No Ruling Yet in Louboutin v. YSL Case

  The SD of NY court that was hearing the Louboutin v. YSL case was supposed to rule on the case yesterday, but as of now, has not. Some points from the case...

• Louboutin is not, "as YSL misleadingly argues, [trying] to claim a monopoly over the color red . . . But when YSL ignores countless color choices, including other reds, and apes the famous signature of the LOUBOUTIN brand[, it destroys] the goodwill painstakingly built in the Red Sole Mark.  Other competitors will likely join YSL with their own red soles.  Unless this court enjoins [i.e., stops] YSL, the floodgates will open, and the Louboutin business will be devastated."

• Louboutin has engaged in "substantially exclusive use" of the Red Sole Mark for "over 19 years."  Against a "tsunami of undisputed evidence, YSL [makes a] bogus argument that [the relevant consumer] does not connect 'red soles exclusively with Louboutin'" [when that] is exactly what the undisputed evidence proves."  (Emphasis Louboutin's.)

• YSL cites "random internet offers to show that [non-Louboutin] red-soled shoes are available in the United States" but this is merely "an attempt to mislead this Court.  The shoes shown are for the most part eBay offers, which are one and two-offs and [thus] meaningless."  Further, "[v]irtually all of the shoes shown [by YSL] have been either rejected as non infringing by Louboutin or [are] the subject of policing actions, which are ongoing . . . . The presence of copyists in the marketplace is in fact anaffirmation of strong secondary meaning [among consumers.]"

• The Trademark Office has "warn[ed] of potential confusion in using the term 'aesthetic functionality.'"  Color is protectible as a trademarkwhenever it "is not 'essential to the use or purpose of the article or if it does not affect the cost or quality of the article,' that is, if exclusive use of the feature would not put competitors at a significant non-reputation-related disadvantage.'"  The mere fact that Louboutin uses role soles because they are "engaging" or "flirtatious" does not make the Red Sole Mark aesthetically functional.  If the court denies YSL the right to use bright-red soles, the company will not suffer a significant aesthetic disadvantage because it will still be able to make its shoes "engaging" and "flirtatious" by using "[e]ven Louboutin's red . . . on other, more visible, parts of the shoe."  And of course, a "trademark for a shoe's outsole also does not prevent use by others of many shades of red (as well as other colors)."

• "The world of fashion is no exception; [past cases demonstrate that] color marks are protectible against infringers."  [Ed. Recall thatYSL framed the issue more narrowly: "we are unaware of any case in which a court has upheld trademark protection to a mark consisting solely of a single color on a portion of an article of apparel."  This sort of issue-framing is a big part of what litigators do: strategic spin to get away from bad precedent, get closer to good precedent, or win the judge overwhen there is no precedent on point.]

• "Contrary to claims in [YSL's materials]," Louboutin's survey "showed actual street conditions and was not 'leading'; many features of the shoe were on display."  [Ed. YSL argued that Louboutin's survey was flawed, in part because it focused "unnaturally" on the sole of the shoe.]  "[I]t is not surprising that fewer identified the YSL shoes as Louboutin [in YSL's survey, because the defendant gave] respondents only a fleeting glance at the trademark (only a few of the 17 seconds of video) and made no effort to determine if respondents had seen the red soles."

• "Unable to refute the evidence, YSL proffers an excuse: fashion made them do it. . . . But fashion creates no need to copy Louboutin's red sole on a shoe, 'monochrome' or otherwise, when so many choices of color and color placement exist."

Supreme Court Rejects Tiffany Trademark Appeal

 James Vicini, Reuters

In November 2010, the Supreme Court announced that it had rejected an appeal by Tiffany & Co arguing that eBay Inc should be held liable for trademark infringement for selling counterfeit goods on its website.

The case has been widely viewed as a major legal challenge in the United States to Internet companies such as eBay, Google Inc and others that host services that other people provide. They have argued they should not be held responsible for users' trademark violations.

In appealing to the Supreme Court, Tiffany said the case presented an extremely important question about allocating trademark rights and burdens in the modern Internet economy.

Tiffany said a defendant can be held liable for operating a marketplace that it knows is used to sell substantial quantities of goods that infringe a trademark, even if it does not know which particular goods are being infringed.

Tiffany and other luxury brands have long argued that counterfeit merchandise bearing their names is sold on eBay. The Web commerce company, which does not itself put the items up for sale, has said it has spent millions of dollars to track down counterfeiters and remove such listings.

Tiffany sued eBay in 2004. A federal judge in New York and then a U.S. appeals court ruled that eBay was not liable for trademark infringement by allowing fake Tiffany goods to be sold on the website by individuals.

"It is true that eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did, and that is in part why we conclude that eBay did not infringe Tiffany's mark," the appeals court said in its ruling in April.

The appeals court said eBay and other companies have "a strong incentive to minimize the counterfeit goods sold on their websites."

In appealing to the Supreme Court, Tiffany said the appeals court's ruling was the latest in a series of cases around the world that have attempted to define whether Internet-based service providers can be held liable for infringing conduct of their users.

Tiffany said eBay earned $4.1 million from sales of purported Tiffany jewelry between April 2000 and June 2004.

EBay opposed the appeal and urged the Supreme Court to reject it, saying that if trademark law were to be changed for Internet commerce, then it should be done by lawmakers in Congress, not by the courts.

EBay said it has made substantial investments in anti-fraud measures, spending as much as $20 million a year.

The high court rejected Tiffany's appeal without comment.

Tiffany is based in New York while eBay is in San Jose, California. The Supreme Court case is Tiffany & Co v. eBay Inc, No. 10-300.