5.1 Introduction
In its simplest form, the fashion industry may be described as the business of making apparel. Yet most will agree that the term ‘fashion’ goes beyond mere functionality in apparel to incorporate other attributes such as identities in styles, personal tastes and cultural biases. As an industry, it spans a wide range of offerings from haute couture, luxury fashion, bridge brands and diffusion lines to high street, fast fashion and economy brands,Footnote 1 providing the market with a plethora of fashion products at varying price points and other attributes. To survive and thrive in the fashion industry, designers and artisanal craftsmen must constantly innovate and create iconic and memorable designs and fashion concepts to differentiate their products from those of others, towards the ultimate objective of establishing a loyal customer base. Originality in designs and fashion concepts is thus the lifeblood of fashion designers. The mass market covets celebrated designs, many of which have originated from talented designers in haute couture and luxury fashion as well as lesser-known freelancers, because of their aesthetic appeal and exclusivity. The prevalent use of social media has contributed significantly to the extent and speed that unique and distinctive designs are able to reach vast consumer markets. A few notable design concepts have transcended mere commercial merchandise, successfully permeating popular culture. As such, fashion designers are driven to claim ownership in their designs and design concepts with the objective of preventing others from copying and exploiting them without attribution or due compensation.
Unfortunately, such protection is not always easy to achieve. While registered design rights may provide the means to protect designs, which are novel (not common to the trade) and not functional in nature, for a limited number of years (on average between 15 and 25 years depending on the country), many designs in the fashion industry, in particular designs of apparels, shoes, bags and other fashion accessories, often fall short of the requisite standard of novelty because they are common to the trade. Yet it has been noted that certain aspects or features of these designs are able to capture consumers’ attention and create lasting impressions. Examples of such memorable designs often cited include the eye-catching red on the bottom of a Christian Louboutin heel,Footnote 2 the intrecciato weave pattern and knot adornment on a Bottega Veneta product, the specific placement of buckles and zippers on a Balenciaga handbag, the red-green-red racing stripes of Gucci, the Adidas three-stripes design and the protruding ‘pocket tab’ in the form of a folded ribbon sewn with its ends captured in the seam of a rear patch pocket on a pair of Levi’s jeans, just to mention a few. The lack of adequate legal protection of fashion designs and design concepts continues to be a major source of dissatisfaction for fashion designers and is deeply rooted in a palpable sense of inequity.
At the same time, the modern fashion industry has grown into a huge lucrative global business and is a far cry from the bespoke artisanal craft business model of centuries past. At the outset of the twenty-first century, the modus operandi of fast-fashion conglomerates is the pursuit of profitable styles that can be translated, with the help of competitive technology, into timely in-season merchandise for the global mass apparel market. Aesthetically appealing designs and original design concepts are often the targets of cheap knock-offs almost immediately after they are presented to the public at fashion shows and on the catwalks. This has further fuelled the need for fashion designers and fashion houses to find effective ways to obtain property rights in their fashion designs and concepts in a bid to stop unauthorised exploitations.
There is a discernible trend in the fashion industry to obtain property rights by filing trademark applications for iconic design features applied on products, such as single colours, monograms and patterns, commonly referred to as non-traditional trademarks (NTTMs), and by defending vigorously the validities of these registered trademarks in courts. Recent examples of fashion houses going to court to lay claims over NTTMs that they consider distinctive of their goods and services include Bottega Veneta’s intrecciato weave and knot marks, Christian Louboutin’s red sole mark, the Adidas three-stripes design and the Levi’s protruding ‘pocket tab’.
The surge in registrations of NTTMs globally is the result of several factors. Following the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the world has seen the growth of the trademark universe. The broader definition of a trademark in TRIPS and the willingness of policymakers across all continents to facilitate the registration of traditional marks and NTTMs alike have contributed to the expansionist trend observed. In particular, modern branding and marketing strategies (which have had success in educating consumers to make a connection between a specific colour, design feature or smell and a particular origin of goods and services) have convinced businesses to seek exclusive rights over NTTMs. Yet it could be said that the protection of NTTMs have not been harmonised at the multilateral level despite their widespread acceptance and use. Indeed, courts in different countries have not always been consistent with the treatments of NTTMs, often resulting in differing judgments and creating uncertainties for trademark proprietors when protecting their NTTMs.
This chapter examines the use of NTTMs in the fashion industry. In particular, the authors study the arguments for and against the protection of NTTMs with reference to selected cases in the United States and the European Union. Although some fashion designers and enterprises have celebrated victories in court, it has been widely noted that the registration and protection of these NTTMs as trademarks can be problematic and potentially detrimental to continued innovations in the fashion industry. Closely connected to the conferral of trademark rights in NTTMs is the countervailing policy to ensure market competition and public accessibility to common design features and shapes in the fashion industry. Because of this, central to the discussion of where the appropriate balance ought to be struck is the element of distinctiveness of NTTMs, that is, their ability to distinguish goods and services, and consequently whether they should be conferred trademark rights. As it is generally accepted that NTTMs are inherently devoid of distinctiveness, the criteria in the assessment of whether they have acquired distinctiveness through use (in the alternative) becomes critical for proprietors seeking trademark protection of their NTTMs. To this end, the authors critically examine the different tests of ‘association’ and ‘reliance’ as discussed in recent court decisions on acquired distinctiveness of NTTMs and conclude with a recommendation that the ‘reliance’ test is preferred and ought to be adopted.
5.2 NTTMs in the United States and the European Union
As a starting point, there is no internationally agreed-upon and accepted definition of NTTMs.
