Louboutin Unsuccessful in Litigation over Red Soles

On March 11, 2022, the Tokyo District Court dismissed allegations by Christian Louboutin who claimed red-soled shoes distributed by the defendant infringe their intellectual property right and are liable for damages under the Unfair Competition Prevention Law.

[Judicial case no. H31(Wa)11108]

Louboutin’s red soles

Christian Louboutin SAS alleged heels and pumps with red-lacquered leather soles (Pantone 18-1663) perse (see below) have been famous as a source indicator of Louboutin shoes as a result of substantial use for more than two decades in Japan.

To demonstrate the remarkable reputation of the position mark with a single color, Louboutin produced a lot of evidence. Japanese subsidiary generated sales of JPY3,305 million for Ladies’ shoes in 2016. More than 70% of the shoes are heels and pumps with red-colored soles. The company has yearly spent JPY15 million and more on advertisements in Japan. According to the interview conducted in October 2020, 65% of the 3,149 interviewees (females aging from 20 to 50) answered Louboutin when shown the above image.


Disputed goods

Allegedly, Eizo Collection Co., Ltd., a Japanese business entity, began to distribute ladies’ shoes with red-colored rubber soles bearing the wordmark “EIZO” for JPY17,000 from May 2018 (see below).

In the litigation, Louboutin sought a permanent injunction, disposal of the disputed shoes, and damages in the amount of JPY4,208,000.

It should note that Louboutin’s attempt to register the position mark representing ladies’ heels with red-colored soles in 2015 has been pending by the Japan Patent Office due to a lack of inherent and acquired distinctiveness as of now.


Court decision

The Tokyo District Court denied a certain degree of reputation and popularity of the red soles to indicate Louboutin shoes by stating:

  1. Red color has been commonly used on shoes to enhance the aesthetic appearance and attract consumers. Ladies’ heels with red-colored soles have been widely distributed even before the launch of Louboutin shoes in Japan.
  2. Under the practice in commerce, two decades and advertisement would be insufficient to find Louboutin’s red soles have played a role in the source indicator in Japan.

Besides, the court found the unlikelihood of confusion between Louboutin and the defendant’s shoes on the grounds that:

  • Given Louboutin’s shoes are known for high-end heels that cost JPY80,000 and more, relevant consumers would pay attention to selecting and purchasing suitable goods. Being that Louboutin’s shoes has the stylized mark “Louboutin” on soles as well, it is unlikely that relevant consumers connect the defendant’s shoes bearing the wordmark “EIZO” on soles with Louboutin.
  • Because of the difference in respective materials on soles (lacquered leather for Louboutin, and rubber for defendant shoes), there exists a distinction in texture and luster to the extent that relevant consumers can easily distinguish the quality and source of respective goods.
  • The interview targeted consumers who have purchased high-end goods and famous brands. Since the interview failed to show the defendant’s shoes to the interviewees, it would be irrelevant to prove a likelihood of confusion between the shoes.

Based on the foregoing, the court dismissed the plaintiff’s allegations under the Unfair Competition Prevention Law and did not side with Louboutin.

Tokyo District Court awards record damages of JPY200M over a dead copy of bra design

The Tokyo District Court, on September 3, 2021, awarded record damages of 202 million Japanese Yen to Co-medical who brought a lawsuit against VIDAN under the Unfair Competition Prevention Law, accusing the defendant of unlawfully imitating P’s bra design bearing a trademark “Funwari Room-Bra.”
[Judicial case no. Reiwa1(Wa)11673]


Plaintiff, Co-medical Co., Ltd., has launched the sale of brassiere for use at home under the trademark of “Funwari Room-Bra” on September 12, 2016. By virtue of comfort to wear and elegant design of non-wired bra with adjustable breast support band under the cups and longline lace frill (see below left), the bra was a huge hit, ranked No. 1 on Amazon Japan. Total sales over three year period exceeded 1.4 million bras.   

In October 2018, the defendant began to sell non-wired bras under the trademark of “Moriage” (see above right) that has substantially the same configuration as P’s “Funwari Room Bra.” Sales of D’s bra reached 30 million JP Yen by the time D terminated the sale in September 2019.

Co-medical filed a lawsuit at the Tokyo District Court in May 2019, and argued the configuration of D’s bras constitute an act of unfair competition under Article 2(1)(iii) of the Unfair Competition Prevention Law that prohibits “commercial act to assign goods that imitates the configuration of another person’s goods unrelated to achieve a technical function before the lapse of three years from the date of release in Japan.” If so, given substantial resemblance in shape and design between two bras, D shall be liable for 202 million JP Yen damages caused by their act under Article 5(2) and attorney fee.


The court found D’s bra constitutes an unfair competition act prohibited under Article 2(1)(iii) and awarded damages of 200 million JP Yen over a dead copy of bra design by stating as follows.

