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Friday, 23 June 2017

AG Szpunar advises CJEU to rule that a red sole may not be just a colour

Every woman's
dream red soles
Can a colour be considered akin to a shape, so that a sign that consists exclusively of a colour "which gives substantial value to the goods" cannot be registered as a trade mark?

As readers might notice, this question should be phrased differently under the new Trade Mark Directive: Article 4(1)(e) therein prevents in fact registration as a trade mark of any sign that consists exclusively of "the shape, or another characteristic, which gives substantial value to the goods".

However the question of whether a colour is to be regarded as a shape (and not just "another characteristic") is because under the 2008 Directive, Article 3(1)(e)(iii) therein prevents [the general deadline for national implementations of the new directive is 14 January 2019] registration of any sign which consists exclusively of "the shape which gives substantial value to the goods". 

To add further complexity to this issue, the various language versions of the 2008 Directive seem to suggest that a shape may not be just a 3-dimensional object, but also a 2-dimensional one ... this possibly being the case, at certain conditions, of a colour. As this blog reported, in fact, the German, Dutch, French and Italian versions of the 2008 Directive speak of 'Form', 'vorm', 'forme' and 'forma', respectively.

All this is currently being at the centre of a Dutch reference for a preliminary ruling (from the Rechtbank Den Haag) to the Court of Justice of the European Union (CJEU), arisen in the context of longstanding litigation over the validity (or lack thereof) of the (in)famous Louboutin red sole colour mark. The case reference is Christian Louboutin and Christian Louboutin SAS v Van Haren Schoenen BV, C-163/16.

More specifically, the Dutch court is asking the CJEU to answer this question:

“Is the notion of ‘shape’ within the meaning of Article 3(1)(e)(iii) of Directive C (‘Form’, ‘vorm’ and ‘forme’ in the German, Dutch and French language versions of the Trade Marks Directive respectively) 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?”

In 2010 Louboutin obtained the registration of a Benelux trade mark for goods in Class 25. Initially the registration was for footwear other than orthopaedic footwear, but in 2013 it was amended so as to limit the goods covered to high-heeled shoes (other than orthopaedic shoes) [interestingly enough, Louboutin also produces red-soled flat shoes].
The trade mark consists "of 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 brought proceedings against the operator of Dutch shoe retail outlets (Van Haren) over the sale of high-heeled women’s shoes with red soles. Further to an initial judgment in favour of Louboutin, the defendant's is now challenging the validity of Louboutin's trade mark on grounds that it would be a 2-dimensional mark (the colour red) which, when applied to the soles of shoes, conforms to the shape of the shoes and gives them substantial value. 
The Rechtbank Den Haag did not appear entirely persuaded by Van Haren's argument, yet decided to stay the proceedings and ask the CJEU whether the concept of ‘shape’ is limited to 3-dimensional properties of the goods, such as their contours, measurements and volume, thus excluding colours.
The AG Opinion
Yesterday Advocate General (AG) Maciej Szpunar delivered his Opinion