Under Article 15.1 of TRIPS, any sign, or any combination of signs, capable of distinguishing a business’s goods or services from those of others is a trademark. This definition is expansive in scope and identifies the most important and universally accepted function of a trademark, that is, its ability to distinguish and to serve as a badge of origin for goods or services. In fact, an all-encompassing reference to ‘any sign’ in the definition of a trademark without qualification in Article 15.1 paves the way for the registrability of unconventional signs, including those that are not visually perceptible. As such, any signs outside of the traditional categories of words and images may be considered NTTMs and they possibly include visually perceptible signs like single colours, shapes, video clips, holograms, gestures and position marks, as well as non-visually perceptible ones like sounds and smells.
The broad definition of a trademark provided in TRIPS has opened up a whole new universe of possible signs, that of NTTMs, which may be protected through trademark registrations. Furthermore, registrations of NTTMs received a significant booster from post-TRIPS treaties such as the Singapore Treaty on the Law of Trade Mark 2006, which has provided the international trademark community with some degree of clarity and certainty in the registration procedure for novel types of trademarks, including non-visible signs. This has in turn facilitated the increase in registrations of NTTMs globally, including by prominent fashion houses and fashion designers. Indeed, over the years, fashion house and designers have not only taken advantage of the increasingly liberal and expansive legal norms in trademark protection to secure protection for NTTMs with regard to their fashion products but have also resulted in a marked increase in litigation in the fashion industry all over the world.
5.2.1 The United States
In US law, a trademark is defined to include ‘any word, name, symbol, or device, or any combination thereof – used by a person … to identify and distinguish his or her goods … from those manufactured or sold by others and to indicate the source of the goods’.Footnote 3 The terms ‘symbol’ or ‘device’ would seem appropriate for protecting various aspects of fashion design such as the use of a distinctive colour, configurations of colour, pattern or even shape, so long as they do not fall under what is specifically listed as unregistrable under the Lanham Act.Footnote 4
The US Lanham Act does not define ‘descriptive’, but it prohibits the registration of marks that are ‘merely descriptive’ of the goods or services for which the marks are sought to be registered.Footnote 5 Registration always requires that an applicant prove the mark is distinctive.Footnote 6 The courts have interpreted this requirement to be satisfied by showing the mark (i) is either inherently distinctive, or has acquired distinctiveness through secondary meaning and (ii) is not functional.Footnote 7 The functionality doctrine in US law encompasses both utilitarian/traditional functionality and aesthetic functionality and can be a significant hurdle for fashion brands seeking to register colours and shapes; its discussion unfortunately is beyond the scope of this chapter.Footnote 8
In the context of the fashion industry, secondary meaning arises when a descriptive – or otherwise unprotectable – symbol or device has been used in such a manner, for a sufficient duration and frequency, that it becomes uniquely identified with the user and/or the user’s product.Footnote 9 Depending on a mark’s eligibility for trademark registration, an owner of a mark may seek federal protection under either the principal or supplemental register.Footnote 10 To qualify as a trademark, a NTTM has to satisfy all three requirements: (i) the mark exists in a tangible form as a symbol, device or any combination of these, and is distinctive; (ii) the particular aspect of the symbol or device (eg, colour or shape) is adopted and used as a mark by a manufacturer or seller of goods or services and (iii) it identifies and distinguishes the seller’s good or services from those made or sold by others.Footnote 11
5.2.1.1 Christian Louboutin – the Red Sole Mark
The ‘Red Sole Mark’Footnote 12 of French fashion house Christian Louboutin is a famous example of a NTTM, the validity and exclusive trademark rights of which were upheld by the US Second Circuit Court of Appeals. Over three decades ago, in 1992, French designer Christian Louboutin first made and sold women’s high heels shoes with a unique feature – the outsole of the shoe was painted with a high-gloss red lacquer, contrasting with the colour of the remainder of the shoe. Since then, Christian Louboutin has invested substantial capital in creating a global brand based on this ‘red sole’ feature of his women’s high-heeled shoes,Footnote 13 so much so that the ‘flash of a red sole’ is today ‘instantly’ recognisable, to ‘those in the know’, as Louboutin’s handiwork.Footnote 14 In 2008, Christian Louboutin obtained trademark registration of the ‘Red Sole Mark’ in the United States.
Another venerable French fashion house Yves Saint Laurent (YSL) began to market, in 2011, a line of ‘monochrome’ shoes in purple, green, yellow and red. As the YSL shoes in the monochrome style featured the same colour on the entire shoe including matching soles, the red version was therefore all red, including a red insole, heel, upper, and outsole. Christian Louboutin claimed that YSL’s red monochrome shoes infringed his ‘Red Sole Mark’ and took YSL to court after negotiations to settle the dispute between the parties failed. The US District Court for the Southern District of New York denied a preliminary injunction to restrain YSL’s alleged use of the ‘Red Sole Mark’, and Christian Louboutin appealed to the US Second Circuit Court of Appeals.
Central to the Second Circuit’s decision in Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc.Footnote 15 is the question whether a single colour may serve as a legally protected trademark in the fashion industry. In the decision, US Circuit Judge Cabranes rejected the District Court’s conclusion that a single colour can never serve as a trademark in the fashion industry because single-colour marks are considered inherently functional, as this is inconsistent with the Supreme Court’s decision in Qualitex Co. v Jacobsen Products Co.Footnote 16 As such, there is no per se rule of functionality for colour marks in the fashion industry that would effectively deny trademark protection to any deployment of a single colour in an item of apparel. This ruling effectively paved the way for single colours to be registered as trademarks in the fashion industry as long as the single-colour marks are found to have acquired ‘secondary meaning’ and are not aesthetically functional. Having done so, the Second Circuit did not think it was necessary to address whether the ‘Red Sole Mark’ was indeed functional and whether YSL could avail itself of this defence. This was because the court concluded, based on the evidence adduced by Christian Louboutin, that the ‘Red Sole Mark’ had acquired a limited ‘secondary meaning’ to become a distinctive source indicator of Christian Louboutin’s footwear.Footnote 17 Therefore, Christian Louboutin’s ‘Red Sole Mark’ was ruled to be valid and enforceable.
