Trademark Functionality and Fashion – Tips for Clients

Article co-written by Yuri Levin-Schwartz, Ph.D., a law clerk at MBHB.

Trademark protection is very important in the fashion industry. The ability to protect certain logos and design features may determine the success of a fashion designer’s business. Thus, it is crucial to understand how to protect your fashion trademarks and trade dress.

Trademark Functionality and Fashion

In the fashion industry, trademarks or trade dress may include logos, fashion designs, and even color. Trademark law protects marks or design features that are “distinctive.”[1] A mark is determined to be “inherently” distinctive if “[its] intrinsic nature serves to identify a particular source.”[2] Marks that are not inherently distinctive may, however, “acquire” distinctiveness by developing “secondary meaning” in the public mind.[3] “A mark has acquired secondary meaning when, in the minds of the public, the primary significance of a product feature is to identify the source of the product rather than the product itself.”[4]

A valid and protectable trademark is only infringed if there is a likelihood of consumer confusion with another’s use of a similar mark.[5] Even if a likelihood of confusion is established, a defendant may assert a defense of “functionality” of the mark. Two types of functionality exist: utilitarian functionality and aesthetic functionality. Under the doctrine of utilitarian functionality, a mark is functional if (1) it is “essential to the use or purpose of the article” or (2) if it “affects the cost or quality of the article.”[6] For example, a mark is functional if its features are dictated by the functions to be performed or permit the article to be manufactured at a lower cost.[7]

Those in the fashion industry more often deal with the doctrine of aesthetic functionality. The Supreme Court has held “when the aesthetic design of a product is itself the mark for which protection is sought, we may also deem the mark functional if giving the markholder the right to use it exclusively would put competitors at a significant non-reputation-related disadvantage . . . even if there is no indication that the mark has any bearing on the use or purpose of the product or its cost or quality.”[8] Thus, even if the design feature of a mark is not functional under the doctrine of utilitarian functionality, a court may still consider the mark functional if its design features are “essential to effective competition” in the relevant market.[9]

In a recent case discussing aesthetic functionality in the fashion industry, Christian Louboutin S.A. v. Yves Saint Laurent America Holding, Inc., the Court of Appeals for the Second Circuit held that the bright, red lacquered outsoles of Christian Louboutin shoes could be protected as a trademark.[10] The Court of Appeals reversed the District Court’s order denying trademark protection of the red lacquered outsoles, finding that there is no “per se rule of functionality for color marks in the fashion industry.”[11] But the Court limited the protection to use of a red lacquered outsole that contrasts with the remainder of the shoe.[12]

Tips for Clients in the Fashion Industry

Focus on protecting the specific design feature you want to use

The narrower the design feature you are trying to protect, the less likely the court will consider it to put competitors at a disadvantage. For example, in another recent case, Audemars Piguet Holding S.A. v. Swiss Watch Int’l, Inc., the District Court for the Southern District of New York found that the octagonal shape of Plaintiffs’ watches was not functional.[13] The Court noted that Plaintiffs were trying to protect the octagonal shape with other design features, not the octagonal shape alone.[14] The Court also focused on the fact that Plaintiffs did not allege infringement by Defendants’ watch which utilized the octagonal shape, but not the other design features.[15]

Use your mark as a source identifier

One of the most important things you can do to ensure trademark protection of your fashion design features is to use your mark as a source identifier. As noted above, a mark is distinctive, and thus protectable, if it serves to identify a particular source. If consumers decide to purchase a product because its design features identify a certain source, it is less likely that a court will find the features to be functional. In Knitwaves, Inc. v. Lollytogs Ltd., the Court of Appeals for the Second Circuit found that Knitwaves’ fall motif sweater design was not functional because Lollytogs would not be precluded from using all fall designs, just those that would cause confusion.[16] However, the Court found that Knitwaves’ designs were not protectable because they were not primarily intended for source identification.[17] To the contrary, in LeSportsac, Inc. v. K Mart Corp., the same Court affirmed the District Court’s finding that the combination and arrangement of design features on LeSportsac’s bags were non-functional and served the purpose of source identification.[18]

Be careful in how you advertise

In advertising any design feature you wish to protect, you should be careful to avoid making any statements that may be used as evidence of functionality. For example, in discussing why he chose red for the outsoles of his shoes, Christian Louboutin stated that he chose red “to give his line of shoes ‘energy,’” and that “he regarded [red] as ‘engaging, flirtatious, memorable and the color of passion,’ as well as ‘sexy.’”[19] While the Court of Appeals ultimately reversed the District Court’s finding of functionality of the red lacquered soles, the District Court noted that “Christian Louboutin himself has acknowledged significant, nontrademark functions for choosing red for his outsoles” in determining that the red outsoles should not be granted trademark rights.[20]

Establish your trademark rights

If possible, you should register your fashion trademark with the United States Trademark Office. A certificate of registration is prima facie evidence that a mark is a valid trademark.[21] Thus, it would be up to a defendant to prove that the mark should not be registered. In addition, once a registered mark has been used in commerce for five consecutive years, it is deemed incontestable, meaning that it is protected from many cancellation arguments.[22]

Enforce your rights

Failure to enforce your trademark rights over time may lead to the inability to enforce your rights in the future. Infringers may assert defenses of laches, acquiescence, or waiver if they have been using your mark for an extended period without any effort on your part to enforce your rights. Moreover, if others are using the same mark, it may lose its distinctiveness.

© 2014 McDonnell Boehnen Hulbert & Berghoff LLP

snippets is a trademark of McDonnell Boehnen Hulbert & Berghoff LLP. All rights reserved. The information contained in this newsletter reflects the understanding and opinions of the author(s) and is provided to you for informational purposes only. It is not intended to and does not represent legal advice. MBHB LLP does not intend to create an attorney–client relationship by providing this information to you. The information in this publication is not a substitute for obtaining legal advice from an attorney licensed in your particular state. snippets may be considered attorney advertising in some states.

[1] Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding Inc., 696 F.3d 206, 216 (2d Cir. 2012).

[2] Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992).

[3] Christian Louboutin, 696 F.3d at 216 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982)).

[4] Id. (quotations omitted).

[5] Id. at 217.

[6] Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982).

[7] LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 76 (2d Cir. 1985) (citing Warner Bros., Inc. v. Gay Toys, Inc., 724 F.2d 327, 330 (2d Cir. 1983)).

[8] Christian Louboutin, 696 F.3d at 219 (citations omitted).

[9] Landscape Forms, Inc. v. Colum. Cascade Co., 70 F.3d 251, 253 (2d Cir. 1995).

[10] 696 F.3d at 225.

[11] Id. at 223-24.

[12] Id. at 225.

[13] No. 12 Civ. 5423, 2014 WL 47465, at *13-14 (S.D.N.Y. Jan. 6, 2014).

[14] Id. at *14.

[15] Id.

[16] 71 F.3d 996, 1006 (2d Cir. 1995).

[17] Id. at 1009.

[18] 754 F.2d 71, 78 (2d Cir. 1985).

[19] Christian Louboutin v. Yves Saint Laurent Am., 778 F. Supp. 2d 445, 447 (S.D.N.Y. 2011).

[20] Id. at 453-54.

[21] 35 U.S.C. 1057(b).

[22] 35 U.S.C. 1065.