A direct quote for the WSJ 01/25/12 by Ashby Jones reads: "When it comes to corporate colors, Brown belongs to the United Parcel Service Inc., Owens Corning protects its own shade of pink and Tiffany and Co has domain over robin's egg blue." So my thought is why then is this any different for Louboutin and their red soles.
The mere argument that artists need a full palette of colors leaves me stumped. No one said YSL can't use red, everyone is free to use red, just not on the soles of their shoes. If YSL were to emerge victorious in this case, then other design houses or established businesses such as the aforementioned with signature features, colors included should be concerned about the precedence which would be set.
Louboutin has undoubtedly created something of envy. See the pic above and realize the lengths people would go for red soled shoes.