NEW YORK — Fashion’s battle over red has ended with a white flag.

This story first appeared in the October 17, 2012 issue of WWD. Subscribe Today.

After a highly publicized legal tug of war that lasted a year and a half, Yves Saint Laurent SA said Tuesday that it will drop its lawsuit against Christian Louboutin SA.

Claiming it won a “conclusive” victory, YSL said it is ready to “close the book” on what had become one of the most widely scrutinized legal cases in the fashion world.

Louboutin sued YSL in April 2011, claiming the fashion house infringed on the footwear brand’s trademark when it sold red pumps with red soles. Presiding New York federal court judge Victor Marrero disagreed with Louboutin, and allowed YSL to continue to sell the monochrome shoes. The judge went a step further by questioning the validity of Louboutin’s trademark.

With its mark in jeopardy, the French shoemaker appealed the decision, and in January, Louboutin lawyer Harley Lewin argued his client’s case before a packed courtroom, which included industry figures such as Council of Fashion Designers of America president Diane von Furstenberg, CFDA chief executive officer Steven Kolb and an apprehensive Christian Louboutin.

Nearly a year of deliberating ensued and came to a head last month when the Court of Appeals ruled that YSL had the right to make and sell the monochromatic shoes. In doing so, the court whittled down Louboutin’s trademark but did not cancel it.

“From our perspective, the Appeals Court decision was a complete victory for us,” said YSL lawyer David Bernstein. “We got the right to sell the shoes and the court even narrowed Louboutin’s trademark. It’s our hope that Louboutin will stop using the [trademark] registration in an anticompetitive way.”

While YSL dismissed its counterclaims that essentially called into question how Louboutin procured its trademark, Bernstein said his client still has a “very strong” case to cancel Louboutin’s registration should the brand attempt another lawsuit.

“There’s little reason for us to pursue the cancelation at this point,” he said. “We’ve already won and there’s no reason to be vindictive.”

But Louboutin’s Lewin shrugged off Bernstein’s aggressive words, calling the claims “counter threats” that are “not substantive” and difficult to prove.

Essentially, YSL would have to bring the matter to the United States Patent and Trademark Office and make the case that the patent office that granted Louboutin its mark had done so fraudulently. Not only would that be a lot of trouble but it would also further strain an already frayed relationship between two leading industry brands. Ending in a truce of sorts may also help heal the precarious personal relationship between Christian Louboutin and François-Henri Pinault, chairman and ceo of PPR, YSL’s parent company, according to sources familiar with the matter.

Now that YSL has a new direction under creative director Hedi Slimane, Lewin hopes that the house, which is now known as Saint Laurent, will steer clear of producing shoes that ruffle Louboutin’s feathers. While the lawyer noted that under common law his client still has a case against brands that produce all-red shoes, he too seemed content to call the legal battle a truce.

“Now that Pepsi and Coke have fought over the formula, I must say, in my 40-year career, I’ve never seen a case go more wide than this one,” Lewin remarked. “It had a celebrity, fashion and legal side to it but once the consumer got involved, that changed the face of the case. It was tried in the courtroom and the court of public opinion.”

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