  • There is a slight difference in details between the two bras. However, since it would not affect a whole configuration, in fact, D’s bra shall be deemed practically identical with P’s bra in shape.
  • In view of the recent popularity and advertisement of P’s bra, there is reasonable doubt that D in the same trade would have been aware of and knowingly relied on P’s bra to manufacture their bra.
  • Under Article 5(2), D’s profit gaiend by their unfair act shall be construed marginal profit, calculated by deducting direct costs incurred to manufacture and sell D’s bras from the sales. Therefore, D is liable for 184 milliom JP Yen damages. Besides, the court has a good reason to believe that 18 million JP Yen shall be awarded as damages to recover P’s attorney fees.

IP High Court affirmed TM infringement in favor of Wenger over cross design

On April 21, 2021, the Japan IP High Court affirmed the Tokyo District Court’s decision in favor of Wenger S.A. and ruled to dismiss the appeal brought by TravelPlus International who was sentenced for trademark infringement by using cross design marks similar to the Wegner cross on backpacks. [Court case nos. IP High Court Reiwa2(ne)10060]

WENGER

Wenger, the Swiss company, has owned international registration no. 1002196 for the cross mark (see below) for use on backpacks of class 18 and others goods in Japan since November 5, 2010.

SWISSWIN

TravelPlus International (TI) distributed “SWISSWIN” brand backpacks adorned with a logo evoking the Swiss flag which consists of a cross surrounded by a square in Japan. According to the court decision, an affiliated company of TI has produced the Wenger bags as an OEM vendor.   

IP High Court ruling

The IP High Court dismissed the appeal entirely and issued a decision addressing the interpretation of similar marks evoking the Swiss flag that is unregistrable under the Trademark Law.

1. Evaluation of color difference on cross design

TI argued color difference shall be a crucial factor in this case based on Article 4(1)(iv) of the Japan Trademark Law that prohibits registration of an identical or similar mark to the Red Cross.


However, the judge denied the allegation by stating that any cross design dissimilar to the Red Cross can be registrable under the article. If so, it does not make sense to find the color difference on cross designs that would materially affect the similarity of the marks. Both marks should be assessed in their entirety by taking account of other elements as well.

2.  Assessing figurative element except for cross design

TI argued both marks should be assessed similarly on the assumption that the square plays a dominant role of source indicator based on Article 4(1)(i). Any mark identical or similar to a foreign national flag is unregistrable under the article. If so, it should not be allowed to claim trademark infringement based on the cross design which is undoubtedly similar to the Swiss flag.

However, the judge dismissed the allegation and reiterated its stance that in finding similarity of the mark, both marks should be assessed in their entirety, not only with the square but also the cross, since both marks just consist of these elements.

Hermès beat Birkin Bag Imitator for Trademark Infringement

On December 17, 2020, the Japan IP High Court upheld awards for JPY2,900,000 for damages suffered by Hermès in relation to a trademark infringement and passing-off case regarding the Birkin Bag imitations.
[Court case no. Reiwa2(Ne)10040]

Hermès Birkin Bag

HERMES INTERNATIONAL, a French luxury fashion house, has owned Japanese trademark registration no. 5438059 for the 3D shape of the “Birkin” bag in connection with handbags of class 25 since 2011 by successfully demonstrating acquired secondary meaning as a specific source indicator of Hermès’ luxury bags.

The iconic Birkin bag was firstly created for Jane Birkin in 1984. It is known for its superior craftsmanship and jaw-dropping price tag, with standard models starting around JPY1,000,000. Its annual sales figures exceed 3,000 in 1998, 8,000 in 2003, and 17,000 in 2009.

Birkin Bag Imitations

Hermes sued Kabushiki Kaisha Tia Maria at the Tokyo District Court for violating its trademark right and the unfair competition prevention law by allegedly promoting 100 or more Birkin look-alike bags (see below) in Japan with a price tag of JPY27,300 from August 2010 to February 2018.

Court decision

On June 3, 2020, the Tokyo District Court decided in favor of HERMES INTERNATIONAL and awarded damages for trademark infringement and passing-off in the amount of JPY2,900,000.
[court case no. Heisei31(wa)9997]

In the decision, the Tokyo District Court found that Hermès Birkin Bag has acquired distinctiveness and become remarkably famous as a source indicator of Hermès’ luxury bags by 2009.

Besides, the court held that defendant’s goods constitutes an infringement of the 3D shape of the “Birkin” bag trademark since both are confusingly similar in view of the following aspects:
(a) a distinctive three-lobed flap design with keyhole-shaped notches to fit around the base of the handle, (b) a dimpled triangular profile, (c) a closure which consists of two thin, horizontal straps designed to fit over the flap, with metal plates at their end that fit over a circular turn lock, (d) a padlock which fits through the center eye of the turn lock and (e), typically, a key fob affixed to a leather strap, one end of which is affixed to the bag by wrapping around the base of one end of the handle.