However, the Second Circuit found that ‘secondary meaning’ of the mark held by Christian Louboutin extended only to the use of a lacquered red outsole that contrasted with the adjoining portion of the shoe. The court held that ‘it is the contrast between the sole and the upper that causes the sole to “pop,” and to distinguish its creator’.Footnote 18 Accordingly, the scope of the property rights conferred on Christian Louboutin’s ‘Red Sole Mark’ were limited to only those situations in which the red lacquered outsole contrasted in colour with the adjoining ‘upper’ of the shoe.Footnote 19 The red soles of YSL’s monochrome red shoes therefore did not constitute trademark infringement of Christian Louboutin’s ‘Red Sole Mark’ as they were used in situations where there were no contrast between the red outsoles and the remaining ‘uppers’ of the YSL shoes.
In the assessment of whether the ‘Red Sole Mark’ has acquired a ‘secondary meaning’, the Second Circuit reiterated that the relevant factors to consider included ‘(1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and, (6) length and exclusivity of the mark’s use’.Footnote 20 Christian Louboutin adduced extensive evidence in terms of advertising expenditures, media coverage and sales success before the lower court. Based on the evidence, the court approved the lower court’s finding that the ‘Red Sole Mark’ had gained secondary meaning that caused it to be ‘uniquely associated’ with the Christian Louboutin brand.
5.2.1.2 The Levi Strauss ‘Pocket Tab’ Mark
One of the most celebrated, and perhaps oldest, NTTMs in the US apparel industry is Levi Strauss & Co’s ‘pocket tab’ device,Footnote 21 ‘a folded ribbon sewn with its ends captured in the seam of a rear patch pocket’Footnote 22 on a pair of Levi’s jeans. Since 1936, Levi Strauss & Co has used its famous pocket tab device in an array of colours, the very first being red tabs bearing the company’s LEVI’S word mark in white, to distinguish its jeans by sight identification in a crowded denim market. Levi Strauss & Co has obtained US federal trademark registrations in respect of its ‘pocket tab’ device.Footnote 23 Over the years, the company has waged numerous court battles against other enterprises that have used protruding pocket tabs on jeans.
Levi Strauss & Co’s ‘pocket tab’ trademark is an example of a NTTM applied on an apparel as it is the tab’s location (attached to the seam of a rear patch pocket) and its defined shape (a folded ribbon sewn with ends captured in the seam of a rear patch pocket) in which the company Levi Strauss & Co has obtained property rights (trademark protection) and is seeking to enforce against third parties.
The likes of LEVI’S ‘pocket tab’ marks are also often referred to as ‘position trademarks’. The idea of affixing a label, visible externally, consistently upon the back pocket of a pair of jeans as a distinguishing feature was indeed a novel one when Levi Strauss & Co first conceived of it and used it as a trademark in the apparel industry in 1936. Yet the trademark registration of such a sign may still be strongly objected to on the ground that the LEVI’S ‘pocket tab’ lacked inherent distinctiveness, a fundamental requirement of trademark registration.Footnote 24 After all, LEVI’S ‘pocket tab’ is, for all intent and purposes, a simple apparel label, albeit a protruding one that has been placed in an unconventional location for apparel –at the external seam of the back pocket of a pair of jeans, as opposed to being attached to the inside seam of the apparel, where consumers usually expect labels to be affixed.Footnote 25 In other words, it may be argued that the average consumer is not accustomed to this location of garment labels as a source indicator, but instead they are likely to pay greater attention to the distinctive LEVI’S word mark on the ‘pocket tab’. This is because consumers would not appreciate the trademark significance of such a position mark, the protruding ‘pocket tab’, without first being educated that it is used by the proprietor Levi Strauss & Co for that purpose.
However, Levi Strauss & Co was successful in its trademark registrations for the ‘pocket tab’ device, as it was able to show, at the time of application, that although the ‘pocket tab’ device lacked inherent distinctiveness when it was first adopted in 1936, it had acquired distinctiveness through substantial use, a phenomenon referred to in US trademark law as the acquisition of a ‘secondary meaning’.Footnote 26 The US Court of Customs and Patent Appeals in Levi & Strauss & Co v. Blue Bell Inc. explained that the basic element of ‘secondary meaning’ in US trademark law is ‘is a mental recognition in buyers’ and potential buyers’ minds that products connected with the symbol or device emanate from or are associated with the same source’.Footnote 27 In that case, Levi Strauss & Co sued Blue Bell Inc. (the maker and seller of WRANGLER jeans) for trademark infringement of LEVI’S ‘pocket tab’ device for affixing a horizontally disposed, protruding label bearing the mark ‘HONDO’ at the top of an inset pocket for its HONDO line of jeans. The US Court of Customs and Patent Appeals ruled in favour of Levi Strauss & Co and upheld the registration of LEVI’S ‘pocket tab’ device trademark. The court recognised that Levi Strauss & Co had, through extensive use and advertising of the ‘pocket tab’ device, built the device into a mark that prospective customers associated with only one particular seller of jeans in spite of the initial lack of inherent distinctiveness. Blue Bell Inc (WRANGLER) was thus found to be liable for trademark infringement on the ground that prospective buyers upon seeing the protruding HONDO mark on the back pockets of a pair of WRANGLER jeans would conclude that these jeans originated or were in some ways connected with the proprietor of the ‘pocket tab’ device mark, that is Levi Strauss & Co. In other words, the court found that prospective buyers of jeans would be confused by the use of the protruding HONDO mark on a pair of WRANGLER jeans, especially when the assessment was based on an imperfect recollection of the competing marks by prospective buyers.
