Brussels District Court rules Louboutin’s Color Mark is a Shape Mark

As reported recently by the IPKat here, a Belgian court has made a very curious finding.  Rather than as a color mark, it classified the famous red sole of Christian Louboutin’s shoes as a shape mark and then not only found against Louboutin, but also declared the mark invalid.

Frankly, I’m puzzled by this.  Unfortunately, I’ve not been able to find an English translation of the judgment and I don’t speak Flemish.  However, I’m fairly sure Louboutin will appeal and the last word on this has not been spoken.  Stay tuned…

Why the Madrid Protocol may be a good way to obtain a US Trademark Registration:

Yes, I haven’t blogged for a while.  The truth is, things have been hectic, both personally and professionally and other matters demanded my attention.  Well, I’m back.

In February of 2013, I posted a list of eight reasons why there are disadvantages to using the Madrid system to obtain a US trademark registration.  At the time I promised to post a similar list of positives.

Therefore, much later than anticipated, here is a non-comprehensive list of some of the advantages of using the Madrid system over the filing of a national application in the US:

  1. No need to show use in commerce before receiving a registration.  As you may know, national applications in the US require a showing that the mark is in use in commerce before the USPTO will issue a registration.  This is actually a double-edged sword, as explained in my previous post.  However, the advantage of obtaining a registration, which could then be cited against later filed trademarks by the USPTO, should not be underestimated.  Note, however, that the same effect can be obtained by using Section 44 of the Lanham Act, which permits foreign filers to obtain registrations (based solely on their bona-fide intent-to-use) without having to show use in commerce.
  2. Ease of filing and no need to involve US-counsel unless an office action is issued by the USPTO.  While most extensions of protections will eventually require retaining US-counsel, the initial filing is accomplished via WIPO.  This means a not insignificant cost savings at the outset.  In particular where the goods or services are simple (think “beer” in Class 32), i.e. where there is practically no likelihood of a rejection based on a lack of specificity in the description of goods, the cost savings could be significant.  Keep in mind, however, that the European penchant for throwing everything plus the kitchen sink into an application means that the likelihood of not receiving an office action is very remote.  It gets even worse if class headings are used.  In my view, the simpler the description of goods, the more likely it will be that going the Madrid route will result in a significant cost savings.  If, however, you choose to file an application for extension of protection with descriptions of goods and services in multiple classes and for hundreds of goods or services, the costs will escalate tremendously once it becomes time to answer the inevitable office action.
  3. Ease of filing of assignments is the final advantage I can think of.  If an international registration is assigned, WIPO will forward the new owner’s information to the USPTO and that new owner will be recorded as the holder of the US registration.  There is a very obvious administrative advantage here, one that should not be underestimated.  Remember, however, that the US requires that trademarks be assigned along with “the goodwill of the business symbolized by the mark.”  Non-US owners of international registrations should therefore take care that their assignment documents should include the necessary “magic language” in order to withstand challenge in the US, should there ever be a dispute over the validity of the registration.

I’m sure there are other advantages and I invite my esteemed readers to provide additional examples in the comments as their fancy might strike them.

Eight Reasons Not to Extend Protection to the United States via The Madrid Protocol

There have been many discussions over the years about the utility of the Madrid Protocol.  One of the questions most often repeated, at least in my experience, is whether it makes sense for non-US owners of trademarks to use the Madrid Protocol to extend protection of their internationally registered marks into the United States.  As can be easily imagined, this is a hotbed of debate.  Recently, in the context of a discussion on LinkedIn, I came across a list of reasons NOT to use Madrid in the US, authored by my colleague Nicholas Wells of Wells IP Law in Salt Lake City, Utah (http://www.wellsiplaw.com/).  Because I am in total agreement with the reasons set forth, I asked and received permission to replicate the list here.  I’ve added some remarks and thoughts that are mine, but in essence this is Nicholas’ list:

