At the intersection of patent and trademark law is the functionality doctrine and its much maligned derivative–aesthetic functionality. Over the past decade, this doctrine has been largely dormant. Like fashion, the doctrine cycled back into style in 2011 and was considered by many to be one of the hottest intellectual property topics of the year. This increase in popularity was due in large part to a legal battle involving women’s shoes.
Shoe Conflict Erupts Over Red Soles
The controversy pitted two fashion powerhouses against each other. On one side is Christian Louboutin (“Louboutin”), an iconic footwear designer who has a federally registered trademark for his shoes’ signature lacquered red sole. On the other side is fellow fashion giant Yves Saint Laurent America, Inc. (“YSL”).
In April 2011, Louboutin filed suit against YSL in New York District Court alleging violations of the Lanham Act and New York common law related to YSL’s manufacture and sale of shoes featuring red soles.1
YSL counterclaimed seeking cancellation of Louboutin’s federal registration on grounds that Louboutin’s red sole is: not distinctive; is ornamental and functional; and was secured by fraud on the Patent and Trademark Office2. With that, the battle commenced.
Trademark Functionality Takes Center Stage
The Louboutin case thrust the trademark doctrine of functionality--and all of its related terminology--into the limelight. This concept is rooted in the principle that truly utilitarian shapes and features should not be protected under trademark law in order to prevent perpetual monopolies on designs that should only be protected by limited-term patent rights.3
The Supreme Court has two tests for determining functionality. Under the traditional test, a product feature is considered to be functional if “it is essential to the use or purpose of the article or if it affects the cost or quality of the article.”4 Under the competitive necessity test, a feature will be considered functional if is would put competitors at a “significant non-reputation-related-disadvantage.”5
Taking it further, the Supreme Court fleshed out the concept of “aesthetic functionality” as follows: “[A] design’s ‘aesthetic value’ lies in its ability to ‘confer a significant benefit that cannot practically be duplicated by use of alternative designs,’ then the design is ‘functional.’”6 It is when a competitor lacks an equally marketable alternative design that the design will be considered to be aesthetically functional.7
Aesthetically Functional = Not Protectable
When a feature is found to be aesthetically functional, the feature is not protectable as a trademark, regardless of its status as a source identifier to the consumer public.8 This impact of aesthetic functionality on the world of trademarks has triggered much opposition.9
In the Louboutin case, the court determined that the designer’s red sole is not be entitled to protection under trademark law; the judges relied heavily on the “significant non-reputation-related disadvantage” test to come to this conclusion. The Louboutin court agreed with Louboutin’s position that the consuming public clearly associated the lacquered red sole with Louboutin. In fact, the court acknowledged that “the red outsole [is] closely associated with Louboutin” and that “lacquered red outsoles on high-heeled, black shoes flaunt a glamorous statement that pops out at once . . . cognitive bulbs instantly flash to associate: ‘Louboutin.’”10
Following the rationale that functionality trumps secondary meaning, the court framed the issue in the case as “whether, despite Christian Louboutin’s acknowledged innovation and broad association of the high fashion red outsole with him as its source, trademark protection should not have been granted to that registration.”11
Drawing many parallels between fashion and art, the court found that for the same reason that an artist needs access to all colors of the rainbow for creative express, so too does a fashion house for its designs:
In both forms, the greatest range for creative outlet exists with its highest, most vibrant and all-encompassing energies where every pigment of the spectrum is freely available for the creator to apply, where every painter and designer in producing artful works enjoys equal freedom to pick and choose color from every streak of the rainbow.12
The court concluded that YSL would be at a significant non-reputation-related disadvantage should it not be able to use the color red in connection with its shoes.13 “Awarding one participant in the designer shoe market a monopoly on the color red would impermissibly hinder competition among other participants,” the court explained.14
Louboutin Continues the Fight
The Louboutin decision was met with harsh criticism. Within two months, lawyers for Louboutin appealed to the U.S. Court of Appeals for the Second Circuit. The crux of the appeal is that the District Court made “errors of law in determining that Louboutin’s red outsole mark was likely invalid.”15 Louboutin’s appeal garnered support from trademark practitioners and brand owners alike.
The International Trademark Association (INTA) and Tiffany and Company (owners of the “robins-egg blue” color for use in connection with jewelry, tableware and other goods) have filed amicus curiae briefs in support of Louboutin’s appeal. The briefs focus on: 1) the lower court’s error in failing to give Louboutin’s registration the presumption of validity it is entitled to as a federally registered trademark and 2) the overarching concern that the Louboutin decision expands the scope of an already highly controversial doctrine.16 Currently pending on appeal, the trademark community is concerned about the impact the Louboutin decision may have on the protectability of colors and other features in the fashion world and beyond should the Second Circuit uphold the District Court’s decision.