The fact that the WRANGLER jeans were clearly labelled to indicate source by another label and a paper billboard bearing the distinctive WRANGLER word mark provided no assistance to Blue Bell Inc. in avoiding a finding of confusion on the part of the prospective buyers. The US Court of Customs and Patent Appeals further rejected the argument by Blue Bell Inc that Levi Strauss & Co ‘may not use the trademark laws to obtain a perpetual monopoly on the idea of a protruding pocket label for pants, when the alleged trademark is not limited to any size, colour, or precise location of label, or to any wording on the label, simply because (Strauss) was the first to use this type of label’. It is clear that the court was of the view that the property right conferred on the LEVI’S ‘pocket tab’ trademark was not simply premised on a ‘first-to-use’ basis of a novel fashion concept. Rather, it was based on the finding by the court that the LEVI’S protruding ‘pocket tab’ mark gave the public a reliable indication of source and facilitated responsible marketplace competition.
As a result, Levi Strauss & Co was effectively conferred a property right in the use of a protruding label affixed at a particular location on garments as a distinguishing source indicator. Others are thus prohibited from using a similar label in a similar location on their apparel even if their labels bear a different, clear and distinctive word mark and the apparel is clearly labelled to indicate a different source as demonstrated in Levi & Strauss & Co v Blue Bell Inc.Footnote 28 More recently, Levi Strauss & Co, in a continuing quest to assert its property rights, had sued fashion houses Saint LaurentFootnote 29 and Kenzo,Footnote 30 respectively, for alleged trademark infringement of its signature protruding ‘pocket tab’ mark.
5.2.2 The European Union
Across the Atlantic in the European Union (EU), the European Union Trade Mark Regulation (EUTMR), together with the European Union Trade Mark Implementing Regulation (EUTMIR) and the European Union Trade Mark Delegated Regulation (EUTMDR)Footnote 31 constitute the main legislation governing trademark protection–related aspects in the European Union.Footnote 32 Broadly speaking, the EUTMDR covers procedural rules relating to opposition, revocation and invalidity actions, appeals to the Boards of Appeal, the organisation of the Boards of Appeal, notifications from the Office and communications with the Office, time limits and suspensions and certain procedures concerning international registrations. On the other hand, the EUTMIR covers matters such as the contents of EU trademark applications, representation of EU trademarks, rules on publication and registration, language and translation issues, priority and seniority, transfers and surrenders, EU collective and certification marks and certain procedures concerning international registrations.
Since 2016, new amendments to the EUTMR have been brought forth by amending Regulation (EU) No 2015/2424 of the European Parliament and the Council, which came into force on March 23, 2016 and is now codified as 2017/1001.Footnote 33 As it stands, Recital 10 of the EUTMR indicates that ‘a sign should be permitted to be represented in any appropriate form using generally available technology, and thus not necessarily by graphic means, as long as the representation is clear, precise, self-contained, easily accessible, intelligible, durable and objective’ (emphasis added). Article 4 of the EUTMR that once contained the ‘graphical representation’ requirement has since been amended to remove this requirement.Footnote 34
Art 3(1) of the EUTMIR further reflects Recital 10 and Art 4 (b) of the EUTMRFootnote 35 demonstrating flexibility about NTTMs, but with a willingness to uphold the legal certainty for the parties involved. The latter aspect is reflected by the emphasis given in Art 3(1) EUTMIR on the necessity that the representation of a trademark must conform with the seven prerequisites established in the Sieckmann judgment.Footnote 36 Art 3(3) of the EUTMIR also contains a non-exhaustive list of types of trademarks: (a) word, (b) figurative, (c) shape, (d) position, (e) pattern, (f) colour, (g) sound, (h) motion, (i) multimedia and (j) hologram marks. Amongst the absolute grounds for refusal are those mentioned in Article 7 of the EUTMR.Footnote 37
These legislative amendments in EU trademarks protection provided legal bases for fashion houses and designers to seek stronger and more extensive protection for the use of NTTMs.
5.2.2.1 Christian Louboutin – the Red Sole Mark
Unsurprisingly, in May 2013, French fashion house Christian Louboutin, armed with its victory in the US courts, initiated proceedings before the District Court in The Hague, Netherlands, against Van Haren (a shoe retailer operating numerous outlets in the Netherlands) for selling high-heeled women’s shoes with red soles and as such, alleged that Van Haren had infringed Christian Louboutin’s registered NTTM, namely the ‘Red Sole Mark’.Footnote 38 The District Court in The Hague ruled in favour of Christian Louboutin, upholding in part the claims of Christian Louboutin. Van Haren challenged the judgment of the District Court in The Hague under Article 2.1(2) of the Benelux convention,Footnote 39 claiming that the mark at issue was invalid on the basis that the mark is a two-dimensional figurative mark that consists of a red coloured surface and that the red sole gives substantial value to the shoes marketed by Christian Louboutin since that colour forms part of the appearance of those shoes and plays an important role in a consumer’s decision to purchase them. One issue of contention was whether the concept of ‘shape’, within the meaning of that provision, is limited solely to three-dimensional properties of a product, such as its contours, measurements and volume, or whether that concept also covers properties that are not three-dimensional. In this regard, as the District Court was uncertain, it therefore decided to stay the proceedings and referred the following question to the Court of Justice of the European Union (CJEU) for a preliminary ruling:
Is the notion of ‘shape’, within the meaning of Article 3(1)(e)(iii) of [Directive 2008/95], limited to the three-dimensional properties of the goods, such as their contours, measurements and volume (expressed three-dimensionally), or does it include other (non-three-dimensional) properties of the goods, such as their colour?
