Reaction to Louboutin opinion: more trouble for non-traditional marks
The Court of Justice of the European Union (CJEU) is likely to follow an opinion issued by an advocate general (AG) yesterday, according to lawyers, spelling bad news for luxury brand Christian Louboutin and non-traditional trademarks.
In a closely-followed case involving the trademark registration of the red sole of Louboutin shoes, AG Maciej Szpunar opined that the combination of a colour and a shape may be refused protection.
Szpunar said that the colour had to be considered in relation to the shape of the shoe sole and expressed doubts over whether the colour red can be an identifier of a trademark when the colour is used out of context.
Michał Ziólkowski, senior associate at K&L Gates, said Europe’s highest court will follow the AG’s opinion and may decide that some marks (such as simple shapes or colours) should not be monopolised, “especially when they increase the value of the product and the value is connected with the colour or the shape, and not the repute of the brand itself”.
Gregor Vos, partner at Brinkhof, added that the AG’s reasoning follows the earlier case law of the CJEU.
In May 2017, the CJEU held in Yoshida that the qualification of the nature of a trademark is not determined by that indicated by the owner, but by a factual assessment of the courts, said Vos.
“This means that even if Louboutin would have qualified its mark as a figurative or position mark, it is irrelevant for the court’s assessment.”
He added that Szpunar’s conclusion that only the intrinsic value of the shape is relevant for the application of the ‘substantial value’ exclusion (and not the owner’s perception) “follows logically from the old rule that shape marks cannot acquire distinctiveness”.
If the CJEU does follow the opinion, Louboutin’s mark can be tested against the shape mark exclusions, including that covering substantial value.
Vos said Louboutin has arguments that the red sole does not give substantial value to its shoes and will argue that the real value of the red sole is the fact that it acts as an indication of origin.
“That effect, which comes from the reputation of Louboutin, is exactly the effect that AG Szpunar has excluded from the assessment of the substantial value exclusion,” he noted.
Gino van Roeyen, attorney at Lawnch, said he believes Szpunar is correct to argue that the assessment to determine whether the shape gives value to the goods, by virtue of its aesthetic characteristics, needs to take into account the average consumer’s perspective and the economic effects resulting from reserving that sign for a single undertaking.
“That is a principle and rationale which touches the very essence of trademark protection,” he said.
Bated breath
But it’s not only Louboutin that will be watching the outcome of the dispute closely—the CJEU’s decision could have a far-ranging impact on the fashion world.
Sanjay Kapur, partner at Potter Clarkson, explained that if Szpunar’s opinion is followed, it could mean that Louboutin will not be able to stop its competitors, which include haute couture fashion houses, from offering shoes with red soles.
“The red sole could therefore become ubiquitous, which would seriously reduce the cachet associated with the Louboutin brand,” warned Kapur.
But it’s not the end of the road yet, added Simon Bennett, partner at Fox Williams. The CJEU is not bound by the opinion, so Louboutin “may yet be able to hang on to its red soles mark”.
Wider implications
Vos cautioned that a potential impact of this decision is that non-traditional marks are getting more and more into trouble.
“Although the legislation treats these signs just as word and figurative marks, for two decades the CJEU has done nothing else than to limit their applicability. Based on unfounded factual assessments, such as that consumers would not be used to perceiving shapes and colours as trademarks, the CJEU has practically ended non-traditional trademarks.”
Van Roeyen added that now may be a turning point: “If you read the conclusions it looks like that we are approaching an era in which balancing rights becomes more in vogue.”
For this week’s question, we ask: An advocate general at the CJEU said that trademarks combining colour and shape may be refused or declared invalid under EU law. Do you think this was right call? Click here to answer.
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