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Case: 11-3303

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DEBEVOISE & PLIMPTON LLP

919 Third Avenue New York, NY 10022 Tel 212 909 6000 www.debevoise.com David H. Bernstein Partner Tel 212 909 6696 Fax 212 521 7696 dhbemstein@debevoise.com

February 8, 2013 BY ELECTRONIC AND HAND DELIVERY Catherine O'Hagan Wolfe Clerk of Court U.S. Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007
Re:

Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc., No. 11-3303-cv (2d Cir.), No. 11-cv-2381 (VM) (SDNY); U.S. Trademark Registration No. 3,361,597

Dear Ms. O'Hagan Wolfe: We represent Yves Saint Laurent America, Inc., Yves Saint Laurent America Holding, Inc. and Yves Saint Laurent S.A.S. (collectively, "YSL") in the abovereferenced matter. We write in response to the January 25, 2013 request by Christian Louboutin S.A. and Christian Louboutin (collectively, "Louboutin") that this Court modify its Mandate issued to the U.S. Patent and Trademark Office ("USPTO") to amend Louboutin's "Red Sole" trademark (Reg. No. 3,361,597). As detailed below, we respectfully submit that the Court's Mandate was clear and consistent with the substance of the Court's opinion in this matter. It should not be altered. The alternative language proposed by Louboutin, by contrast, is at odds with the Court's opinion, would dramatically expand Louboutin's rights beyond what the Court intended, and would have serious anti-competitive effects on YSL and other designers. In fact, certain models of YSL red monochromatic shoes that were in the record in this case would constitute "uses" of Louboutin's mark if Louboutin's formulation were adopted. Such a result would be contrary to one of this Court's key holdings in the case that use of a red sole on a red shoe is not a use of Louboutin's mark.

New York Washington, D.0 London Paris Frankfurt Moscow Hong Kong Shanghai

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Ms. O'Hagan Wolfe Background

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On September 5, 2012, this Court issued its opinion in this matter, affirming the district court's denial of Louboutin's motion for a preliminary injunction and reversing in part the order of the district court insofar as it purported to deny trademark protection to Louboutin's use of a red outsole that contrasts with a shoe's upper. The Court found that it is the contrast between the sole and the upper that causes the sole to 'pop,' and to distinguish [Louboutin as] its creator." Op. at 29. The Court held that only in those circumstances where the sole contrasts with the upper does Louboutin's use of a red sole qualify for trademark protection. The Court further held, therefore, that any trademark rights Louboutin may have in use of a red solesdo not apply when the sole and the upper do not contrast. Op. at 29-30.

Whether Louboutin does have trademark rights, and whether those rights would prevent use of a red sole in other contexts, is beyond the scope of the limited issue now before the Court. For example, this Court expressly left for another day the question of whether Louboutin's trademark, even as modified by the Court, is aesthetically functional. Op. at 30. Further, although the Court held based on what it described as "undisputed facts" that the modified trademark has secondary meaning, Op. at 27, YSL did in fact vigorously dispute that issue below, including through survey evidence that demonstrated that only 24% of relevant consumers associate red soles exclusively with a single source, the determinative factor in measuring whether a trademark has attained secondary meaning. See A-1092-A-1312; Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277, 295 (7th Cir. 1998) ("figures in the 30% range [are] marginal and [do] not establish secondary meaning as a matter of law"); see also A-1313-1358 (record evidence demonstrating extensive third party use of red outsoles). YSL does not dispute that red soles are strongly associated with Louboutin, Op. at 5, but YSL does dispute that red soles are exclusively associated with Louboutin. That issue was never reached by the District Court in light of its ruling on functionality, nor need it be reached by this Court at this time given the limited issue now before the Court; in the event of any further disputes between the parties, YSL can press those arguments then, along with its arguments that its use of the color red on non-monochromatic shoes (perhaps similar to its use of red outsoles on its Chinese collection, see A-977-79 (Vaissie Decl. 18(b)&(c)), as shown below), has been a fair use (which also was disputed below but not addressed by this Court or the District Court).

