The highly anticipated ruling involving high-fashion shoe designer Christian Louboutin came yesterday from the Second Circuit. Reversing in part, the appeals court ruled that a single color could in fact serve as a trademark in the fashion industry- Louboutin’s contrasting red sole among them. This ruling is consistent with the Supreme Court’s decision in Qualitex v. Jacobson, eradicating the district court’s theory that when it came to clothing, color is functional and inappropriate for trademarks.

However, the case was not an outright win for Louboutin. While it held that there is no reason a single-color mark in the fashion industry cannot acquire secondary meaning and serve as a source identifier, the Second Circuit found that red sole’s are only associated with Louboutin when the sole contrasts with the rest of the shoe. Therefore, rival Yves Saint Laurent’s (YSL) all-red shoes do not infringe their mark. The court ordered the U.S. Patent and Trademark Office to modify Louboutin’s registration, since it previously covered a “red sole on footwear,” and did not limit the trademark to the contrasting sole.

Both parties can claim a victory. YSL has dodged infringement claims; Louboutin has safeguarded its mark. But the real win here is for the fashion industry. The lower court’s ruling had cast doubt on established trademark law, which recognized color as a trademark where it had taken on secondary meaning as a distinctive symbol identifying the brand (for example, Tommy Hilfiger which uses distinctive green buttonholes on its clothing and Tiffany & Co.’s “Tiffany Blue”). Michael Allan of Steptoe & Johnson LLP says the industry will certainly welcome the ruling because it ensures companies that have invested major resources into promoting their brand with color will stay protected.

Most importantly, the opinion provided plenty of guidance for the fashion industry going forward by emphasizing the limited scope of protection a single color enjoys in this context so as to not completely hinder commerce and competition.