  1. Inability to use the Supplemental Register (i.e., to move a mark to the Supplemental Register to save it from abandonment when the mark is descriptive and acquired distinctiveness can’t be shown).
  2. Inability to change class numbers to place goods in the class that USPTO requires.  WIPO’s classification of goods and/or services cannot be modified by the USPTO.  If WIPO misclassifies goods or services, the applicant’s only recourse is to prevail on WIPO to correct the misclassification, which correction will then be transmitted to the USPTO and adopted.  This is onerous, takes time and there is no guarantee that WIPO will agree to reclassify.
  3. Inability to move goods between classes, even when the class that the goods belong to per USPTO is already part of the application.  This is not a problem in a national application.
  4. Inability to add classes (e.g., goods are listed as “blankets and clothing” in the original app.: a direct filed national application lets you split into classes 24 and 25 by paying another per-class official fee but under Madrid the USPTO requires you to drop whichever one is in the wrong class. If the application lists class 25, the blankets must be deleted.  If the application was filed in class 24, the clothing must be deleted – this can lead to the deletion of core goods or services from an application, potentially rendering it practically worthless to the applicant).
  5. Inability to add other statutory filing bases (specifically, inability to add Section 44(d) priority claim to a non-US application outside of the normal Madrid priority process).
  6. Weakness of Madrid registrations in a dispute (because use has not been shown during the registration process, the registration can be used defensively but not offensively unless use is first shown, which places the burden on the owner of the registration and catches many mark owners off guard).  My advice to my clients is usually to not use a registration in an opposition, infringement or cancellation proceeding unless the mark actually in use in commerce in the United States.
  7. Inability to modify marks (WIPO permits no modifications; USPTO permits non-material modifications either during prosecution or post-registration; this is very helpful for minor updates of design marks, but is impossible for Madrid-based US registrations).
  8. Dangers of missed maintenance deadlines; because mark owners track the renewal of the International Registration and are often more accustomed to measuring from the filing date, they are at risk of missing (a) the 5-6 year post-registration filing deadline for the affidavit of use (pursuant to Section 8 of the US Trademark Act) and the fact that these affidavits of use must also be filed every ten years, measured by the US-registration date, not the WIPO renewal date.

I will add one more reason to Nicholas’ already comprehensive list: There is actually not much of an administrative advantage to obtaining an extension of protection in the US.  As mentioned in point no. 8 above, separate affidavits of use must be filed in the USPTO, independent of the renewal applications that are filed through WIPO.  Therefore, in most cases a foreign owner will still have to retain US trademark counsel to file these affidavits for the owner, especially since the affidavits must be accompanied by specimens showing how a mark is actually used.  The selection of such specimens is crucial, as the USPTO will reject inappropriate specimens which, if the proper steps are not taken in a timely manner, could lead to the cancellation of the registration.

Do I think that foreign trademark owners should shy away from extensions of protection to the US?  No, but I do believe that the matter needs to be carefully considered on a case-by-case basis.  There are obvious advantages to using the Madrid Protocol to obtain extensions of protection in the US and it would be unfair to dwell only on the negative.  In a future posting, I will provide a list of positives that come with going the Madrid route to obtain a trademark registration in the United States.

Marc Randazza talks 1st Amendment – via Reason TV

Yes, I realize this is a trademark blog.  However, as does every Blogger, I reserve the right to go off-topic once in a while, as I do here.  Marc Randazza, whom I have the honor of calling a friend, talks about the 1st Amendment, the media, Anti-SLAPP suits and other topics in this recent video aired on the Reason TV YouTube channel.  This is worth watching.

USPTO Decides Not To Change Deadlines for Sections 8 and 71 Declarations

Further to my posting of August 17, 2012, the USPTO has now decided that it will not, at this time at least, pursue the issue of changing the filing deadline for Affidavits or Declarations of Use or Excusable Nonuse under Sections 8 and 71 of the Trademark Act.  The USPTO’s notice in this regard reads as follows:

“On August 16, 2012, the USPTO published a notice inviting the public to submit written comments on a potential legislative change to amend the first filing deadline for Affidavits or Declarations of Use or Excusable Nonuse under Sections 8 and 71 of the Trademark Act from between the fifth and sixth years after the registration date, or the six-month grace period that follows, to between the third and fourth years after the registration date, or the six-month grace period that follows (77 FR 49425 (August 16, 2012)).  A review of the comments submitted reveals that although many commenters expressed concern regarding registrations that are no longer in use in connection with some or all of the goods/services listed, the predominant sentiment was that the deadline should not be shortened.  Several commenters also noted that further research and data were necessary to support a legislative change to the deadline.  To that end, the USPTO notes that it is currently conducting a post-registration pilot program to gather information regarding the accuracy of identifications of goods/services for registered marks.  (77 FR 30197 (May 22, 2012)).”  See also here.