Also referring to the seminal CJEU decision in Libertel, the AG framed the present case within the specific issues presented by signs (shape and colour marks, but also position, motion, sound, olfactory or taste marks) which are indissociable from the appearance of the goods, notably their potential anti-competitive effects. It is essentially for this risk that it is important that the interest in keeping certain signs in the public domain is taken into account when they are examined with a view to registration [para 26].
Classification of the contested mark
Having said so, the AG turned to the classification of the contested mark. While noting that it is for the referring court to make a determination in the specific case at hand, the AG stated that to this end "the referring court should carry out an overall assessment, taking into account the graphic representation and any descriptions filed at the time of application for registration, as well as other material relevant to identifying the essential characteristics of the contested mark, where applicable." [para 34] 
However, the fact that a mark has been registered as a figurative mark does not mean that other classifications are not possible. [para 35]. It is in fact necessary "to consider whether the mark at issue seeks protection for a certain colour per se, not spatially delimited, or whether, on the contrary, such protection is sought in conjunction with other characteristics relating to the shape of the goods." [para 36] The fact that the colour is applied to a well-defined part of the goods (eg a shoe sole) does not represent an obstacle to considering that, although the proprietor of the mark does not claim protection for the contours of the goods, protection is actually sought for something other than just a colour. 
More specifically, "what must be determined is whether the sign derives its distinctive character from the colour in respect of which protection is sought per se, or from the exact positioning of that colour in relation to other elements of the shape of the goods." [para 38, the latter being possibly the case of the mark at issue]
AG Szpunar concluded that it is necessary "in examining the essential characteristics of the contested mark, to take into account the colour as well as the other aspects of the goods in question. The mark should therefore be equated with one consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than one consisting of a colour per se."
Not Louboutins,
but every little girl's
dream red shoes
Applicability of Article 3(1)(e) and the wording of the new Directive
Nonetheless, the AG considered both options (ie the mark considered as a colour, or as a colour and a shape) to determine the applicability of Article 3(1)(e). 
While he considered the analysis in Libertel to be informed by the same rationale underlying Article 3(1)(e), the AG concluded that if the contested mark were to be classified as a ‘mark consisting of a colour per se’, it would be appropriate to hold that it did not fall within the scope of Article 3(1)(e). Things would be different if the contested mark were to be considered as a mark consisting of a signs in which the colour is integrated into the shape of the goods. 
The AG recalled that in any case the absolute grounds for refusal contained in Article 3(1)(e) do not prevent the registration of a sign which, although consisting of a shape of goods, also incorporates a significant non-functional element. It follows that "the question of whether or not, in a shape and colour mark, colour is a functional element, must be considered as part of the overall assessment of the sign, from the point of view of Article 3(1)(e) of Directive 2008/95. Furthermore, it is apparent from that case-law that, conversely, the provision in question applies to a shape of goods which incorporates another element where that element is functional." [para 60]
Interestingly, the AG at this point referred to the wording of the new Directive (ie the reference to "the shape, or another characteristic [of the goods]"), and held that that it does not represent a change of the law, but rather a mere clarification of existing law [paras 63-64]
In conclusion "the mark at issue should be regarded as sign of that type, combining colour and shape, the mark would potentially be caught by the prohibition contained in Article 3(1)(e)(iii) of Directive 2008/95." [para 66]
The interpretation of ‘shape which gives substantial value to the goods’
Finally, the AG addressed ("for the sake of completeness") the circumstances in which Article 3(1)(e)(iii) is applicable. 
He held that its application "is based on an objective analysis, the purpose of which is to show that the aesthetic characteristics of the shape at issue affect the attractiveness of the goods to such an extent that the reservation thereof to a single undertaking would distort competition on the market concerned. The consumer’s perception of the shape concerned is not the decisive criterion in that analysis, which potentially includes a range of factual matters. Furthermore, the analysis relates exclusively to the intrinsic value of the shape, and must take no account of attractiveness of the goods flowing from the reputation of the mark or its proprietor." [paras 69-70]
Beside the reference to the wording of the new Directive, an interesting aspect that the AG referred to in the final paragraph of the Opinion is also that the concept of a shape which ‘gives substantial value’ to the goods relates only to the intrinsic value of the shape, and does not permit the reputation of the mark or its proprietor to be taken into account.
If the CJEU follows the AG, not only will it be likely bad news for Louboutin, but potentially might create some uncertainties regarding the registrability of less conventional signs which, at least in the intentions of the 2015 EU legislature, could have become easier to register.


Ari said...

I don't think is bad news for Louboutin at all. I'm quite sure the AG added the last few paragraphs exactly to save the red sole mark from invalidation... I'm not a shoe expert, but don't you think that the "substantial" value" of the red colour results from the Louboutin's reputation, rather than from the instrinstic characteristics of the colour?

Eleonora Rosati said...

Hi Ari, this is a very interesting point. Hopefully the court will elaborate further on it!

Aaron Wood said...

Well if you look back to the Bang & Olufson speaker then you will see a case where the result of this change can be predicted. In that case B&O overcame a objection of non-distinctiveness with evidence of use, only to find the "add substantial value" objection applied.

The question will then be whether it will be argued that the use of the colour red to a sole adds substantial value insofar as the use of a contrast coloured sole is a feature which consumers like and value for its aesthetics rather than the Louboutin business. I am afraid I think it will be difficult for Louboutin to argue that the consumer does not go for aesthetics in the field of fashion, or to argue that designs on soles of shoes are not popular and sought after.

A case under unfair competition it may have to be from now on...

Anonymous said...

I guess, Amicus Curiae briefs keep coming on this case

Eleonora Rosati said...

@Anonymous: :-D

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