This week on IP Matters, let’s look at the long-running battle between Louboutin and Van Haren over Louboutine’s red-sole trademark. The European Court of Justice’s (ECJ) ruling on 12 June 2018 was in Louboutin’s favour after the ECJ remanded the case for reconsideration by the Hague court. Louboutine now hopes that it would finally be able to protect its signature red soles as trademark against copycats in the European Union (EU). Will Van Haren finally see red for allegedly stepping on Louboutin’s red-sole shoe trademark?
Louboutin high-heel shoes are easily recognizable by their red sole such that it has become a mark of luxury with a pair of stiletto selling for between 500 to 1000 Euros.
Louboutin, owned by Frenchman, Christian Louboutin, is a luxury designer brand for people who want to make big fashion statements. In 1992, Christian Louboutin launched the label and by 1993, created the red-sole signature. The world’s most famous women and female celebrities such as Emma Stone, Jessica Alba, Kendall Jenner, Melania Trump, and Rihanna wear Louboutin red-sole stilettos. This is why Louboutin’s red-sole signature which it trademarked in 2010 is worth so much to Christian Louboutin’s business. It wants no copycats.
Van Haren introduced black stiletto shoes that were visually similar to Louboutin stilettos, getting Louboutin’s attention.
Van Haren is a German shoe designer in the stiletto shoe market.
Like Louboutin shoes, Van Haren began to use red-sole heels as well and sold for 50 Euros.
This stepped on Louboutin’s red-sole shoes. Louboutin sued.
Louboutin sued Van Haren for making and selling lookalike red-sole shoes, allegedly amounting to trademark infringement.
Louboutin first sued Van Haren in 2012. Louboutin’s case was that Van Haren’s red-sole heels infringed on its registered and well-known trademark.
The District Court in The Hague ordered Van Haren to stop producing shoes with red soles and prohibited Van Haren from further selling the confusing shoes otherwise it will pay 500 Euros per pair to Louboutin.
Unhappy with the decision, Van Haren appealed against it, arguing that Louboutin’s red-sole trademark is invalid since it consists of not just colour but also shape of the shoe.
The Court of Appeals in 2014 referred the case to the ECJ to determine Louboutine’s trademark validity.
In February 2018, ECJ Advocate General Maciej Szpunar, recommended to the Court that Louboutin should not be allowed to enjoy trademark protection over its red-sole shoes because it combines colour and shape.
The question for determination by the court was this: ‘Is the notion of “shape” within the meaning of Article 3(1)(e)(iii) of Directive 2008/95 … limited to the three-dimensional properties of the goods, such as their contours, measurements and volume (expressed three-dimensionally), or does it include other (non-three dimensional) properties of the goods, such as their colour?’
Van Haren submitted that the applicable trademark law prevents the misuse of trademarks which may lead to the creation of anticompetitive monopolies.
But Louboutin disagreed with Van Haren’s position that recognizing Louboutin’s red-sole sign as a trademark would amount to creating an anticompetitive monopoly. Louboutin argued that trademark law protects signs that are distinctively based on their use in connection to goods and services and its red-sole shoes enjoy this attribution in the public. It submitted that what makes Louboutin’s shoes distinctive to the public is its red-sole signature and that over the years the public has associated this distinction to it, thus it would amount to an infringement for Van Haren to use a confusingly similar mark for its stilettos as well.
After analyzing the facts and the law, the Advocate General of the ECJ agreed with Van Haren. He recommended to the ECJ that Louboutin’s red-sole trademark should be seen as invalid. According to the Advocate General, a sign combining colour and shape is potentially caught by the prohibition contained in Article 3(1)(e)(iii) of Directive 2008/95. He therefore concluded that Louboutin’s red-sole mark “should be equated with a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than as a trade mark consisting of a colour per se.”
But the ECJ’s ruling on Tuesday 12 June 2018 did not follow the ECJ Advocate General’s recommendation.
The ECJ ruled that Louboutin was not seeking to protect the shape of a shoe, merely the application of a colour to a specific part of it.
Louboutin is happy about ECJ’s decision and believes that with the case now being referred back to The Hague court, the Hague court will now confirm its red-sole trademark as valid. For over 25 years, Louboutin’s red-sole stilettos has enabled the public to attribute the origin of the shoe to its creator, Christian Louboutin.
What the EU Law on Trademark Says
Under EU law, Article 3 of Directive 2008/95 entitled ‘Grounds for refusal or invalidity’ prohibits certain marks from being registered, and if registered, they shall be declared invalid.
While paragraph (1)(b) prohibits trade marks which are devoid of any distinctive character, paragraph (e)(III) prohibits signs which consist exclusively of the shape which gives substantial value to the goods.
Van Haren Schoenen BV, the Defendant, is a company based in the Netherlands. Trademark law in the Netherlands is governed by the Benelux Convention on intellectual property (trade marks and designs). Under Article 2.1 of the Benelux Convention, signs consisting exclusively of the shape which results from the nature of the goods themselves, which gives substantial value to the goods, or which is necessary to obtain a technical result are not regarded as trademarks.
As the ECJ has rightly ruled, Louboutin’s red-sole trademark is not “a sign consisting exclusively of the shape” but a sign consisting of an application of a colour to a specific part of the shape of a shoe.