I’m not sure whether this kills the initiative or just postpones it, but I’m glad to note that the USPTO’s pilot program (previous blog post here) to assess the accuracy of the register will continue.  Under the pilot program, the USPTO may, upon request, require any additional specimens, information, exhibits, and affidavits or declarations deemed reasonably necessary to examine a post registration affidavit or declaration of continued use or excusable nonuse in trademark cases, and for a two-year period, conduct a pilot program for the USPTO to assess the accuracy and integrity of the register; and upon request, require more than one specimen in connection with a use-based trademark application, an allegation of use, or an amendment to a registered mark.

Off Topic: German Supreme Court Rules in Challenge to the European Stability Mechanism (ESM)

In a widely anticipated ruling, Germany’s highest court (Bundesverfassungsgericht – the German Constitutional Court) today declined to block the European Stability Mechanism, or ESM.  Ruling on six challenges seeking the court to issue injunctions and claiming that the ESM is incompatible with the German constitution, the court declined to enjoin the German president from signing the treaty establishing the ESM.

The court’s decision can be found here (in German).

Breaking: Second Circuit rules in Louboutin v. Yves Saint Laurent: Score one for Louboutin

The Second Circuit here in New York has just issued its long anticipated decision in the Louboutin v. Yves Saint Laurent case. (Decision here: Louboutin v YSL_Sept 5 12). Having just skimmed the decision, it appears that Louboutin can score this as a victory, but only partially.

Here are some excerpts from the opinion, written by Judge Cabranes:

“We conclude that the District Court’s holding that a single color can never serve as a trademark in the fashion industry, Christian Louboutin S.A. v. Yves Saint Laurent America, Inc., 778 F. Supp. 2d 445, 451, 457 (S.D.N.Y. 2011) (“Louboutin”), is inconsistent with the Supreme Court’s decision in Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 162 (1995) (“Qualitex”), and that the District Court therefore erred by resting its denial of Louboutin’s preliminary injunction motion on that ground.”

In other words, yes, you can have a trademark in a single color, even in the fashion industry.

“We further conclude that Louboutin’s trademark, which covers the red, lacquered outsole of a woman’s high fashion shoe, has acquired limited “secondary meaning” as a distinctive symbol that identifies the Louboutin brand. As explained below, pursuant to Section 37 of the Lanham Act, 15 U.S.C. § 1119, we limit the trademark to uses in which the red outsole contrasts with the remainder of the shoe (known as the “upper”). We conclude that the trademark, as thus modified, is entitled to trademark protection. Finally, we conclude that, because the monochrome design employed by YSL is not a use of Louboutin’s modified trademark, we need not, and indeed should not, address whether YSL’s use of a red outsole risks consumer confusion or whether the Louboutin mark, as modified, is ‘functional.’”

The court also held that “the District Court’s conclusion that a single color can never serve as a trademark in the fashion industry was based on an incorrect understanding of the doctrine of aesthetic functionality and was therefore error.”

In other words, yes Louboutin, has an enforceable trademark, but because YSL’s shoe was monochrome (non-contrasting), it loses on the infringement question. Had YSL’s shoe had a red sole and a contrasting upper, the result may have been quite different.

I think Louboutin should look at this as a victory, considering that their color mark has been much under attack for some time now. At least now Louboutin knows that (at least in the US), the mark is valid and enforceable (as long as the infringing shoes have red soles and uppers of a contrasting color).

This is my takeaway from a very quick skimming of the opinion. Further analysis will follow as soon as I’ve had a chance to give it a thorough reading. Stay tuned… (Question of the day: will either party appeal?)

Hat-tip to my friend and colleague Lorraine Fleck for alerting me to the issuance of the decision.