UPDATE: Deckers Returns to Court in Latest Round of Trademark Battles for Its Billion-Dollar Plus ‘UGG’ Brand
Ugg boots go to court. In the final round of a binational trademark battle that has been dubbed a David vs. Goliath battle, US shoe giant UGG and Sydney-based shoe company Australian Leather are taken to court. US appeal to the Federal Tour just over five years after UGG owner Deckers Outdoor Corporation sued Australian Leather in March 2016, alleging that the independent firm’s sale of boots ” virtually identical ”using the name“ ugg ”in the United States infringed its valuable trademark rights, as well as its design patents for various design elements of the boots. Against this backdrop, Deckers asked a US federal court to force its much smaller rival to limit sales of its Australian-made boots to Australia and New Zealand so as not to interfere with the sales of its boots. and its protected brand name.
The appeal follows a September 2018 order from the U.S. District Court for the Northern District of Illinois, which dismissed Australian Leather’s argument that “ugg” is a generic term – in Australia and the United States. United – for some sort of sheepskin boot originated with the 1960s surfing community in Australia, and granted Deckers’ motion for summary judgment. During the proceedings, the court dismissed Australian Leather’s counterclaims, including its false appellation of origin argument, in which it alleged that Deckers was misleading consumers by marketing its boots as a product. Australian when UGG moved its manufacturing out of Australia and to other places, such as China, after being acquired by Deckers.
Siding with Deckers, the court ruled that promoting UGG’s Australian heritage does not constitute a false appellation of origin, especially in light of Deckers displaying country of origin labeling. on all of its products and website.
The court also ruled in favor of Deckers in Australian Leather’s request to have its “UGG” trademark registrations canceled and / or to prohibit the company from applying those trademarks on the grounds that “ugg” is simply a generic term and therefore, not an indicator of a single source (i.e. a brand). Relying on consumer surveys commissioned by Deckers, which found that up to 98% of survey participants viewed UGG as a brand name, among other factors, the court ruled that “no reasonable investigator could conclude that ugg is or never has been a generic word. for sheepskin boots in the United States ”
While “the evidence for how Australians used the word ugg may be relevant to consumer perceptions in the United States,” the court determined that the foreign equivalents doctrine – that a party is prevented from obtaining a mark on a foreign generic word if it does so. therefore “would prevent competitors from designating a product as what it is in the foreign language their customers know best” – does not apply, as “generic use in Australia alone is not sufficient for infer a generic meaning in the United States ”.
Fast forward to May 2019, and following a four-day trial, a jury found that Australian Leather had both willfully infringed Deckers’ trademarks and used a counterfeit version of its “UGG In particular, resulting in $ 450,000 in damages. price for Deckers. Several months later, in a February 2020 judgment, the court approved the amount of damages and issued a permanent injunction, prohibiting Australian Leather “from using … the UGG trademark or designation, or any reproduction, infringement, copy or colorable imitation thereof, in any manner and in any format, case or spelling, on or in connection with the sale, offer for sale sale, distribution or advertising of any product in the United States or its territories, ”among others.
In pushing to appeal in a case this summer, Australian Leather – which maintains it did not do any business in the United States until it received 33 internet orders for 42 products between 2014 and 2016 – has argues that the lower court erred in its test to determine if ‘ugg’ is generic and, therefore, UGG – which generates over $ 1.5 billion in revenue each year as part of its collection of boots – should not be allowed to maintain a global monopoly over time. At the same time, urging the federal court to overturn the district court’s decision, the shoe company and its owner Eddie Oygur claim that since both parties agree that “ugg” is generic in Australia, under the doctrine of equivalents foreigners, the generic term in the United States, thus, thus, failure to apply the doctrine would harm foreign trade.
On the question of genericness in the United States, Deckers “responds that the district court applied the correct test,” said Kaitlyn Pehrson of Finnegan recently. in a note. The shoe giant – which also owns Teva and Hoka One One, among other brands – argues that the United States Court of Appeals for the Seventh Circuit “ruled that the same test applies if the brand allegedly” was originally generic or has become so through use ”, and cites the recent Supreme Court ruling in Booking.com BV, which rejected the same argument” and determined that the domain name Booking.com no was not a generic term. “Regarding the doctrine of foreign equivalents, Deckers argues that the doctrine does not apply where, as here, there is no translation for the term. In the alternative, Deckers submits that, even if the doctrine applies, the district court correctly focused its analysis on American, not Australian, shoe consumers.
On demand for the UGG brand, Deckers, headquartered in Goleta, Calif., Reported “record” third quarter results in February, “driven by demand across the offering. diverse UGG brand products ”, such as the introduction – and truly radical marketing – of its sandal and a number of collaborations with Telfar, White Mountainerring and Molly Goddard, among others. (The group also highlighted “the continued global expansion of the HOKA ONE ONE brand.”) Speaking specifically to UGG, Deckers revealed that UGG’s net sales for the three-month period increased by 12.2 % to reach $ 876.8 million, compared to $ 781.1 million for the same period last year. year.
In a statement ahead of their day in court on Wednesday, the Australian Leather lawyer told TFL that “unlike many other UGG boot manufacturers, who have been sued by Deckers around the world, Mr. Oygur and Australian Leather fired back, obtaining a deposition and evidence from experts around the world that the term “UGG” is a particular style of sheepskin boot … [that] became an umbrella term in the United States in the late 1960s, when Australian UGG boots were exported there. Mr Oygur, who is named accused in the case, “remains defiant”, according to his lawyer, saying: “I am doing this not only for myself, but for every UGG boot maker in Australia. The word UGG is Australian. It should belong to Australia UGG is Australian in the same way champagne is French and feta is Greek.
UPDATE (May 5, 2021): In court on Wednesday, the appeals court focused on the foreign equivalents doctrine, acknowledging that this case will in all likelihood serve as a test case to determine whether a generic term in another English-speaking country would be blocked from recording at United States. In addition, counsel for Deckers argued that “ugg” was not “in the lexicon in the United States” when the UGG mark was launched and therefore could be used as a trademark, that it either generic or not in Australia. Meanwhile, as reported by Bloomberg, the apparently skeptical panel of judges “asked why [Australian Leather’s] argument was not defeated by a binding precedent deeming critical American perceptions in [the Miller Brewing Co. v. Heileman Brewing] case involving an “LA” mark which in Australia generically reported low alcohol content, ” and at the same time, “also rejected Deckers on why the doctrine of foreign equivalents would not apply to English-speaking countries as well.”
UPDATE (May 7, 2021): The Federal Circuit sided with Deckers and upheld the lower court decision promptly without specifying its determination.
The case is Deckers Outdoor Corp., v. Australian Leather Pty. Ltd., et al. 1: 16-cv-03676 (ND Ill.)