The Color Battles: Louboutin’s Control Over the Red Sole

by Tania V. Parker

One of the Second Circuit’s recent decisions has set the fashion industry ablaze. In Christian Louboutin S.A., L.L.C. v. Yves Saint Laurent America Holding, Inc., the Second Circuit held that a single color can serve as a trademark in the fashion industry.[1] This overturned the district court’s ruling stating that a single color does not meet the commercial purposes for trademark protection.[2] The circuit court ruled that the red sole design by Christian Louboutin qualified as being valid and enforceable under the Lanham Act.[3]

The question is whether the Second Circuit‘s decision will give Christian Louboutin a monopoly over red-soled shoes. The federal antitrust laws are meant to ban unlawful business practices.[4] For example, the Sherman Act prohibits any “restraint of trade.”[5] A “restraint of trade” is defined as an activity that prohibits a business from conducting its general business in a way that it normally would have, had there not been a restriction.[6] Antitrust laws are meant to protect competition of businesses, all for the benefit of the general public.[7] Section 2 of the Sherman Act bars companies from monopolizing, or attempting to monopolize, trade or commerce.[8] Any potential violations by Christian Louboutin would fall under this category. However, interpretations of this section demonstrate that the law is violated when a business attempts to establish a monopoly through “unreasonable methods.”[9]

Christian Louboutin has not engaged in any behavior that rises to the level of creating a monopoly. Christian Louboutin has not started buying out its competitors to create a super itinerary of shoe designers. On the opposite end of the spectrum, Luxottica, the Italian glasses company, has bought several other sunglasses companies, and also manufacturers most designer sunglasses.[10] Luxottica currently manufactures glasses for twenty-one companies, including the Google Glass, and controls 80% of the major brands in the eyeglass industry.[11] However, according to the FTC, certain “monopolistic” practices are permissible.[12] These practices are permissible so long as they do not include price fixing or other methods that substantially harm consumers.[13]

Until Christian Louboutin starts buying Stuart Weitzman, Brian Atwood, Jimmy Choo, Giuseppe Zanotti, and Steve Weitzman—in an effort to not only control, but to own the entire market for designer shoes—they should be safe from antitrust litigation. Having only one brand design (a red lacquered sole) does not constitute a monopoly. Chrisian Louboutin does not own every shoe line, nor does he price his products to drive out his competition. Having a hold on the market of red soled shoes does not take away from other shoe designers, especially if they are not and have not used red soles in their designs. But more importantly, granting trademark protection to Christian Louboutin does not adversely affect consumers.

[1] Christian Louboutin S.A. v. Yves Saint Laurent America Holdings, Inc. (Louboutin II), 696 F.3d 206, 228 (2d Cir. 2012).

[2] Christian Louboutin S.A. v. Yves Saint Laurent America, Inc. (Louboutin I), 778 F.Supp.2d 445, 451 (S.D.N.Y. 2011).

[3] Louboutin II, 696 F.3d at 228

[4] The Antitrust Laws, Federal Trade Commission (Oct. 26, 2014, 3:13 PM), http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws.

[5] 15 U.S.C. §1 (2004).

[6] What is “Restraint of Trade”?, Rottenstein Law Group LLP, (Oct. 26, 2014, 6:01 PM), http://www.rotlaw.com/legal-library/what-is-restraint-of-trade/.

[7] Id.

[8] Single Firm Conduct, Federal Trade Commission (Oct. 26, 2014, 3:30 PM), http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct.

[9] Id.

[10] Christina H., 6 Secret Monopolies You Didn’t Know Run the World, Cracked (Oct. 27, 2010), http://www.cracked.com/article_18845_6-secret-monopolies-you-didnt-know-run-world.html.

[11] Ana Swanson, Meet the Four-Eyed, Eight-Tentacled Monopoly That is Making Your Glasses So Expensive, Forbes (Sept. 10, 2014), http://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/.

[12] Single Firm Conduct, Federal Trade Commission (Oct. 26, 2014, 3:30 PM), http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct.

[13] Antitrust Monopoly, Girard Gibbs LLP (Oct. 26, 2014, 6:06 PM), http://www.girardgibbs.com/antitrust-monopoly/.

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