In Christian Louboutin and Christian Louboutin Sas v van Haren Schoenen BV,Footnote 40 the CJEU held that, because Directive 2008/95 provides no definition of the concept of ‘shape’, the meaning and scope of that concept must, as the Court consistently held, be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part. In general, under EU law, the concept of ‘shape’ is usually understood as a set of lines or contours that outline the product concerned. Accordingly, it does not follow from Directive 2008/95, the case-law of the Court, or the usual meaning of that concept, that a colour per se, without an outline, may constitute a ‘shape’. Notably, the CJEU held that, although the shape of the product, or of a part of the product, plays a role in creating an outline for the colour, it cannot, however, be held that a sign consists of that shape in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product.
Christian Louboutin’s NTTM, as it was described in the trademark registration, cannot be regarded as consisting ‘exclusively’ of a shape because the main element of that sign is a specific colour designated by an internationally recognised identification code. In answering the question by the Hague’s District Court, the Court clarified that Article 3(1)(e)(iii) of Directive 2008/95 must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe, such as that at issue in Christian Louboutin and Christian Louboutin Sas v van Haren Schoenen BV, does not consist exclusively of a ‘shape’, within the meaning of that provision. French fashion house Christian Louboutin was victorious once again.Footnote 41
5.2.2.2 Louis Vuitton – the Checkerboard Pattern Mark
Despite these wins, other fashion houses and designers have encountered headwinds in their claims for exclusive rights in NTTMs. Louis Vuitton Malletier (LV) is one of them.Footnote 42 In August 1998, LV sought and was granted registration of the ‘checkerboard pattern’ NTTM (also called ‘chequerboard’).
The ‘checkerboard pattern’ is popularly known as the ‘Damier’ and today adorns the surface of many LV products such as bags, wallets, shoes and clothing.Footnote 43 More than a decade later in 2009, Nanu-Nana filed an application for declaration of invalidity of LV’s registered ‘checkerboard pattern’ NTTM on the grounds that it was descriptive, devoid of distinctive character, had become customary in current language/bona fide and established practices of trade, consists exclusively of shape giving substantial value to goods, contrary to public policy or moralityFootnote 44 and/or registered in bad faith.Footnote 45 The Cancellation Division in the Office of Harmonization in the Internal Market (OHIM) approved the application for declaration of invalidity on the bases of Art 7(1)(b) (‘devoid of any distinctive character’), read with Arts 52(1)(a) and 7(3) and 52(2) of the EUTMR. This decision was upheld by the First Board of Appeal of OHIM. LV’s appeal to the European Union General Court (EUGC)Footnote 46 was dismissed. The General Court upheld OHIM’s decision invalidating LV’s registered ‘checkerboard pattern’ NTTM.
Regarding the claim that LV’s NTTM lacked inherent distinctiveness, the EUGC held that the relevant public’s perception is not necessarily the same in the case of a three-dimensional mark (which also consists of the product’s appearance) as compared to a word or figurative mark, which is unrelated to the appearance of products that the mark denotes. In particular, average consumers are not in the habit of making assumptions about a good’s origins based on the shape or packaging in the absence of graphic or word elements. Therefore, it is more difficult to establish distinctiveness in such cases. The more the shape to be protected as a trademark resembles the shape most likely to be taken by the product, the more likely that the trademark is devoid of distinctive character in accordance with Art 7(1)(b) of the EUTMR. The EUGC held that to possess distinctive character, the mark must depart significantly from the norm or customs of the sector to fulfil an essential function-indicating origin. In the present case, LV’s ‘checkerboard pattern’ NTTM has no notable variations as it is the same as traditional form. The weft and warp ‘pattern within a pattern’ are also not notably varied from the conventional presentation.
As to LV’s claim that the ‘checkerboard pattern’ NTTM has acquired distinctiveness, the EUGC held that in the case of a (then) Community trademark, acquired distinctiveness of a mark must be established in all the member states of the European Union before it may be validly registered. In this case, the EUGC was of the view that LV was unable to discharge the requisite burden of proof in respect of acquired distinctiveness in its ‘checkerboard pattern’ NTTM.
5.2.2.3 Adidas – the Three-Stripe Design
Similarly, Adidas has not always been successful in securing exclusivity for its ‘three-stripe’ NTTM in the European Union.
In 2009, Belgian footwear company Shoe Branding Europe BVBA (‘Shoe Branding’) applied to register its two-stripe design as a trademark in the EU. Adidas initiated trademark opposition proceedings alleging that Shoe Branding’s two-stripe design is ‘confusingly similar’ to its well-known three-stripe trademark. Adidas had secured registration of a mark that was described to ‘consists of three parallel equidistant stripes of identical width, applied on the product in any direction’ in Class 25 for clothing, footwear, headgear.
The litigation about the three-stripe and two-stripe NTTMs took the parties all the way to the CJEUFootnote 47 in 2016 and saw the CJEU affirming the lower EUGC’s decision: ‘The difference between two and three stripes placed on a shoe [is] not sufficient to affect the similarities arising from the configuration of the signs at issue and from their position on the side of the shoe [so that] that difference [does] not influence the overall impression produced.’ As such, Adidas was successful in its opposition of Shoe Branding’s application for registration of its two-stripe NTTM.