Betty Boop and Aesthetic Functionality
The Louboutin case was not the only case bringing the doctrine of aesthetic functionality to the forefront in the past year. The Ninth Circuit grappled with the doctrine in its decision in Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 636 F.3d 1115 (9th Cir. 2011). The Fleischer Studios case involved copyrightability and trademark protection for the famous “Betty Boop” character. Max Fleischer created the Betty Boop character name and image in the 1930s.17 He then transferred his rights in the characters to various movie studios; eventually, Fleischer’s family purchased back the rights for the character.18 Since reacquiring the rights, the Fleischer family - through its company - has licensed use of the character on a variety of merchandise.19
Fleischer sued A.V.E.L.A. for trademark and copyright infringement based on its use of the Betty Boop image on T-shirts, dolls and handbags.20 The district court granted summary judgment for A.V.E.L.A. on grounds that the Fleischer Studios failed to provide sufficient evidence of the validity of the transfer in ownership in the character, and evidence demonstrating the validity of the federal trademark registration for the character.21
On appeal, the Ninth Circuit held that because Betty Boop was a prominent feature on the T-shirts and handbags at issue in the case and was visible to others when worn, it was an aesthetically functional feature of the product and therefore was not protectable under trademark law. The court’s application of aesthetic functionality was a far departure from the Ninth Circuit’s 2006 decision in Au-Tomotive Gold v. Volkswagen of America, in which the Ninth Circuit held that an aesthetic feature of a product that serves a “significant” non-trademark function was protectable as a trademark, unless granting such protection would severely impact competition.
The Au-Tomotive court severely limited the application of the doctrine (or so it would seem), even going so far as to acknowledge that aesthetic functionality had a “somewhat checkered history.”24 Perhaps the most surprising aspect of the Ninth Circuit’s decision in Fleischer Studios was that the parties had not even briefed the issue of aesthetic functionality.
Entertainment Industry Backs Boop
The decision received a great deal of negative attention due to the potential ramifications on the protectability of aesthetically pleasing designs. Following the decision, Fleischer Studios filed a petition for rehearing or rehearing en banc of the opinion, which was subsequently granted. As noted in an amicus brief filed by the Motion Picture Association of America in support of Fleischer Studios’ petition for rehearing:
Taken to its logical limit, the majority’s expansive interpretation of ‘aesthetic functionality’ threatens to eviscerate trademark protection for trademarks that consumers find aesthetically appealing and attractive but that still serve as source indicators for the consumer. Such an interpretation would topple long-settled, firmly established law as well as merchandising practices in the entertainment industry.25
The Ninth Circuit quickly withdrew its decision on August 19, 2011, and replaced it with one that eliminated the court’s reliance on aesthetic functionality.26
Although the Ninth Circuit attempted to clean up the issue of the applicability of aesthetic functionality in the Betty Boop case, only time will tell who will win the battle in Louboutin. One thing is clear: the uncertainty about how courts will view and apply the doctrine of aesthetic functionality will continue to contribute to the doctrine’s controversial status in the trademark community.
1778 F. Supp. 2d 445 (S.D.N.Y. 2011).
2Id. at 449.
3See, e.g., Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 164, 115 S. Ct. 1300, 1304 (1995) (citations omitted) (“It is the province of patent law, not trademark law, to encourage invention by granting investors a monopoly over new product designs or functions for a limited time . . .”).
4Id. at 165 (citations omitted).
6Id. at 159 (quoting Restatement (Third) of Unfair Competition § 17 cmt. c, at 175-176).
8See J. Thomas McCarthy, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION §7:63 (4ed 2011).
9Id. (referring to the aesthetic functionality as “potent public policy”).
10778 F. Supp. 2d at 447-448.
11Id. at 449.
12Id. at 452-453.
13Id. at 454.
15See Brief for Plaintiffs-Counter-Defendants-Appellants at 20, Christian Louboutin, S.A. v. Yves Saint Laurent America Holding, Inc., No. 11-3303-CV (2d Cir. October 17, 2011).
16See Brief of Amicus Curiae, International Trademark Association, in Support of Vacatur and Remand, 11-3303-CV (C.A.2 November 14, 2011), Christian Louboutin, S.A. v. Yves Saint Laurent America Holding, Inc., No. 11-3303-CV.
17Id. at 961.
21Id. at 1171-72.
22636 F.3d at 1124.
23457 F.3d 1062, 1064-74 (9th Cir. 2006).
24457 F.3d 1062, 1064-74 (9th Cir. 2006).
25Brief of Amicus Curiae, Motion Picture Association of America, Inc., in Support of Plaintiff-Appellant's Petition for Panel Rehearing or, in the Alternative, Rehearing En Banc, 2011 WL 3281853, p. 8 (CA.9, Mar. 21, 2011), Fleischer Studios, Inc. v. A.V.E.L.A., Inc., DBA Art & Vintage Entertainment Licensing Agency, et al., 636 F.3d 1115 (9th Cir. 2011).
26Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 654 F.3d 958 (9th Cir. 2011) (denying the petition as moot, and without any mention of aesthetic functionality, remanded the trademark infringement claims to the district court).