Japanese IP High Court Steps on Louboutin’s Toes (Again) Over its Red Sole Mark

Katie Graham is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On December 26, 2022, the Japanese IP High Court dismissed an appeal from Christian Louboutin (“Louboutin”), a shoe designer known for its iconic red-bottom heels, in its action against Japanese shoe designer, Eizo Collection Co., Ltd. (“Eizo”), to shut down Eizo’s use of red soles on high-heeled shoes.

In May 2019, Louboutin sued Eizo under the Unfair Competition Prevention Law, seeking a permanent injunction against Eiko’s production of red-soled high heels and damages of approximately CAD 43,500. The Tokyo District Court ruled against Louboutin by finding red soles insufficient as a source indicator, and that the likelihood of confusion among consumers is therefore low. The IP High Court affirmed the judgment and placed particular emphasis on the following factors to assess the likelihood of confusion:

The relevant consumers in the Japanese shoe market (women from their 20s to 50s) are likely to try on multiple shoes before purchasing ones that fit in a physical store;
The market can be divided into three categories: (i) luxury brand products, (ii) affordable brand products, and (iii) inexpensive no-name products;
The shoes in question, as well as most high-heeled shoes, bear a brand name or logo on the insole so that consumers can distinguish between trade sources; and
E-commerce websites post images of ladies’ shoes and identify the trade source for the respective goods in advertisements (Masaki Mikami).

While Louboutin’s products retail for JPY80,000 ($613) and over and fall within the luxury brand market, Eizo’s shoes occupy the affordable or no-name brand markets, with an average retail price of JPY17,000 ($130). As such, the court ruled that, despite the resemblance of the colour of Louboutin and Eiko’s outsoles, the likelihood of confusion amongst consumers is low since each company occupies a different position in the market.

Relying on the fact that Louboutin is not the exclusive supplier of red-soled high heels in Japan and only 51.6% of targeted women in their 20s to 50s residing in major Japanese cities recognized Louboutin at the sight of a red-soled high-shoe, the IP High Court rejected Louboutin’s assertion of its remarkable reputation amongst consumers. The court also took issue with Louboutin’s market research. The 3,149 individuals surveyed were luxury retail shoppers and were only presented with Louboutin’s products, not Eizo’s.

This loss for Louboutin follows several years of rejections from the Japan Patent Office (JPO) and JPO Appeal Board to register its trademark for a colour mark consisting of a red (Pantone 18-1663TP) coloured in soles for use in high heels filed on April 1, 2015 (TM App no. 2015-29921). In April 2015, Japan opened the gate for non-traditional trademarks, including colour, sound, and motion . As of November 2020, however, the JPO only registered 8 colour marks out of 543 applications for colour marks. The JPO refused the mark based on Article 3(1)(iii) of the Japan Trademark Law, stating that Louboutin’s colour mark lacks distinctiveness to be deemed as an indicator of source for Louboutin in the Japanese market.