Intellectual Property Rights Analysis of Christian Louboutin’s Bullet Shaped Lipsticks Chloe Barker Katie Kruisselbrink Madison Kuczynski Texas A&M School of Law 2020 1 Abstract Overtime, the cosmetics industry has revolutionized not only the demand for cosmetics, but the product design, how the products enter the marketplace, and created a sort of hierarchy with general store-bought cosmetics at the bottom and luxury cosmetics at the top, often determined by the brand and the price of the products. Infamously known for its “Rouge” shade first entering the marketplace on the soles of shoes, Christian Louboutin has expanded from the fashion industry to the cosmetic industry, presenting cosmetic products for the lips, nails, and eyes, available in not only the “Rouge” shade, but many others. With reference to the revolutionized industry, there is a heavy influx of brands creating a strongly competitive market. With the use of patent protection, many brands are now turning their cosmetic creations into intellectual property to receive the protections that come with that status. Louboutin’s creation of the bullet-shaped lipstick is a prime example of turning a cosmetic item into a “work of art” which exudes the probative presence of design protection. While not every brand can profit from the creation and costs of introducing such an “edgy” product, Louboutin’s entrance into the cosmetic industry serves as a key example of the competitive advantage that follows luxury brands, especially in the highly competitive cosmetic industry. This level of competition often results in the issue of counterfeits, which in the cosmetic industry, often provide vast negative impacts. The most counterfeited items are those produced by luxury brands, such as Louboutin. Through strategic business management and introduction in the market coupled with the brand’s luxury status, a brand such as Louboutin is ensured success. 2 Table of Contents I. THE COSMETICS MARKET AND THE PRODUCT AT ISSUE: LOUBOUTIN’S LUXURY LIPSTICK ..................................................................................................................... 4 (A) GENERAL DESCRIPTION OF THE RELEVANT MARKET OF LUXURY COSMETICS ............................ 4 (B) CHRISTIAN LOUBOUTIN’S BRAND RECOGNITION FOR SHOES ..................................................... 5 (C) THE EXPANSION IN THE LUXURY COSMETICS MARKET .............................................................. 7 (D) LOUBOUTIN’S EXPANSION INTO THE LIPSTICK MARKET ............................................................ 7 II. PROCESS OF PROTECTION ............................................................................................... 9 (A) THE IMPORTANCE OF IP RIGHTS FOR LOUBOUTIN LIPSTICK ..................................................... 9 (B) IP PROTECTION FOR COSMETICS: NATIONAL (AND REGIONAL) REVIEW .................................. 11 (1) United States’ Existing IP Protection for the Louboutin Lipstick ................................ 11 (2) The European Union’s IP Rights .................................................................................. 18 (3) China’s IP Rights .......................................................................................................... 21 III. MANAGEMENT OF INTELLECTUAL PROPERTY ASSETS OF THE PRODUCT AND BUSINESS .................................................................................................................................... 27 (A) STRATEGIES IN MARKETING: INFLUENCERS, ADVERTISING, AND SOCIAL MEDIA ...................... 27 (B) LOUBOUTIN’S HISTORY OF ENFORCEMENT ISSUES ................................................................. 28 IV. CONCLUSION ................................................................................................................. 30 3 I. THE COSMETICS MARKET AND THE PRODUCT AT ISSUE: LOUBOUTIN’S LUXURY LIPSTICK (A) General Description of the Relevant Market of Luxury Cosmetics Protecting one’s ideas and creations is the foundation and priority of intellectual property laws. Intellectual property law creates an advantage via protection where there is novelty, originality and creation. As for a business, protecting intellectual property heightens the market value of the business through licensing, sale and commercialization, turns mere ideas into profit-making assets, and provides brand recognition via trademarks and geographical indications. 