Louboutin case could make it more difficult to register unconventional trade marks

Advocate general Maciej Szpunar confirmed a view he had expressed last year in a new opinion issued on a case before the Court of Justice of the EU (CJEU).

Szpunar's opinion is non-binding on the CJEU, and he made it clear that the ultimate decision on whether Louboutin's trade mark should be viewed as applying to just the colour red or to the shape of the goods the colour is applied to too is a decision for a court in the Netherlands to make.

The district court of The Hague has asked the CJEU to help it interpret questions of EU law on whether trade marks owned by Louboutin are invalid. Van Haren Schoenen, a shoe retailer in the Netherlands, has challenged whether the mark, which gives Louboutin monopoly rights across the Benelux region over the use of a particular shade of red applied to shoe soles, should have been registered.

The scope of Louboutin's trade mark is important, because it will impact on whether a particular part of EU trade mark law could apply to them.

Under EU law, prospective trade marks cannot be registered, and registered marks must be declared invalid, where the marks are found to be "devoid of any distinctive character". In addition, marks cannot be registered, or must be revoked, where they are simply signs which "consist exclusively of ... the shape which gives substantial value to the goods".

Louboutin's trade mark could be subject to revocation if the Dutch court determines that there is a shape element to be factored in. An assessment of whether the shape associated with the colour mark gives 'substantial value' to the shoes would have to be carried out in such circumstances.

Although Szpunar said that an assessment over whether the shape of Louboutin's mark give 'substantial value' to its shoes should be carried out by district court of The Hague, the advocate general provided guidance on the factors that should be considered in reaching a conclusion on that point.

He said that the popularity of particular shapes of goods, or of the brands behind those shapes, in the eyes of consumers is irrelevant to such assessments. Instead, whether or not a shape gives substantial value to goods must be determined through an assessment of the "intrinsic value of the shape" alone.

The reputation of marks in the eyes of consumers will, however, continue to be relevant to the assessment of whether marks are distinctive enough to merit protection under trade mark law.

In his opinion, Szpunar clarified that so-called 'hybrid' marks – those made up of several types of trade mark – "are compatible with the EU trade mark system". The law, in that regard, does not prohibit Louboutin's colour trade mark from being classified as a "trade mark which consists of the shape of the goods", he said.

His view is that the Louboutin mark should be categorised as "a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape". It should be left to the district court of The Hague to determine whether the mark can be categorised as a colour mark per se, however, he said.

"It … appears to me that, in the present case, the shape is not wholly abstract or of negligible importance, which could justify the finding that the mark at issue seeks protection for a certain colour per se, without any spatial delimitation," Szpunar said.

"It does not matter that the shape of the sole may vary depending on the different shoe designs. The focus remains a particular shape of the sole, not a different part of the shoe. In this context, regard must be had, first, to the principle that a trade mark must be considered as a whole and, second, to the fact that the protection enjoyed by the trade mark proprietor covers not only those signs which are identical to the sign for which registration is sought but also those which are similar to that sign," he said.

Szpunar also said that he doubted whether the colour red on its own was capable of identifying Louboutin as the trade mark's owner where the colour is "used … separately from the shape of the sole".

He also expressed the view that businesses seeking trade mark protection for colour signs that are "indistinguishable from the appearance of the goods in question" can only be said to be distinctive "where that sign departs significantly from the norm or customs of the sector at issue".

David Woods, specialist in trade mark law at Pinsent Masons, the law firm behind Out-Law.com, said that advocate general Szpunar's views, if endorsed by the CJEU in its ruling, could have a bearing on how easy it is for other businesses to register less conventional trade marks under new EU trade mark laws.

A new Trade Mark Directive, updating the current rules, was finalised in 2015, although its provisions do not need to be applied in national laws across the EU until 14 January 2019.

Szpunar said the changed wording of the new Directive's provisions on the 'substantial value' assessment has the same effect as the existing wording does.

Woods said: "The impact of all this is that Louboutin is at risk of losing its trade mark rights to the colour red for shoe soles, and that other businesses will likely have to overcome a greater barrier to register unconventional signs as trade marks in future."