Case Closed for YSL & Louboutin

The other shoe has dropped.

In the latest twist to the high-profile legal tussle of the red-soled shoe, Saint Laurent America Inc. is canceling its six counterclaims against Christian Louboutin SA — four without prejudice and two with prejudice.

In court documents filed Tuesday, YSL said it “has decided that these claims are no longer worth pursuing … thus resolving what remains of this litigation and allowing the parties to close the book on this litigation and refocus their attention on their respective fashion creations.”

That means the case, originated by Louboutin in April 2011 for $1 million in damages, could officially be over in about a week, said Louboutin’s lawyer, Harley Lewin of McCarter & English.

Asked if he was relieved, Lewin told Footwear News, “Yes, of course. I’m not at all surprised [YSL did this]. We retain the right to oppose the motion. We’re still discussing it, but chances are 99 percent that it won’t happen.”

In a statement released Tuesday evening, Louboutin said it was “pleased to receive the news of the dismissal announcement by Yves Saint Laurent.”

It added, “We have considered this case closed since last September when the Court of Appeals rendered their ruling reaffirming the validity of our trademark rights on the red sole in the U.S. … [which] deprived Yves Saint Laurent of its claim for cancellation of our trademark.”

The four counterclaims YSL seeks to cancel without prejudice pertain to Louboutin’s trademark registration with the U.S. Patent & Trademark Office in 2008. In September, the Court of Appeals ruled that Louboutin’s trademark should not be enforceable on red-sole shoes with matching red uppers.

“Without prejudice means we have the right to re-file claims to cancel the trademark if Louboutin challenges us again with respect to our designs, ” David Bernstein of Debevoise & Plimpton, YSL’s lawyer, told FN. “We could just finish that now, but it seems like an unnecessary battle since the Court of Appeals has completely ruled in our favor. We’d rather walk away from this now and encourage Louboutin to do the same.”

Meanwhile, YSL’s two counterclaims for tortious interference and unfair competition are being dropped with prejudice because they are based on Louboutin’s efforts in early 2011 to pressure certain retailers to return to YSL the red monochromatic shoes challenged in this case.

Although YSL maintains its view that such actions were wrongful, the firm was able to mitigate some of the damages by reselling the returned inventory at its own boutiques or through e-commerce.

As for whether the French house will sell red-sole shoes again, Bernstein said, “YSL has used red as a principal color since its inception. That’s part of our heritage. So I can’t tell you if or when it’ll happen again, but what this case now makes clear is that we can [use it on monochromatic styles] anytime we want to.”

For its part, the legal community cheers the outcome, said Susan Scafidi, director of Fordham University’s Fashion Law Institute.

“The claims were really just counterclaims that were part of YSL’s strategy when Louboutin filed the initial suit. They were not major claims on their own, but really just what we call the seeds and stems,” she said. “It’s an appropriate way to end this long-running case [and] bring rest to weary soles.”

Intellectual property lawyer David Jacoby of law firm Schiff Hardin agreed: “There’s no reason from an economic perspective to chase down damages you can’t prove. This seems an eminently sensible and rational way to close.”

And for what it’s worth, the dramatic, high-stakes saga “has been fantastic and grand [to watch] from the perspective of copyright limitation on fashion items,” noted Judith Roth, another intellectual property lawyer at Schiff Hardin.

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