Whether color can serve as a trademark has been a long-debated question and the answer or answers to the question have not always been consistent. Much of the confusion stems from concerns about removing the entire portion of the color palette from the public. The issue of color as a trademark was recently the subject of a high-profile litigation in the fashion industry. In that case, fashion industry powerhouses Christian Louboutin, Christian Louboutin S.A. and Christian Louboutin LLC (“Louboutin”) and Yves Saint Laurent America Holding Inc., Yves Saint Laurent S.A.S. and Yves Saint Laurent America Inc. (“YSL”) battled over the color of soles on high fashion shoes.

Louboutin sued YSL in a New York federal district court for trademark infringement. Louboutin, well known for its sought-after red, lacquered outsole on a women’s high fashion shoe, as frequently worn by celebrities on red carpets as well as seen on movie and television screens, sought to prevent YSL from having the same red, lacquered outsole on a women’s high fashion shoe. Specifically, Louboutin was trying to prevent YSL from selling a red monochrome shoe with a red outsole, which it deemed infringed Louboutin’s red sole mark, in Christian Louboutin S.A. v. Yves Saint Laurent America, 778 F. Supp. 2d 445 (S.D.N.Y. 2011).

The district court sided with YSL and refused to enjoin it from selling a red monochrome shoe with matching red outsole. The district court held that, as a per se rule, a single color can never be protected in the fashion industry. As might be expected in such a high stakes dispute, Louboutin appealed to the U.S. Court of Appeals for the Second Circuit. (See Louboutin v. Yves Saint Laurent America Holding, 103 U.S.P.Q. 2d, 1937; 2012 U.S. App. LEXIS 18663 (2d Cir. Sep. 5, 2012).) The Second Circuit rejected the district court’s per se rule as inconsistent with the Supreme Court decision in Qualitex v. Jacobson Products, 514 U.S. 159, 162 (1995), which addressed the history of color in the context of trademark protection and found that “color alone, at least sometimes, can meet the basic legal requirements for use as a trademark. It can act as a symbol that distinguishes a firm’s goods and identifies their source, without serving any other significant function.” Following Qualitex, the Second Circuit held that a single color may serve as a legally protected trademark in the fashion industry.

The Louboutin case is the not the first time the courts have addressed the issue of color in the context of a trademark. The Federal Circuit, in In re Owens-Corning Fiberglass, 774 F.2d 1116 (Fed. Circ. 1985), held that color can act as a product-source designator. The color at issue in that case was pink, which is a source designator for Owens-Corning’s fiberglass insulation. The pink color of the Owens-Corning insulation is clearly recognizable and this has been reinforced by the associated advertising campaigns and the use of the Pink Panther in association with the product.

There are numerous examples of color being used for trademark protection throughout various industries. For example, Deere & Co. has trademarks for the colors green and yellow on its John Deere lawn and garden tractors, as well as other forestry equipment. Another popular example is that little blue box that signifies that someone was shopping at Tiffany’s. Tiffany LLC has registered a mark for its robin’s-egg blue used on boxes and packaging for its many goods, including jewelry, crystal, tableware and fragrances. In contrast to the robin’s-egg blue is Home Depot’s orange, which is the color registered by Home Depot as a background for advertising, promotional materials, signage and labels. And, for those younger consumers, or the young at heart, there is the trademark for the color yellow for The Wiffle Ball’s plastic baseball bat. Finally, there is the color mark for those little sticky notes found all over offices through out the nation. 3M owns a registration for the color canary yellow when used on stationery notes containing adhesive on one side for attachment to surfaces.

However, not all uses of color can be deemed to be trademarks. As the Supreme Court held in Qualitex and as the Second Circuit noted, when color serves only a functional purpose, it cannot serve as a trademark. When a color is functional, the Lanham Act prohibits a party from registering that color as a trademark, because it would prohibit legitimate competition. As a somewhat extreme example, consider the color red for a stop sign or a fire alarm. These uses provide a quick visual impression of the function associated with the object being viewed.