1 The global cosmetics industry is worth over $500 billion.2 Millennials are the biggest cosmetic shoppers and spend the most—on average 25% more than other shoppers.3 The first metal lipstick tube was patented in 1917 by inventor William Kendall.4 A basic lipstick tube, lipstick packaging has developed into far more complex designs. Now, each brand has its own unique packaging that allows consumers to identify a brand of lipstick just by 1 Intellectual Property: the basics, NI BUSINESS INFO (last accessed September 25, 2020) https://www.nibusinessinfo.co.uk/content/advantages-protecting-intellectual- property#:~:text=There%20are%20many%20advantages%20to,of%20protected%20products%20or%20services. 2 Cosmetic Industry Design Patents, INQUARTIK (last accessed August 30, 2020) https://www.inquartik.com/inqr- cosmetic-industry-design-patents/. 3 Theresa Avila, I’m About to Spend $90 on a Lipstick. Here’s Why That Might Actually Make Sense, MIC (Aug. 12, 2015) https://www.mic.com/articles/123672/i-m-about-to-spend-90-on-a-lipstick-here-s-why-that-might-actually- make-sense. 4 Cosmetic Industry Design Patents, supra note 2. 4 its component by using thematic colors, different exterior textures, mirrors, and as we will detail further here, changing the exterior to resemble a specific item.5 The lipstick market alone is valued at $13.1 billion.6 The classic lipstick tube is the most common type of applicator but in recent years, liquid lipsticks have risen in popularity.7 Lipsticks are often divided by the finish of the lipstick: matte, glossy, lip powder, etc.8 Some key players operating in the lipstick market include L’Oreal, Estee Lauder, Revlon, Christian Dior, and MAC.9 Some of the most popular retailers for luxury lipstick include Sephora, Nieman Marcus, Nordstrom, and Saks Fifth Avenue. Lipstick prices can range from just a few dollars to $62,000 for Guerlain’s lipstick because the tube is made of gold and diamonds.10 (B) Christian Louboutin’s Brand Recognition for Shoes Christian Louboutin is most known for its iconic—and expensive—red outer-sole shoes. The red soles made Louboutin stand out among luxury brands. Christian Louboutin wanted to create a shoe that empowered women and came upon the idea for the red bottom shoes while watching his assistant paint her nails red.11 The color red is bold and sexy, and from there, the shoe gained popularity.12 Jennifer Lopez even released a song specifically about Louboutin in 2009. Possibly the most influential example is Carrie Bradshaw (Sarah Jessica Parker) in Sex and the City, with her bold fashion choices and devotion to her Louboutin shoes. The show and movies received enormous attention where Bradshaw served as a style icon to the viewers and wore Louboutin’s in many episodes. Louboutin now sells over 700,000 pairs of shoes a year13. 5 See Nicola Dall’Asen, 25 lipsticks we’d buy just based on the beautiful packaging, REVELIST (Aug. 16, 2017) https://www.revelist.com/makeup/lipstick-packaging/8885/paul--joe-pearl-lipstick/1 6 Lipstick Market Size, Share & Trends Analysis Report By Product (Shimmer, Matte), By Applicator, By Age, By Distribution Channel, By Region, And Segment Forecasts, 2019 – 2025, GRAND VIEW RESEARCH (July 2019) https://www.grandviewresearch.com/industry-analysis/lipstick-market. 7 Id. 8 Lipstick Market by Product Type (Matte, Glossy, Lip Powder, and Others), Form (Stick, Liquid, and Palette), and Distribution Channel (Supermarkets/Hypermarkets, Specialty Stores, and Online Stores): Global Opportunity Analysis and Industry Forecast, 2019–2026, ALLIED MARKET RESEARCH (Dec. 2019) https://www.alliedmarketresearch.com/lipstick-market. 9 Id. 10 Allie Flinn, 11 Weird But True Facts About Lipstick, BYRDIE (Dec. 19, 2018) https://www.byrdie.com/crazy- lipstick-facts 11 The Secret Behind the Red Soles of Christian Louboutin, CATAWIKI (last accessed September 15, 2020) https://www.catawiki.com/stories/4533-the-secret-behind-the-red-soles-of-christian-louboutin. 12 Id. 13 Y-Jean Mun-Delsalle, Q&A With Christian Louboutin, the French King of Sole, FORBES (Fe. 25, 2016) https://www.forbes.com/sites/yjeanmundelsalle/2016/02/25/qa-with-christian-louboutin-the-french-king-of- sole/#49f7c0bb271f. 5 In addition, the brand has entered many collaborations as part of their strategy to further endorse its products. For example, in 2012, Disney commissioned Louboutin to create a pair of shoes inspired by Cinderella slippers. These truly one-of-a-kind shoes were limited in pairs and were used to endorse the re-release of Cinderella the Diamond Edition. In today’s modern-era, Louboutin strategically entered the technological market with the creation of Louboutinize, an easily downloadable application. Using their fortune and status to their advantage, Louboutin launched their app in 2012 to aid users in finding stores, saving products to a wish list, viewing the latest commercials/advertisements, access to new seasonal collections, and providing the user with the history of Louboutin products. 6 (C) The Expansion in the Luxury Cosmetics Market Because of its famous shoes, the Louboutin brand has an unequivocal