By Erin Geiger Smith
The fashion writers teetering into the first shows of New York Fashion Week on Thursday can rest easy: The lacquered red soles of their Christian Louboutin shoes are entitled to trademark protection. According to a 31-page opinion by the 2nd Circuit Court of Appeals in the infamous shoedown between Louboutin and Yves Saint Laurent, colors in the fashion industry can be trademarked under certain circumstances.

The opinion also said that YSL's all-red shoes don't infringe Louboutin's mark, which left both Louboutin and YSL claiming victory. But, either way, their fellow luxury designers could be the real winners for seasons to come.

The 2nd Circuit's long-awaited decision on Wednesday, authored by Judge Jose Cabranes for a panel that also included Senior Judge Chester Straub and Judge Debra Livingston, overturned a holding by U.S. District Judge Victor Marrero that a single color -- in this case the Chinese red of Louboutin's soles -- should not merit trademark protection.

Marrero held that the U.S. Patent and Trademark Office should never have granted Louboutin a trademark at all. A trademark was not merited, he wrote, because "there is something unique about the fashion world that militates against extending trademark protection to a single color."

Louboutin, represented by Harley Lewin of McCarter & English, asked the 2nd Circuit to reconsider Marrero's ruling, which went considerably beyond the issue of Louboutin's request for a preliminary injunction against YSL's monochromatic red pumps.

In its decision, the appeals court explicitly rejected Marrero's reasoning, noting that the U.S. Supreme Court's 1995 decision in Qualitex v. Jacobson Products, which addressed the so-called "aesthetic functionality" of a desired trademark, "requires an individualized, fact-based inquiry into the nature of the trademark and cannot be read to sanction an industry-based per se rule." The appeals court went on to say that Louboutin's red lacquered sole has acquired limited "secondary meaning" as a distinctive brand identifier in the "social circles in which these things matter a great deal."

(The appeals court, in other words, found that the red of a Louboutin shoe is more like the trademarkable pink of Owens-Corning than the unprotected green of John Deeretractors.)

But while the 2nd Circuit protected Louboutin from Marrero's finding that its trademark should be invalidated, it also held that the limited secondary meaning doesn't extend to use of red soles as part of a "monochromatic red shoe" -- the specific shoes at issue in this case. The 2nd Circuit instructed the trademark office to limit the registration of Louboutin's "Red Sole Mark" to shoes in which the red outsole contrasts with the rest of the shoe.

That's why YSL lawyer David Bernstein of Debevoise & Plimpton called the opinion "a total victory." Bernstein told On the Case that the 2nd Circuit's opinion effectively dismisses Louboutin's infringement claims against YSL and leaves the lower court to address only YSL's counterclaims on remand. Louboutin counsel Lewin conceded that YSL is "off the hook" for infringement but stressed that the 2nd Circuit favored Louboutin on the critical issue of the red sole trademark. "The scope of the lower court's ruling was so broad," Lewin said, "that it overshadowed the fight on the four models of (YSL) shoes."

For the rest of the fashion industry, the 2nd Circuit provided welcome clarity in its several-page analysis of "aesthetic functionality" and its recognition of the limited protections available to fashion brands. The court noted that the industry has "special concerns in the operation of trademark law," acknowledging arguments that U.S. copyright law does not adequately protect fashion design. It also took judicial notice of the U.S. Customs Office's recent seizure of more than 20,000 counterfeit Louboutin shoes.

"You almost get the sense that the court got it," said fashion law expert Judith Roth of Schiff Hardin. Fashion designers have had to historically rely on trademark to protect their brands, and such protection is thus "super-significant" for fashions designers, she said.

By releasing the opinion in time for the opening of the fashion runways at Lincoln Center, a possibility raised by On the Case on Aug. 14, the 2nd Circuit certainly ensured that trademark opinions will be so very in this season.

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