is excluded from protection, and the trade mark is limited to the protection of the red colour applied to that part of the shoe. Further, insofar as the trade mark consists of colour (and where this is a fundamental part of the mark), it cannot be held that the mark consists ‘exclusively’ of a shape. The CJEU therefore concluded that Louboutin’s red sole trade mark does not consist ‘exclusively’ of a shape for the purposes of Article 3(1)(e)(iii) and is not precluded from registration on that basis. As the CJEU decided that Article 3(1)(e) does not apply to Louboutin’s mark, it did not go on to discuss whether or not colour adds substantial value to the goods, or plays another functional role within the mark. The assessment adopted by the CJEU differs from the AG’s first opinion in this case. In his first opinion, the AG had suggested that marks which consist of both shape and colour should be examined from the point of view of functionality to ensure that the general interest underpinning Article 3(1)(e) was fully served. He also found that colour could serve a functional purpose. His view was that Louboutin’s mark should be considered as consisting of the shape of the goods but seeking protection in relation to a particular colour (red) in relation to that shape, rather than the colour per se. The CJEU’s decision confirms that this is not the correct assessment where the registration has specifically excluded the ‘shape’ of the product from the scope of protection, thereby limiting the protection to the colour red when applied (in this case) to the sole of a shoe. The issue of aesthetic functionality in relation to colour was also a key consideration in the US case Louboutin brought against YSL in relation to the latter’s use of the colour red on the soles of shoes. The trial Court in that case, in a ruling that was later overturned, initially found that Louboutin’s mark was invalid because it was aesthetically functional. The Court also said that, whilst single colour marks were protectable as trade marks in other industries, they were not so in the fashion industry because they were aesthetically functional. That US trial decision was overturned on appeal on the basis that the trial Court was wrong to subject the fashion industry to a different standard than that used in other industries.
Conclusion Whilst the CJEU decision will be welcome relief to Louboutin, it gets us no further forward in relation to the complicated considerations around the application of Article 3(1)(e)(iii) to these types of marks, and the issue of ‘aesthetic functionality’ in general. The case will now be remitted to the Dutch Court, which had originally suggested that Article 2.1(2) Benelux Convention, the equivalent provision to Article 3(1)(e)(iii), should apply on the basis that the colour red is inextricably linked to the shoe sole and cannot be considered merely a two-dimensional mark - and that this is
not undermined by the fact that the description of the mark excludes the contour of the shoe from protection. It also suggested that the colour gave substantial value to the product. Against that background, it will be interesting to see how the Dutch Court applies the CJEU judgment to the infringement case. If colour is an important branding element for your business (whether fashion-related or not), Stobbs can help advise you on whether the colour is protectable as a trade mark and, if so, how best to protect it.
“
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 key issue for consideration by the CJEU was whether the exclusion provided for under Article 3(1)(e)(iii) Directive 2008/95 (which states that marks which consist exclusively of the shape which gives substantial value to the goods cannot be registered) applies equally to two-dimensional properties of the goods (such as colour), as to three-dimensional properties of the goods (such as contours, measurements and volume). The AG’s second opinion suggested that Article 3(1)(e)(iii) could apply to the mark at issue, but that the assessment as to whether the shape of the sign gives substantial value to the goods must be limited to the intrinsic value of the shape, without taking into account the reputation or cachet associated with the brand in question. In a relatively short judgment from the CJEU, the Court concluded that, as the Directive does not provide a definition of ‘shape’, it must be given its usual meaning, and the Court defines this as a ‘set of lines or contours that outline the product concerned’. The Court then went on to say that this does not mean that a colour (without an outline) necessarily constitutes a ‘shape’ for the purposes of Art. 3(1)(e)(iii). The Court also pointed out that in the current case, whilst the shape of the product plays a role in creating an outline for the colour, the registration makes it clear in the description that the shape of the product (the contour of the shoe) is excluded from protection, and the trade mark is limited to the protection of the red colour applied to that part of the shoe. Further, insofar as the trade mark consists of colour (and where this is a fundamental part of the mark), it cannot be held that the mark consists ‘exclusively’ of a shape. The CJEU therefore concluded that Louboutin’s red sole trade mark does not consist ‘exclusively’ of a shape for the purposes of Article 3(1)(e)(iii) and is not precluded from registration on that basis. As the CJEU decided that Article 3(1)(e) does not apply to Louboutin’s mark, it did not go on to discuss whether or not colour adds substantial value to the goods, or plays another functional role within the mark. The assessment adopted by the CJEU differs from the AG’s first opinion in this case. In his first opinion, the AG had suggested that marks which consist of both shape and colour should be examined from the point of view of functionality to ensure that the general interest underpinning Article 3(1)(e) was fully served. He also found that colour could serve a functional purpose. His view was that Louboutin’s mark should be considered as consisting of the shape of the goods but seeking protection in relation to a particular colour (red) in relation to that shape, rather than the colour per se. The CJEU’s decision confirms that this is not the correct assessment where the registration has specifically excluded the ‘shape’ of the product from the scope of protection, thereby limiting the protection to the colour red when applied (in this case) to the sole of a shoe. The issue of aesthetic functionality in relation to colour was also a key consideration in the US case Louboutin brought against YSL in relation to the latter’s use of the colour red on the soles of shoes. The trial Court in that case, in a ruling that was later overturned, initially found that Louboutin’s mark was invalid because it was aesthetically functional. The Court also said that, whilst single colour marks were protectable as trade marks in other industries, they were not so in the fashion industry because they were aesthetically functional. That US trial decision was overturned on appeal on the basis that the trial Court was wrong to subject the fashion industry to a different standard than that used in other industries.
Conclusion Whilst the CJEU decision will be welcome relief to Louboutin, it gets us no further forward in relation to the complicated considerations around the application of Article 3(1)(e)(iii) to these types of marks, and the issue of ‘aesthetic functionality’ in general. The case will now be remitted to the Dutch Court, which had originally suggested that Article 2.1(2) Benelux Convention, the equivalent provision to Article 3(1)(e)(iii), should apply on the basis that the colour red is inextricably linked to the shoe sole and cannot be considered merely a two-dimensional mark - and that this is
not undermined by the fact that the description of the mark excludes the contour of the shoe from protection. It also suggested that the colour gave substantial value to the product. Against that background, it will be interesting to see how the Dutch Court applies the CJEU judgment to the infringement case. If colour is an important branding element for your business (whether fashion-related or not), Stobbs can help advise you on whether the colour is protectable as a trade mark and, if so, how best to protect it.
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