Screen capture of TIA MARIA’s website (http://tiamaria.zf.shopserve.jp/SHOP/V1172S.html)

The court measured damages to recover (i) defendant’s actual sales of infringing bags (JPY2,730,780) by subtracting appropriate variable cost (40% of the offered price) for JPY1,638,468, (ii) “mental suffering” caused by an infringement for JPY1,000,000, and (iii) reasonable attorney fee for JPY260,000.

The district court decision was challenged by the defendant before the High Court to set aside or vary it, however, the IP High Court dismissed the appeal entirely and sided with HERMES INTERNATIONAL.

To read a full text of the IP High Court decision (Japanese only), click here.

Court Case: Parallel imports of trademarked goods in Japan

In a trademark dispute pertinent to parallel imports, on October 22, 2020, the Japan Tokyo District Court allowed the parallel import of “2UNDR” men’s underwear from Singapore into Japan.
[Court case no. Heisei30(Wa)35053]

2UNDR

Harris Williams Design Inc. (Harris), a Canadian corporation, is an owner of Japanese Trademark Registration no. 5696029 for the mark “2UNDR” over men’s underwear, clothing, and others in class 25 as well as Canadian Trademark Registration for the same mark, jointly with EYE IN THE SKY CO, Ltd., an exclusive distributor and licensee in Japan, sued Kabushiki Kaisha Bright, a Japanese company who imported and distributed 2,387 pcs of men’s underwear bearing the “2UNDR” mark as follows in Japan, for trademark infringement.

Defendant argued the goods in dispute were all purchased from a Singapore company M-Golf which was originally imported to Singapore under the license of another Canadian corporation owned by the CEO of Harris. If so, the import of the 2UNDR goods in Japan would not constitute trademark infringement and it is not prohibited the defendant from selling such goods in Japan as a parallel importer.

Parallel imports

Parallel imports involve the import and distribution of genuine trademarked goods by parties other than the trademark owner or their agent. In contrast to counterfeit products, products that are the subject of parallel imports were produced abroad with the consent of the trademark owner.

The plaintiffs contended the defendant’s act would be anything but permissible since M-Golf has been restricted under trademark license to export the licensed goods out of Singapore. Besides, when the defendant purchased the disputed goods, M-Golf was no longer an authorized distributor in Singapore. Therefore, defendant goods would never be construed the genuine products as a matter of law.

Supreme Court Ruling

In the “Fred Perry Case” decision ruled on February 27, 2003, the Japan Supreme Court established the criteria to determine whether parallel imports shall constitute trademark infringements, by relying on ‘functional theory’:

  1. Is the trademark affixed on the goods, which the alleged infringer wishes to import, by the trademark owner or with its consent in the country of export?
  2. Is the party who owns trademark right in the country of export also an owner of Japanese trademark right for the same mark or closely associated with the owner so that the trademark affixed in the country of export could indicate the same source with a registered mark in Japan?
  3. Is the owner of Japanese trademark right, directly or indirectly, effectively in control of the quality of imported goods with the trademark which is sought to be enforced so that the imported goods would be estimated virtually identical in view of quality with the goods placed on the market under the same trademark by the owner in Japan?

Given the answer to the above three tests is yes, the essential function of a trademark, namely “source indicator” and “quality assurance”, would not be harmed by virtue of parallel imports in fact. In this respect, parallel imports shall be permissible even if the defendant’s act nominally constitutes trademark infringement.

Tokyo District Court Decision

In line with the criteria, the Tokyo District Court found that answer to the first test is “yes” because the 2UNDR mark was originally affixed on the disputed goods under a license of Harris in Canada. The territorial restriction imposed on a licensee and termination of license agreement would be irrelevant to the test.

Unquestionably, the answer to the second test is “yes” since Harris is the sole owner of Japanese trademark registration and Canadian trademark registration for the 2UNDR mark. If so, both marks indicate the same source of origin as a matter of course.

As for the third test, the court could not find a reasonable ground to believe that territorial restriction is beneficial to assure the quality of men’s underwear by taking into consideration such goods would neither easily decline quality nor damage during shipment. Besides, there seems no difference in quality between the defendant’s imported goods and the plaintiff’s 2UNDR goods distributed in Japan. Therefore, the court held the case satisfies the third test as well.

Based on the foregoing, the court decided the defendant’s act to import and distribute the disputed goods in Japan would not adversely affect the essential function of the 2UNDR mark owned by plaintiffs and thus permissible as parallel imports under the Trademark Law.

Click here to read the full decision