This is distinctive. In 2012, Louboutin had similarly battled Yves Saint Laurent in a New York court over similar trademark issues. After the US Court held that Louboutin’s red-sole trademark was valid, it won the US trademark. It is most likely that Louboutin will finally win the battle when the Hague court follows the direction of the ECJ.
Three Lessons You Need to Understand about Trademark Protection
1. Trademark law doesn’t only protect distinctive letters, names, numerals, or words but also protects brands, devices, headings, labels, signatures, tickets or a combination of these: Distinctiveness is the hallmark of a trademark. The more distinctive your trademark is, the more valuable it is to your business, particularly in highly competitive industries. Be imaginative. Notice that Christian Louboutin is not fighting over use of a name confusingly similar to the brand name ‘Louboutin’ but fighting over its signature red-sole mark. Particularly in look-and-feel driven industries such as fashion, sports, or entertainment industries, you need to think of trademarks that don’t only involve words but also incorporate ‘look’ and ‘feel’ such as logo, signature, etc. A good IP lawyer with a brand expert can work you through this IP-brand process. Perception is everything.
2. Though trademark law protects proprietors of unregistered but well-known marks, always register your trademark: Under trademark laws around the world, unregistered marks enjoy some level of protection if they are well-known marks connected with particular goods or services. In common law jurisdictions such as Nigeria, the proprietor of the unregistered but well-known mark can proceed to bring a passing-off action against the person allegedly infringing on the unregistered mark. But don’t risk it. As a business, it’s best to register your trademark, however well-known it already is. Trademark registration ensures that you will benefit fully from the rights provided to trademark owners under the trademark statute. Also, you will not need to prove that your mark is well known in the affected market, often a daunting task for many trademarks proprietors. Although Christian Louboutin started using his red-sole signature since 1993 and had become well known in most target markets, he still went on to register the trademark to ensure that anyone who stepped on his red-sole shoes didn’t do so without getting a stiletto sting.
3. Trademark protection is not just mere IP registration but investment in your IP asset for business growth: Trademark is big—much bigger than most people think. Beyond a trademark certificate, there is a lot more leveraging on trademarks help you achieve, especially if you are working with an IP strategist, not just an IP agent as most businesses do. For instance, have you ever thought about how trademarks—or IP generally—can help you grow your business, solidify your unique selling proposition (USP), or turn your brand to a money magnet? If you are in an industry where others compete on price, you can compete on value by leveraging on your IP. With the disruptive technologies out there today, production cost is gradually decreasing across various industries. Think of 3D printing technology in the manufacturing industry. So using lower prices to compete is becoming the norm, especially when your disruptor is from outside your industry. Think Airbnb and hotels, Uber and taxi drivers, or fintech and banks. If you keep lowering price, you may soon find your business below Louboutin’s red-sole stiletto. For instance, Uber lost its place in the ride-hailing industry in Nigeria when it tried to compete with Taxify based on pricing. Avoid competing on price, especially when you know your value. Instead, invest in your IP. It’s the only intangible asset that can tangibly make the big difference.
Three Lessons You Should Take Away from Louboutin’s long-running battle against Van Haren
1. Believe in your brand: As a business owner, founder, or CEO, you must believe in your brand. If you don’t believe in your brand, no one will—and much less the court. After a long-running legal battle for his red-sole trademark, Christian Louboutin could have given up along the way.
2. Be creative. A little spark may be what you need to be worth billions of dollars in a few years: The first time Christian Louboutin came up with his red-sole high heels, he simply used a nail varnish he had borrowed from an assistant to paint one of the soles of his shoes red. Today, this red-sole mark is a signature of luxury, more than tripling the value of Louboutin shoes. Little wonder Van Haren wants a taste of the scarlet feel.
3. When things go wrong, your IP asset will be both your survival and winning strategy. If Van Haren loses its defence against Louboutin’s trademark-infringement action, what do you think would be the effect on Van Haren’s market? It would seriously affect Van Haren’s stiletto market. This is because Van Haren’s lookalike high heels must have been unduly gaining from Louboutin’s red-sole high heels. Now apart from this lookalike feature, has Van Haren invested in its own IP by not only designing its own high heels uniquely but also distinctively making it stand out from the crowd? It doesn’t seem so, especially from a red-sole point of view. Van Haren may have just bought for itself a copycat status its buyers may not like to be associated with. In business, you must never risk your brand name. Never. Invest in it, always. When Nokia lost out in the mobile-phone market, it leveraged on its IP asset in mobile-communication technology to not only stay relevant but also become invaluable to mobile-phone companies that needed its technology. Nokia became the invisible technology behind visible brands. Today, there is no winning business strategy without a winning IP strategy to power it.
4. Branding is everything. With IP, your brand will be your greatest asset: One of the reasons why African businesses don’t get to become global brands is not because they don’t have great products or services. Not at all. African businesses are not often global brands because they often fail to leverage the power of IP. Most African businesses are in the business of buying and selling. They are traders, even as manufacturers. But global brands have gone beyond trading. Global brands sell IP. They are not mere traders of goods and services. Shoes are not what Louboutin sells. Louboutin sells class and luxury. Phones are not what Apple sells. Apple sells prestige. Coca Cola does not sell beverage. It sells feeling. Without a fine IP strategy, none of these global brands would have become so successful today. What is your business selling?
In IP Matters, it’s never too early because IP matters to business and development, any day.