The functionality of a mark was discussed in Qualitex. If giving a markholder the exclusive right to use a mark will put competitors at a significant nonreputation-related disadvantage, then the mark should be deemed functional. The Second Circuit in Louboutin asserted a three-prong test for aesthetic functionality. The first two prongs addressed by the court were (1) was the design feature of the mark “essential to the use or purpose,” and (2) does the design feature affect the cost or quality of the product at issue? If the design feature of the mark is neither essential to the purpose of the goods nor affects the cost, then in order to receive trademark protection, the third prong must be addressed. The third prong is whether the design feature has a significant effect on competition. As noted by the court, this third prong of the test, which is from Qualitex, is fact-intensive, and only necessary if neither of the first two prongs is met. This third prong of the test is to determine if the protection of a mark significantly undermines competitors’ ability to compete in the relevant market.

Louboutin’s red sole mark, through its fame and popularity that were a result of Louboutin’s extensive advertising, resulting media coverage and Louboutin’s sale success, was found to have acquired limited secondary meaning and, as a result, the single color red sole mark was deemed a legally protected trademark in the fashion industry.

Louboutin’s efforts to distinguish its red sole mark were successful “to the point where, 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.” Unsolicited media attraction to that red sole became rampant. Louboutin created a brand with worldwide recognition based on the red sole mark.

Now, the Second Circuit made one distinction in its holding with regard to the red sole mark and this distinction resulted in modification to the trademark registration for the red sole mark. Pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119, the court modified the mark and instructed the director of the U.S. Patent and Trademark Office to limit the registration to “only those situations in which the red lacquered outsole contrasts in color with the adjoining ‘upper’ of the shoe.”

Accordingly, the red sole mark was found to distinguish Louboutin’s brand when the Louboutin lacquered red outsole was applied to a shoe with an upper of a different color. Louboutin was not entitled to prevent others from using the red lacquered outsole on a pair of monochromatic red shoes. Thus, a red sole on a monochromatic red shoe does not infringe Louboutin’s trademark registration. It is the contrast, the “pop,” if you will, that was closely associated with the Louboutin mark. The shocking red outsole on pink stilettos and that bright red lacquered outsole on leopard print shoes screams Louboutin to the customers in “the know,” but red soles on red shoes does not signify Louboutin shoes. Red shoes with red outsoles will not bring the fame, attention, and in Louboutin’s case, fortune, as will those Louboutin shoes with a red sole and contrasting color upper.

So, what does this mean for you or your client? Well, clearly if you or your clients are in the high fashion industry, the Second Circuit has further clarified Qualitex and opened the door for fashion designers to design their brand around signature colors. If the designer is successful in getting the public to buy the product because the public recognizes that brand as a result of, for example, extensive advertising, unsolicited media attention, successful sales and the emergence of copycats, then the designer may achieve the secondary meaning necessary to prevent competitors from copying that color for the same goods.

As for the implications of this Louboutin decision beyond the fashion industry, it clearly shows that there is not a per se rule preventing color from being a trademark. One should consider filing for trademark protection, through state or federal registration, for the use of color when it signifies the source of the goods or services. It is a very fact sensitive determination, but if color can meet the basic legal requirements for use as a trademark in the fashion industry where color is a major component, then certainly there are other markets where color can be a major component of the product, but can still be eligible for trademark protection.

Louboutin managed to trademark that red carpet “pop” — that moment when “heads turn and eyes drop to the celebrities’ feet,” and the contrasting lacquered red soles on high-heeled, black shoes jump out at you. This “pop” is a glamorous statement, which screams Louboutin. If your client’s mark creates that “pop,” that mark is likely entitled to trademark protection. •

Anthony S. Volpe is a shareholder at Volpe and Koenig and has corporate and private-practice experience in securing, licensing and enforcing all aspects of intellectual property rights.

Kristine L. Butler is an associate with the firm and focuses her practice on IP litigation, including the infringement of patents, trademarks and copyrights, as well as matters involving false advertising and unfair competition.