However, it is interesting to note that sometime in 2014 and in the midst of the two-stripe/three-stripe opposition battle, Shoe Branding filed an application for declaration of invalidity of one of Adidas’ registered three-stripe NTTM.Footnote 48 The Cancellation Division of the European Union Intellectual Property Office (EUIPO)Footnote 49 granted the application for declaration of invalidity, on the ground that Adidas’ NTTM was devoid of any distinctive character, whether in terms of inherent distinctiveness or acquired distinctiveness through use. This decision was affirmed by the Second Board of Appeal of the EUIPO.Footnote 50 Adidas’ appeal to the EUGC to annul the EUIPO’s decision was dismissed.Footnote 51 An important issue before the courts was whether Adidas’ three-stripe NTTM had acquired distinctiveness through use throughout the EU. Agreeing with the EUIPO, the EUGC held that there was hardly any relevant evidenceFootnote 52 to substantiate Adidas’ claim that its three-stripe NTTM has acquired distinctiveness throughout the EU. Accordingly, Adidas’ three-stripe NTTM was also invalidated.
Clearly, there were no winners in the long legal battles between Adidas and Shoe Branding. More recently, in 2021, Adidas sued luxury designer Thom Browne in the US over the latter’s use of a four-stripe design on the ground that it was too similar to Adidas’ three-stripe design. On January 12, 2023, the eight-person jury in the US District Court for the Southern District of New York ruled in favour of Thom Browne.Footnote 53
5.3 The Protection of NTTMs – Problems and Objections
As the above cases demonstrate, the protection of NTTMs is not without difficulties. In certain jurisdictions, the range of registrable NTTMs is limited by the requirement that, in order to be protected as a mark, a sign must be ‘capable of graphic representation’ or be ‘visually perceptible’. Based on this requirement, it becomes practically impossible, or considerably more difficult, to protect non-visual signs such as smells and sounds unless they could be visually represented in some way.
Moreover, from a public policy perspective, some, including one of the authors,Footnote 54 have argued that granting registered trademark rights to NTTMs is problematic and ought to be discouraged or disallowed based on competition and freedom of expression concerns.
For one, NTTMs are signs that often consist of features in product designs such as shapes, patterns or colours that may be common or functional in nature and thus ought to remain in the public domain and be available for use by others in the course of trade. In trademark law lingo, NTTMs are either ‘devoid of distinctive character’ or descriptive of ‘the kind, quality, intended purpose … or other characteristics of good or services’ and as such it is in the public’s interest (in particular, from the perspective of fair competition) to keep them free for all to use. To use the examples referred to above, granting trademark protection to the Bottega Veneta Intrecciato pattern, LV Damier Checkerboard pattern or Louboutin red-sole shoes means that, in practice, no one can copy these designs or produce similar-looking ones. One key reason is because registered trademark protection is potentially indefinite, since marks can be renewed after a 10 year period. As a result, consumers are denied the opportunity to purchase other products with the same features (often with a much lower price tag). Some may argue that this may not be of major concern as consumers are still offered a large number of alternative choices in a market economy – several types of bags or shoes, even without these designs. Still, competitors are foreclosed from producing those product features and consumers cannot be offered less costly, or merely other, alternatives. This runs fundamentally against the principles of the trademark right, whose ultimate objective is to promote market competition, not to protect a monopoly on aesthetic and appealing features.
An additional concern is that the protection of NTTMs ultimately encourages prolonged repetitive use of iconic or popular design features of a product so as to secure and maintain trademark registrations under the concept of distinctiveness acquired through use, forgoing alternative novel and innovative design features. In particular, once a feature receives trademark protection, companies need to continue to replicate it ‘as is’, lest they lose protection because they would be using the ‘marks’ inconsistently. In turn, this may have a chilling effect on creativity and innovation of the enterprises that are proprietors of the NTTMs, with the result that society is worse off overall. For example, every pair of Louboutin shoes, be they for women or men, use the famed red soles today. Likewise, the LV Damier checkerboard pattern is omnipresent across most LV products, particularly its bags. The same applies to the intrecciato weave – albeit in different widths – at Bottega Veneta. Of course, these companies are eager to repeatedly use their marks because doing so drives more consumers to purchase their products. Yet, should companies desire to change their products, consumers would struggle to recognise them because they have become used to the same features in all products. Precisely because of this, LV’s recent attempts to innovate its products has been largely based on reproducing its signature monogram and checkerboard patterns on different materials such as transparent plastic, or as the new menswear designer Pharrell Williams had done, rendering the Damier pattern to resemble pixels and jungle camouflage. Likewise, Bottega Veneta has introduced products with the intrecciato weave in different larger sizes, but this innovation arguably does not depart significantly from the brand’s strategy of using the same iconic pattern on all its products.
In other words, granting excessive protection to NTTMs can also result in limiting investments in product innovation and quality. In particular, the possibility to continue to extract value from the same shapes, colours and patterns protected on an exclusive basis – without competitors being able to copy these features – may lead producers to avoid investing in new products as the above examples demonstrate. This is a serious concern. IP laws are supposed to promote innovation, yet NTTMs could become vehicles to promote standardisation and commercialisation of non-innovative products. This may lead to a loss of creativity, innovation and investment in product quality in the long term with negative consequences for everyone.
5.4 NTTMs and the Legal Requirement of Distinctiveness
The preceding sections discussed the approaches in the United States and European Union on assessing distinctiveness. In Singapore, the highest appellate court, the Court of Appeal, has observed that ‘the criteria for assessing distinctiveness character are the same for all categories of marks. Nevertheless, the perception of the relevant public may not always be the same for all categories of marks, and it may therefore be more difficult to establish distinctive character in relation to some categories (such as shapes, colours, personal names, advertising slogans and surface treatments) than others’.Footnote 55 Regarding colour, for instance, one has witnessed protracted litigation by Cadbury to protect the use of the colour purple for its chocolates, with courts being cautious about granting too wide a monopoly should the trademark registration be approved.Footnote 56
A mark’s inherent distinctiveness must be assessed by reference to the goods or services in respect of which registration is sought as well as the perception of relevant persons, namely the consumers of those goods or services, who is deemed to be reasonably well-informed, observant and circumspect.Footnote 57 The critical question to ask is whether the average consumer would appreciate the trademark significance of the mark in question without being educated that it is used for that purpose.
