Van Haren sees red – Louboutin defends trade mark for signature high-heel sole

On 12 June 2018, the Court of Justice of the European Union (“CJEU“), in a long-awaited judgment, ruled that a sign consisting principally of a colour as applied to a particular part of a product is not exclusively a shape mark and therefore does not fall within the absolute ground for refusal of Article 3(1)(e)(iii) Directive 2008/95 (Case C‑163/16). The case will now be referred back to the Rechtbank Den Haag (District Court, The Hague, Netherlands), which will deliver a final ruling on the pending infringement case against the Dutch shoe retailer Van Haren.

Shoe designer and producer Christian Louboutin (“Louboutin”) is owner of the Benelux trade mark for “High-heeled shoes (other than orthopaedic shoes).” in class 25, described as follows: “The 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).”. The mark in question is a typical “position mark”.

In 2012, Van Haren Schoenen BV (“Van Haren”), which operates shoe retail outlets in the Netherlands, sold high-heeled women’s shoes with red soles. Louboutin considered that Van Haren had infringed the above mark and initiated proceedings before Rechtbank Den Haag (District Court, The Hague, Netherlands), which partly upheld this claim. Van Haren challenged that judgment by counterclaiming that the mark at issue was invalid since it was a two-dimensional figurative mark consisting of a red coloured surface.

Given that the mark is composed of a colour which is applied to the sole of a shoe and is thus also an element of the product, the court queried whether the ground for refusal set out in Article 3(1)(e)(iii) of Directive 2008/95 (“Signs which consist exclusively of the shape which gives substantial value to the goods shall not be registered or, if registered, shall be liable to be declared invalid.”) applies to the same. Therefore, the court referred the following question to the CJEU for a preliminary ruling: “Is the notion of “shape”, within the meaning of Article 3(1)(e)(iii) Directive 2008/95 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?”

After two opinions issued by Advocate General (AG) Szpunar, who was inclined to rule that the mark at issue did fall within the shape grounds for refusal, the CJEU agreed with Louboutin, who had argued that the mark in question is a position mark and that the existing grounds for refusal for shape trade marks do therefore not apply in the present case. According to the CJEU, the meaning and scope of the concept of “shape” must be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part.

The concept of “shape” is usually understood as a set of lines or contours that outline the product concerned, so that a colour per se (without an outline) may not constitute a “shape”. The shape of the product or of a part of the product plays a role in creating an outline for the colour. It cannot be held, however, that a sign consists “exclusively” of the shape where the registration of the mark does not seek to protect that shape, but is intended solely to show the positioning of a specific colour (designated by an internationally recognised identification code). The CJEU, in this regard, was presumably strongly influenced by the fact that Louboutin had, in the mark at issue, expressly sought to exclude the contour of the shoe from the trade mark, such that it could hardly have been classified as consisting exclusively of the “shape” of a product.

By way of background, it should be noted that the shape grounds for refusal cannot be overcome by claiming that the mark has acquired distinctiveness through use, so had Louboutin’s mark fallen within the shape grounds for refusal it would have been fatal, as its reputation on the market would not have been able to save the registration.

The decision itself is not surprising on the facts, although what is notable is that the CJEU decided to deviate from the recommendations of the AG. Further, it would have been interesting for the CJEU to comment on the issue of “substantial value”, i.e. whether the value added to the mark to fall within the ground for refusal has to be inherent in the mark (following AG Szpunar’s second opinion) or can come from a market-related value, such as the reputation of Louboutin’s shoes.

The CJEU’s decision concerned the old law for “shape” refusals, which expressly referred only to “shape”. However, following a change in the EU law in 2015 and ongoing changes in the national trade mark laws due to be fully implemented by early 2019, these grounds for refusal also now apply to where the mark consists exclusively of a shape “or another characteristic”. This was one of the reasons leading the AG to recommend considering Louboutin’s combination of shape/position and colour to fall within the ground for refusal. The addition of the new wording “or another characteristic” was, however, directly in response to the removal of the graphical representation requirement in EU trade mark law, opening up trade mark registration to non-traditional marks, and it was arguably not intended to broaden the “shape” grounds for refusal but merely to make sure that they apply particularly to functional trade marks which are not represented graphically – examples that have been cited are the sound of a motorcycle for motorcycles, or an olfactory mark for perfume.