Careful Where You Step: Navigating the Minefield that is Aesthetic Functionality

by Victoria Burke

Until last year, Christian Louboutin (Louboutin) never doubted the validity of its trademarked red soles for women’s high heels.  Christian Louboutin S.A. v. Yves Saint Laurent America, 778 F.Supp.2d 445 (S.D.N.Y. 2011).  Although the product design may not have been inherently distinctive, the lacquered red sole acquired secondary meaning in pop culture.  Through effective marketing, consumers on the street could spy a passerby sporting a flashy red sole and instantly connect the shoe with Louboutin as the source.  Moreover, the USPTO had granted a federal trademark registration for the red lacquered soles.  So how did all this land Louboutin with a mark no more valuable than a hill of beans?  This is where the concept of aesthetic functionality comes into play.

Even a valid trademark can be turned on its ear if found to be functional.  A mark is functional if:  (1)  the design “affords benefits” to the product not related to source identification and if (2)  the exclusive use of the design has a chilling effect on competition because the benefits are “not practically available through the use of alternative designs.”  Restatement (Third) of Unfair Competition §17.

For the courts, aesthetic functionality is akin to those optical illusion pictures where if you stare at the canvas long enough you are supposed to see an elephant in the middle:  some circuits see it (2nd, 7th, 9th) while others are not sure it is there (5th).  In 1938, the roots of aesthetic functionality were planted by “Comment a” in the Restatement of Torts §742:  “When goods are bought largely for their aesthetic value, their features may be functional because they definitely contribute to that value and thus aid the performance of an object for which the goods are intended.”  The current influx of cases claiming aesthetic functionality as a defense indicates that the concept is far from dead.

One way to determine aesthetic functionality is via the “competitive necessity” test.  If a trademark’s protection means a “significant non-reputation-related disadvantage” for competitors, then it is aesthetically functional.  TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 27-28.  (2001) (quoting Qualitex v. Jacobson Prods., 514 U.S. 159, 165 (1995)).  Color itself qualifies as a trademark unless “exclusive use” by one producer would hinder competition.  Qualitex, 514 U.S. 159 at 165.  The same rule applies for elemental shapes because “the exclusive use of a basic element of design (shape, material, color, and so forth)” would “impoveris[h] other designers.”  Jay Franco & Sons, Inc. v. Franek , 615 F.3d 855, 860 (7th Cir. 2010).

So if color is allowed as a trademark, then why did the court rule against Louboutin’s exclusive use of red soles?  In aesthetic functionality, the industry in which a design element competes must be weighed.  For example, color in an industrial market “can be isolated to a single purpose” as that of identifying a source.  Louboutin, 778 F.Supp.2d at 451.  However, creative fields require greater “artistic freedom and fair competition.” Id. at 452.  In fashion, color “is used in designs primarily to advance expressive, ornamental and aesthetic purposes.”  Id. at 451.  Additionally, the court found Louboutin’s design choice of red benefits from nontrademark functions such as “to attract, to reference, to stand out, to blend it, to beautify, to endow with sex appeal.”  Id. at 454.

Another gray area of aesthetic functionality involves the use of unlicensed marks on products for purposes other than as a source identifier.  Here, the analysis involves determining the actual benefit sought by the consumer:  is it the mark’s intrinsic value or its reputation?  The courts have allowed a company to use another’s trademark based upon its “own intrinsic utility” rather than as a indicator of source.  Intern. Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912, 918 (9th. Cir. 1980) (customers purchased jewelry emblazoned with the collective marks to “expres[s] allegiance”).  In this context, the mark is used as a “‘functional feature of a product which constitute[s] the actual benefit that the consumer wishes to purchase.”  Id. at 917.  However, there are limits to this line of thinking.  The purpose behind appropriating a design cannot be to “piggyback” on the “trademark and the reputation it has acquired on the marketplace over a number of decades.”  Vuitton et Fils S.A. v. J. Young Enterprises, Inc., 644 F.2d 769, 777 (9th. Cir. 1981).  Hence, copying a mark will not be allowed if the allure of products is “tied to the reputation and association” of a mark indicating the products themselves lacked “‘intrinsic aesthetic appeal.” Au-Tomotive Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062, 1073-74 (9th. Cir. 2006).

What can a trademark practitioner do to build a stronger trademark and reputation?  At the trademark development stage, consider the industry setting when selecting a color or shape as your mark.  When a basic color or shape is desired, consider adding something of a flourish or design to make it distinctive.  Also, effective branding is key when navigating the aesthetic functionality minefield.  Talk with your client about the importance of overseeing how the marketing department words advertisements.  In the Franek case, the judge cited the wording of the company’s advertisements to establish the design as having both utilitarian and aesthetic function. If seeking trade dress protection for product design or product packaging, consider using “look for” advertising.  Spell it out for consumers:  this design = our company’s mark.

Last but not least, a warning about patent applications.  Circuits are divided as to whether a patent disclosure signifies functionality for all aspects of a product design.  An improperly written patent application can destroy the infinite trade dress protection afforded a product design.  If an aspect of product design is claimed as an element to be patented, then it is functional.  Thereby, on the patent claim, the features of the product design for which trade dress protection is sought need to be shown to be outside of the patent’s purpose and that they are merely arbitrary features, incidental, or ornamental.

Victoria Burke recently passed the California Bar Exam and was admitted to practice on December 1, 2011.  She attained her juris doctor degree from Southwestern Law School.  Her area of interest is intellectual property with an emphasis on trademark law.


Leave a comment

Filed under Trademarks

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s