Earlier this month, a federal appeals court ruled [PDF] that the contrasting red soles on shoes from designer Christian Louboutin are sufficiently distinctive to warrant trademark protection. The ruling adds an important chapter to the history of color trademarks, and has broad implications that go well beyond the fashion industry. To what extent, for example, might colors on web sites be eligible for trademark protection?
A trademark is “a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.” Examples of famous trademarks include the Nike swoosh symbol, the McDonald’s Golden Arches, and the phrase “Intel Inside.” In the landmark 1995 Qualitex ruling involving the color of dry cleaning equipment, the Supreme Court held that U.S. trademark law as established under the 1940s-era Lanham Act “permits the registration of a trademark that consists, purely and simply, of a color.” Color alone, wrote the Court, can at least sometimes “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.”
Mr. Louboutin started coloring shoe outsoles in the early 1990s, choosing red because he considered it “engaging, flirtatious, memorable and the color of passion.” Over the subsequent years, the red soles became a widely recognized identifier of the Louboutin brand. “When it comes to women’s shoes made for style rather than walking,” Reuters wrote in 2007, “Christian Louboutin footwear with their distinctive red soles lead the pack, according to a survey of wealthy American consumers.”
In 2008, the U.S. Patent and Trademark Office granted Louboutin a trademark [PDF] for a “lacquered red sole on footwear,” and in 2011, when the company learned that Yves Saint Laurent was selling shoes with both a red sole and a monochrome red “upper,” it filed a trademark infringement claim in a New York federal district court. After the court refused to grant an injunction against Yves Saint Laurent, Louboutin appealed.
In a September 5 ruling that both Louboutin and Yves Saint Laurent described as a victory, the United States Court of Appeals for the Second Circuit held [PDF] that Louboutin’s lacquered red outsole is “a distinctive symbol that qualifies for trademark protection,” but only when contrasted with a different color used for the other visible portions of the shoe. In other words, Yves Saint Laurent’s monochrome red shoes walk free, and Louboutin’s trademark survives, though with a narrower scope.
What does this mean for the ability to trademark colors on web sites? Consider the thick, red, horizontal stripe at the top of CNN’s web site. A person seeing a computer from the other side of a room who might not be able to read the print on the screen would nonetheless be likely to recognize that it was displaying a page from the cnn.com domain. In the context of online news sites, CNN’s red stripe placed across the top of the screen plays an important role in brand identification.
But does it establish trademark rights? The answer turns, among other things, on whether the stripe’s color and placement are distinctive (most likely, yes), whether its use by competitors would create customer confusion (quite possibly), and whether it steers clear of being functional (maybe).
A product feature cannot serve as a trademark “if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.” This functionality doctrine is intended to avoid granting trademarks that would give a single company control over a useful feature, and thus impede competition. Under some circumstances color can have an important functional role – for instance, if it is used to identify the type of medication contained in a gelatin capsule. Preventing a generic drug maker from choosing the same capsule color as the brand name manufacturer could create confusion for both pharmacists and patients.
More subtly and controversially, some courts – including the Second Circuit that issued the Louboutin ruling – have viewed product features that are “aesthetically functional” as ineligible for trademark protection. Even a feature that is not functional in the traditional sense can be aesthetically functional if allowing it to be trademarked “significantly undermines competitors’ ability to compete in the relevant market” [PDF].
It could be argued that CNN’s red stripe is not functional in either the traditional utilitarian sense or aesthetically. After all, a competing news site barred from using it could choose to use a green stripe, or no stripe at all. But there is also a case to be made in favor of functionality: Unlike the sole of a shoe, which has a function tied to its non-color attributes, color in a web site can help visitors navigate the site.
Another issue is the limited number of basic colors to choose from when designing a web site, and the limited number of basic shapes they can be used to fill. What would happen if there were no more colors left to trademark? In the 1995 Qualitex ruling, the Supreme Court considered and rejected depletion as an argument against granting trademark protection for colors. At some point, the Court reasoned, color choices become functional and thus ineligible for protection. And, the Court wrote, when “a color serves as a mark, normally alternative colors will likely be available for similar use by others.”
That may have been true for dry cleaning equipment manufacturers in 1995, and for makers of fiberglass insulation in 1985 and outboard motor companies in 1994. But is it well matched to an era when almost every company has a web site, and in some industries, such as online news, or, for that matter, high end shoes and jewelry, there can be dozens or hundreds of competing companies? In this context, the assumptions of the Qualitex Court regarding depletion may warrant reexamination.
Lynne Beresford, who served as Commissioner for Trademarks at the U.S. Patent and Trademark Office from 2005 to 2010, thinks that the use of color on web sites might, under some circumstances, be eligible for trademark protection. However, she notes, she has “not seen any successful trademark applications for color-only marks where the company hasn’t made a significant effort to alert the public about the trademark.” In other words, merely using a distinctive green border on a web site almost certainly wouldn’t be sufficient to obtain registration.
A closely related additional issue concerns copyright. William & Mary law professor Laura Heymann has written that the line between trademark and copyright is “considerably blurrier” than at the other intellectual property law interfaces. She also observes that the importance of overlapping rights – i.e., the possibility that a piece of creative content could have both copyright and trademark protection, is often underappreciated.
Web sites and other online content (such as virtual worlds) will test the overlap between trademark and copyright in new and complex ways. The design of a company’s web site, including the layout, colors, choice of fonts, and navigation among pages, is protected by copyright. The company’s name and logo on that website are protected by trademark. The extent to which the use of color on the site can also fall within the scope of trademark protection is an issue likely to end up before the courts in the coming years.