Louboutin: the next step in the red sole saga
Background
This latest development in the red sole saga concerns Louboutin's 2010 Benelux registration for "the colour red (Pantone 18 1663TP) applied to the sole of a shoe as shown (the contour of the shoe is not part of the trade mark but is intended to show the positioning of the mark)":
Louboutin commenced proceedings against Van Haren Schoenen BV ("Van Haren") (a Dutch shoe retailer) due to Van Haren's sale of shoes with red soles. The initial judgment was in Louboutin's favour, so Van Haren challenged the validity of Louboutin's trade mark, under Article 3(1)(e)(iii) of the Trade Marks Directive (2008/95/EC), which prevents registration of any sign which consists exclusively of a "shape which gives substantial value to the goods". Van Haren argued that the colour red conforms to the shape of the shoes and gives them substantial value.
The Netherlands court referred to the CJEU for a preliminary ruling, asking whether the concept of ‘shape’ is limited to three-dimensional properties of the goods, such as their contours, measurements and volume, or whether it includes other (non three-dimensional) properties of the goods, such as their colour.
Back in July last year, we blogged on the Advocate General's Opinion regarding the colour red applied to the soles of the shoes. The original blog post can be found here. In October 2017, we reported that the CJEU had taken the unusual step of re-opening the oral case and re-assigning it to the Grand Chamber due to issues of principle concerning European Trade Mark Law, and that the hearing had been scheduled for 14 November 2017.
Re-opened hearing for interested parties
The interested parties were invited to participate in the hearing, and observations were presented by Louboutin, Van Haren, the German, French and UK Governments, and the European Commission. Last week, Advocate General (AG) Szpunar issued a further Opinion.
Advocate General's further Opinion
Type of mark
AG Szpunar maintained his view that there is a distinction between colour marks per se (which would not fall within the scope of Article 3(1)(e)), and marks where a colour was integrated into the shape of the goods (which did fall within the scope of Article 3(1)(e)).
While it is for the referring court to decide which type of mark it is dealing with, AG Szpunar maintained his view that the mark in question was one which would potentially be caught by the prohibition contained in Article 3(1)(e), stating that "Having heard the submissions of the interested parties at the hearing on 14 November 2017, I am even less inclined to classify the mark at issue as one consisting of a colour per se."
Position marks
AG Szpunar considered that the introduction of the concept of a ‘position’ mark into EU law by Implementing Regulation 2017/1431 did not qualify his considerations concerning the applicability of Article 3(1)(e) to the trade mark in question.
New Directive
AG Szpunar examined the scope of the new Trade Marks Directive (2015/2436), Article 4(1)(e) (not yet in force) which refers to "the shape, or another characteristic, which gives substantial value to the goods". "Another characteristic" could include colour. The AG took the view that these amendments were being introduced in order to bolster a trade mark proprietor’s monopoly and restrict third party rights, and cannot readily be applied to the grounds for refusal or invalidity.
Substantial value
The AG also considered the meaning of the words "gives substantial value to the goods" within Article 3(1)(e). He maintained his view that this relates only to the intrinsic value of the shape, and that the reputation of the mark or its proprietor must not be taken into account when making the assessment.
Comment
If the CJEU follows AG Szpunar's further Opinion, there is a risk that Louboutin may lose its Benelux registration.
The outcome is likely to turn on whether the application of the colour red to the sole of the shoe is found to give substantial value to those shoes. Just because the mark in question is a type which could be caught by the prohibition in Article 3(1)(e), does not necessarily mean that it will fall foul of that provision.
It has been reported in the press that Louboutin has welcomed the AG's further Opinion on the basis that the outer sole of the shoe itself is not intrinsically valuable, and that the colour red applied to the sole is only valuable because of Louboutin's own marketing efforts and the resulting association of the red sole with Louboutin's products in the minds of the public.
This will be a question for the Netherlands court to consider when the case is referred back following AG Szpunar's further Opinion. As always, we will keep you on the front foot in relation to any further developments.