It is surmised that the most significant objection to NTTMs as registered trademarks relates to the subsistence (or absence) of the element of distinctiveness, which is the cornerstone of a trademark registration. After all, the primary function of a trademark is that of an indicator of origin and distinctiveness, that is, the attribute in a trademark to distinguish goods or services having one business source from goods or services having a different business source. Conventional signs such as words or figurative devices, in particular coined or invented words and unique, one-of-a-kind logos, are examples of trademarks that possess the innate ability to distinguish goods or services. The law refers to such trademarks as possessing inherent distinctiveness.
In contrast, except in rare circumstances, NTTMs are generally found not to be inherently capable of distinguishing the relevant goods and services because it has been widely acknowledged by the courts that the average consumer is not normally accustomed to perceive these marks, such as shapes and single colours, as badges of trade origins before the products have been sold in the marketplace for some time. In other words, the average consumer does not, by reason alone of the mark (a shape, sound or a colour), perceive the goods in question as originating from a particular trader. To qualify for trademark protection, proprietors of NTTMs should thus adduce evidence to show that these signs, though lacking in inherent distinctiveness, have nonetheless acquired distinctiveness through extensive use and substantial market investments.
Indeed, Article 15.1 of TRIPS acknowledges the important distinction between signs that are inherently capable of distinguishing the relevant goods and services and those that are not. In the case of the latter, Article 15.1 provides that member states may make registrability dependent on distinctiveness acquired through use. The concept of ‘distinctiveness acquired through use’ and the applicable test for factual distinctiveness are thus the linchpin of the registrability of NTTMs and constitutes the basis of the validity of the registrations.
Based on this, this chapter now turns to the critical question of distinctiveness of NTTMs and the exposition of the test for acquired distinctiveness by the courts in Singapore and the United Kingdom in recent NTTM decisions with particular attention to shapes.
5.4.1 NTTMs and the Test of Distinctiveness Acquired through Use – Reliance vs Association
Nestlé’s four-finger KitKat chocolate bar has been the subject of multiple legal disputes, particularly concerning its shape and attempts to register it as a trademark. Indeed, in the last decade, Nestlé has been engaged in various trademark opposition and infringement proceedings in the European Union, the United Kingdom and Singapore over its NTTM – a three-dimensional trademark in the shape of its four-finger and two-finger chocolate bar marketed under the name KIT KAT.
In all of these proceedings, Nestlé has persistently argued that its NTTM, although devoid of inherent distinctiveness, has nevertheless acquired factual distinctiveness through use. It is Nestlé’s contention that the correct approach to the assessment of acquired distinctiveness is to show ‘that a significant proportion of the relevant class of consumers perceives the goods designated exclusively by the mark in issue, as opposed to any other trademark which might also be present, as originating from the applicant. This does not require any finding that consumers have, in the past, placed any reliance upon the mark in their transactional behaviour’.Footnote 58 In other words, there is no need to show that the NTTM has played a role in the consumer’s purchasing decision or behaviour. It follows that a ‘mere association’ of the NTTM with the trademark proprietor’s goods, in the sense that if the consumer is to consider who marketed the goods bearing the NTTM, he would identify the trademark proprietor, which is sufficient for a finding by the court that the NTTM has acquired distinctiveness through use. However, Nestle has not found British courts to be receptive to this argument, which has been rejected to date.
Although US courts in cases such as Levi & Strauss & Co v. Blue Bell Inc. and Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc. appear to have adopted the ‘mere association’ test in the determination of distinctiveness in NTTMs, courts in Singapore and the United Kingdom are of a different view. In particular, the Singapore Court of Appeal in Société des Produits Nestlé SA v Petra Foods Ltd (the KitKat case) has unequivocally stated that the correct test for acquired distinctiveness of a trademark in Singapore is the ‘reliance’ test and not the ‘mere association’ test. Under the ‘reliance’ test, the inquiry is whether, by reason alone of the mark, consumers perceive the goods in question as emanating from a particular trader.Footnote 59 The ‘reliance’ in this context is reliance in the specific sense that consumers perceive the mark in question as a trademark and must be contrasted with reliance in the sense that ‘consumers had in the past gone out and made purchasing decisions on that basis’.Footnote 60 The ‘reliance’ test is similarly adopted by the CJEU and the Court of Appeal in the UK.
5.4.2 The ‘Reliance’ Test as the Preferred Test to Assess the Acquired Distinctiveness of NTTMs in the Fashion Industry
The authors are of the view that, even though the KitKat case addressed only shape marks, the Singapore Court of Appeal’s judgment should be applicable to NTTMs beyond merely shapes on the issues of inherent distinctiveness and acquired distinctiveness as the threshold for trademark protection. As such, the ‘reliance’ test propounded by both the English and Singapore Courts of Appeal can, and should, be applied in the assessment of acquired distinctiveness of other NTTMs, such as design features in the form of single colours or combination of colours, monograms, patterns, forms of packaging and trade dress commonly used in the fashion industry.
This test may seem conservative, and even restrictive, to fashion houses and other trademark proprietors, yet it also represents the best compromise between granting trademark protection while still considering the impact of such protection on competition and, in general, expression. Accordingly, the authors support that, between the ‘reliance’ test and the ‘mere association’ test, the ‘reliance’ test is the preferred test to follow in assessing the acquired distinctiveness of NTTMs in the fashion industry. This test accords with both general trademark principles and trademark policy.
