Thursday, June 13, 2013

Handbags and High-Heeled Shoes: Recent Trademark Disputes in the World of Fashion

When Paul Simon first sang about “diamonds on the soles of her shoes” in the 1980’s, he was apparently more fashion forward than we realized.  Less than a decade later, in the early 1990’s, the fashion house of Christian Louboutin began selling women’s high-fashion designer footwear displaying a distinctive red, glossy sole on the bottom of high-heeled shoes. Legend has it, Louboutin came up with the idea when he painted red nail polish on a pair of women’s shoes because they “lacked energy.”  These shoes soon became highly sought after by celebrities and consumers of haute couture everywhere.

Louboutin federally registered its red-colored sole for footwear as a trademark with the U.S. Patent and Trademark Office in 2008.  In 2011, Louboutin sought to enforce those rights by suing Yves Saint Laurent for selling red shoes that displayed red soles. In its Resort 2011 collection, the American branch of YSL featured purple, navy, green…and red shoes that all had soles of matching color. Louboutin took exception to the red-soled shoes and tried to stomp out YSL’s allegedly infringing activity.

At the district court level, a New York judge ruled against Louboutin’s request that YSL be enjoined from selling red-soled shoes. On appeal in September of 2012, the U.S. Court of Appeals for the Second Circuit expressly held that Louboutin could protect its iconic red-soled shoes, except when the entire shoe itself is red.  Therefore, YSL was allowed to continue selling its monochromatic red shoes. Both parties have claimed victory and the case was dismissed in December.

The defendant in a case brought by Coach, Inc., and recently decided, did not fare quite so well. In 2010, Coach sued the owner of the Southwest Flea Market located in Memphis, Tennessee for contributory trademark infringement, claiming he knew, or should have known, that some of the vendors at the flea market were selling counterfeit Coach Handbags and other infringing products.  Prior to filing suit, Coach had sent letters to the defendant, putting him on notice of the infringement. Even after the filing of the suit, multiple raids were conducted at the flea market, and more than 4,600 counterfeit Coach products were seized.

In the case pending in the U.S. District Court for the Western District of Tennessee, the magistrate judge granted summary judgment to Coach in 2012, ruling that the owner of the flea market was contributorily liable for the infringement, and the jury awarded Coach more than $5 million in damages. The case was appealed and last month the U.S. Court of Appeals ruled, for the first time ever, on the question of whether the owner of a flea market can be held liable for contributory trademark infringement. The answer was a resounding “yes”, as the court upheld the lower court’s ruling and the $5.04 million damage award. In its ruling, the court admonished the flea market owner for engaging in “ostrich-like behavior”, willfully ignoring the infringing activities occurring at the market, showing that the high price of fashion applies not just to the cost of the merchandise, but also to not respecting the trademarks by which that merchandise is known.