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Consistent with that opinion, the Court issued its Mandate on September 27, 2012 directing the UPSTO to make an appropriate entry to reflect that Louboutin's trademark is "limited to a red lacquered outsole on footwear that contrasts with the color of the adjoining ("upper") portion of the shoe." In precise accordance with the exact language of the Mandate, the USPTO proposed the following modification to the Red Sole mark (changes to the current description are underscored): The color(s) red is/are claimed as a feature of the mark. The mark consists of a lacquered red outsole on footwear that contrasts with the color of the adjoining remaining portion of the shoe (known as the `upper'). The dotted lines are not part of the mark but are intended only to show placement of the mark." In letters to the USPTO and its January 25 letter to this Court, Louboutin has proposed a very different formulation, which would broaden the scope of Louboutin's rights dramatically. Louboutin's proposal is as follows (again, with the changes to the current description underscored): The color(s) red is/are claimed as a feature of the mark. The mark consists of a lacquered red outsole on footwear that contrasts with the color of any visible portions of the shoe." Louboutin's Proposed Modification Should Be Rejected The modification proposed by Louboutin should be rejected for several reasons. Most fundamentally, it would confer rights that find no support whatsoever in this Court's opinion. The Court simply did not hold that Louboutin has trademark rights in use of a red sole that contrasts with any visible portion of the shoe." The Court was very specific that whatever trademark rights Louboutin may have arise only where the "contrast between the sole and the upper [] causes the sole to 'pop. . .'" Op. at 29. Given the Court's express use of the term "upper" in the portions of the opinion describing the limitations on any rights Louboutin may have and in the Mandate to the USPTO, Louboutin's suggestion that the term "upper" be deleted and replaced with the far broader phrase any visible portions of the shoe would be contrary to the Court's clear direction and intent. It also would have serious anti-competitive effects. It would grant Louboutin the right to claim as infringing otherwise monochromatic red shoes (red shoes with red soles), but which feature some ornamentation, however insignificant, such as a black heel cap or a gold buckle fastened to the toe. Such shoes could hardly be considered a use of Louboutin's mark in the absence of a contrasting upper that causes the red sole to "pop." Indeed, the record before the Court included several prior models of YSL monochromatic red shoes with non-red ornamentation, including the examples

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below (which include, respectively: a gold buckle on the toe and a black heel cap [A-981 (Vaissie Decl. 18(h), from YSL's Pre-Fall 2006 collection (on the left))]; jeweled embellishment, a small gold buckle on the strap, and a black heel cap [A-981 (Vaissie Decl. 18(i), from YSL's Pre-Fall 2008 collection (in the middle))]; and black insoles and ornamentation [A-976 (Vaissie Decl. 16, YSL red shoe from the 1970s (on the right))]):

The red outsole on these shoes did not "pop" because it was the same red as the upper of the shoe. Under Louboutin's proposed formulation, though, these and other monochromatic YSL shoes would be a use of Louboutin's trademark, and thus subject to challenge, because there would be a contrast between the red sole and some "visible portion of the shoe." That result would be contrary to the Court's ruling that use of a red lacquer on the outsole of a red shoe of the same color is not a use of Louboutin's mark. Op. at 30 (emphasis added). Louboutin's suggestion that the Mandate's limitation should not apply if any "visible portion of the shoe is any color other than red appears to be based on footnote 25 from the opinion, in which the Court stated: As noted above, we use the word `upper' to refer to the visible portions of the show other than the outsole." That footnote, though, was not an accurate summary of the Court's more nuanced description in the body of the opinion. Rather as the Court more fully noted in describing the various parts of a shoe, the term "upper" refers to a portion of the shoe distinct from other portions of the shoe. Specifically, in describing YSL's monochrome shoes, the Court explained that the "YSL shoes in the monochrome style feature the same color on the entire shoe, so that the red version is all red, including a red insole, heel, upper, and outsole." Op. at 6. That description is consistent with the undisputed facts in the record that establish that both parties use the term "upper" to refer to a portion of the shoe distinct from the heel, the outsole, and the insole. See, e.g., A-886, A-892, A-893, and A-922 (deposition testimony of Mr. Louboutin and of YSL's shoe designer distinguishing between the upper, heel, platform, and sole of various shoe models). While YSL's concern about the anti-competitive effect of Louboutin's proposed formulation is grounded in evidence in the record, Louboutin's purported concern that the USPTO's proposed formulation "creates ambiguity" is unsubstantiated. The USPTO's

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formulation, which derives precisely from the Court's Mandate, provides perfectly clear guidance. No matter how clear the standard, however, a lawyer will always be able to concoct hypothetical situations which give rise to close questions. The examples Louboutin provides in its letter to try to support its argument concerning "ambiguity" should therefore be disregarded. None of these examples were in the record in this case. Indeed, they are not even real; Louboutin asks the Court to "assume that they have red soles when in fact Louboutin's letter to the USPTO made clear that they do not. This Court should decline Louboutin's invitation to change its Mandate in order to address fanciful hypothetical concerns posited by Louboutin's counsel. In light of the foregoing, YSL respectfully urges the Court to deny Louboutin's request that the Court modify its Mandate, to instruct the USPTO to proceed with its proposed modification, and to make clear that any use of a red outsole on a red shoe (including the examples from the record that are shown on page 4 above) is not a use of Louboutin's mark and is not subject to challenge by Louboutin in the future (given that Louboutin has acknowledged in the stipulated Order of Dismissal that it has no further claims in this case or otherwise arising from the trademark of Louboutin as modified by the Court of Appeals against YSL over red monochrome shoes," see Dkt. No. 81). Please let us know if the Court would find any further submissions helpful or would like the parties to appear for any reason. Thank you for your attention to this matter. Respectfully submitted,

David H. Bernstein cc: Harley Lewin, Esq. (by email) Lee Bromberg, Esq. (by email) Susan Upton Douglass, Esq. (by email) Thomas L. Casagrande, Esq. (by email)