5.4.3 Principles
As it is well-known, but it is worth repeating, the registration of a sign or indicia as a trademark confers on the proprietor exclusive rights in perpetuity that effectively impinge other traders’ freedom to operate in the same or similar markets. For well-known signs, this impingement virtually extends to all markets. This legal monopoly is not only lengthy but also extensive and powerful. For example, in the case of an alleged infringement of identical marks on identical goods, there would be no need to show a likelihood of confusion about the origin of a defendant’s goods because, subject to certain defences, confusion is normally presumed (at least in the European Union and several other jurisdictions including the United Kingdom and Singapore) in such cases of ‘double identity’. In turn, the public interest is served if all signs seeking registration fulfil the essential function of a trademark, which is to guarantee the identity of the origin of the marked goods or services to the consumer or end user by enabling him, without the possibility of confusion, to distinguish the goods or services from others that have another origin.Footnote 61 In other words, only those signs that are either inherently distinctive or have acquired distinctiveness through use can perform this important function, that is, to permit consumers to make informed decisions between competing goods from different undertakings in the course of trade, and ought to be registered as trademarks and protected as such.
The application of the ‘reliance’ test to assess acquired distinctiveness through use ensures that the sign or indicia to be registered is worthy of protection by focusing on the need for the proprietor to prove that it has played a role in the consumer’s perception of the sign or indicia in question as a trademark. In the words of the Singapore Court of Appeal in the KitKat case, accepting evidence of ‘mere association’ as sufficient would ‘detract from and undermine the essential function of trademarks, which is to guarantee the origin of goods and services’.Footnote 62
The need to ensure that the sign or indicia seeking registration fulfils the essential function of trademarks is made that much more acute in the case of NTTMs because of a common attribute they all share despite their diverse nature.
More often than not, NTTMs are signs that have never been used as the sole means of identifying trade origin. Instead, they are always used alongside other distinctive trademarks, such as words, logos and other figurative devices. To use the Louboutin red sole as an example, the mark is used along with the word mark on the shoe and the shoe box. As such, courts have referred to these NTTMs as ‘limping’ trademarks as they rely on the presence of other, traditional trademarks, which serve as ‘crutches’.Footnote 63 In the KitKat case, this lengthy passage is worth noting:
There is no absolute rule that a mark that has only been used with other trademarks cannot also on its own distinguish the relevant goods or services … ultimately, the question is whether the mark can stand up on its own as an indicator of trade origin, and in each case, this will depend on the evidence. Nonetheless, where a mark has never been used as a sole badge of origin … this might lend weight to the inference that the trader does not depend on the mark standing alone to serve as a trademark. This is a factor that the trader would have to overcome in proving that the mark has indeed acquired distinctiveness.Footnote 64
The recognition of the ‘limping’ nature of NTTMs is significant, as it affects the evaluation of whether NTTMs, although lacking in inherent distinctiveness, have acquired distinctiveness through substantial use. The adoption and the application of the ‘reliance’ test effectively and aptly places the onus on the proprietor of NTTMs to prove that they are truly able to function as trademarks and, as such, deserving of protection. This first accords with the general principles of trademark law.
5.4.4 Policy
As mentioned, the protracted and often acrimonious legal disputes between fashion businesses, as shown in the cases above, bring to focus the tension that has been created in a particular sector like the fashion industry in which seemingly common shapes, patterns and or a combination of these indicia are conferred intellectual property rights in the form of NTTMs owned by one proprietor to the exclusion of others in the same trade. It is thus accepted that trademark law, as with all other intellectual property laws, requires a careful balancing of the interests of various stakeholders.
Long usage, and often first use, of a particular NTTM, for example, the shape of a product (Bottega Veneta’s intrecciato weave and knot bags), a colour (Christian Louboutin’s red sole shoes), a pattern (Adidas three stripes) or a trade dress (LEVI’s protruding ‘pocket tab’) might result in a substantial degree of market recognition, such that consumers are quick to call to mind or to associate that NTTMs with a particular trader because they have become familiar with that NTTM and therefore recognise it. However, it is submitted that such recognition or association on the part of the consumer does not necessarily guarantee that the consumer is actually relying on the NTTMs as a badge of origin – in other words, that the consumer treats that sign as a trademark or a badge of origin.
Instead, in the authors’ view, the ‘reliance’ test sets an appropriately high bar in the assessment of acquired distinctiveness as compared to the ‘mere association’ test. Consequently, the adoption of this test accords with policy, as it avoids striking a balance too far in favour of the private proprietary interests of trademark owners to the detriment of fair access, market competition and expressive trademark uses in general. As argued above, the problem and danger of overprotection are very real. To conclude the chapter, it is worth repeating what Jacob J (as he then was) adroitly explained in Nestlé v Unilever:
There is a bit of sleight of hand going on here and in other cases of this sort. The trick works like this. The manufacturer sells and advertises his product widely and under a well-known trademark. After some while the product appearance becomes well known. He then says the appearance alone will serve as a trademark, even though he himself never relied on the appearance alone to designate origin and would not dare to do so. He then gets registration of the shape alone. Now he is in a position to stop other parties, using their own word trademarks, from selling the product, even though no-one is deceived or misled.Footnote 65
5.5 Conclusion
Because of their nature, there are unique and serious competition-related and expression-associated problems, which may result from affording overbroad protection to NTTMs. With the various safeguards identified and mentioned, courts around the world have tried, on the one hand, to meet the needs of business for novel branding and marketing strategies in the form of NTTMs (at least in shape marks), while, on the other hand, minimising the ills that NTTMs bring about so as to strike a balance in order to ensure market competition, minimise the overlaps of IP rights and prevent abuses of the trademark system. In our view, the sensible solution adopted by the Singapore Court of Appeal with the ‘reliance’ test strikes the correct balance in protecting trademarks while also safeguarding the general trademark principles and the objectives of trademark policy.
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