Australian Leather loses Ugg brand battle
MELBOURNE, Australia – An Australian firm’s long-running attempt to remove an American trademark on the word “Ugg” has suffered another heavy blow after a U.S. appeals court dismissed its argument, in a loss that could have serious consequences for the Australian manufacturers of the sheepskin boots.
This is the latest stage in a high-stakes five-year legal battle between the brand’s owner in the United States, Deckers Outdoor, and a company called Australian Leather. They are arguing over ownership of the name of a shoe that has been ridiculed as old-fashioned and downright ugly, but has still found its way onto the feet of celebrities like Oprah Winfrey and Tom Brady.
Australian media have called the lawsuit a “David vs. Goliath” battle, and the case has touched a nerve with many Australians, who see the shoes as a national, albeit old-fashioned, symbol. The case also showed how global access to products on the Internet can create conflicts between local legal systems.
Australian Leather owner Eddie Oygur said after the court ruling on Friday that he would take the case to the United States Supreme Court.
“It’s not just about me; this is australia’s takeover of ‘ugg’, ”Oygur said. “The mark should never have been transferred to the United States in the first place”
In Australia the word is used as a catch-all term for fleece-lined sheepskin boots made since the 1930s. They were popularized by surfers in the 1960s. Anyone can sell Ugg boots in Australia, and many Australian companies have marks that include the word. It was registered as a trademark in the United States in the 1980s by Australian entrepreneur Brian Smith.
Deckers stated that she bought the name fairly from Mr. Smith, that she registered the trademark “UGG Australia” in the United States in 1995 and that American consumers knew it as a brand name rather than a brand name. a generic term. Deckers owns the brand in over 130 countries, which means Australians are largely barred from selling their boots internationally.
Deckers sued Australian Leather in 2016, alleging trademark infringement because Mr. Oygur had sold 13 pairs of Ugg boots in the United States through his website. Mr. Oygur did not deny the sales of the boots, but argued that Deckers should never have been able to file the term “ugg” in the first place.
“We should be able to sell our ugg boots around the world,” Mr. Oygur said. “It’s generic here, and it’s an Australian product.”
He also argued that uggs were once generic in the United States, with many entrepreneurs selling them across the country before they were filed, and that the term warranted protection in Australia similar to that of French ‘Champagne »And Greek« feta ».
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In 2019, the U.S. District Court for the Northern District of Illinois ruled in favor of Deckers, ruling that while ugg may be a generic term in Australia, it did not have such a meaning in the United States. . He also ruled that the term was not subject to the “foreign equivalents doctrine,” a legal guideline in the United States that states that foreign words for categories of articles cannot be trademarks, and that Mr. Oygur had willfully forged the Deckers mark. Mr. Oygur was ordered to pay $ 450,000.
Mr. Oygur challenged the decision in the United States Court of Appeals for the Federal Circuit. In court documents filed before the appeal, his lawyers argued that the U.S. District Court used the wrong standards to judge whether something was generic. In his own documents, Deckers countered that the judge used the correct test and cited investigative evidence that most American consumers recognize Ugg as a brand.
The court upheld the court’s initial ruling on Friday. He gave no reason.
Tom Garcia, the executive director of Deckers, said in a statement ahead of the verdict that the company believed the appeal was unfounded.
“Deckers welcomes fair competition,” he said. “However, this case was intended to prevent American consumers from being deceived into purchasing counterfeit products that were offered for sale and sold online in the United States.”
Dean Wilkie, Lecturer in Branding and Marketing at the University of Adelaide, said: “In the Australian market, an ordinary person on the street, if you go up to them and tell yourself it’s right that this American brand stops? people who use “ugg” on sheepskin boots, most of us would be outraged because it doesn’t feel right. It doesn’t sound moral.
On the flip side, he acknowledged, Deckers has spent years transforming Uggs into a sophisticated lifestyle brand – a far cry from the situation in Australia, where they are relegated to souvenir shop windows, and people use them for grocery shopping and wear them everywhere. the House.
“The Internet has given us access to a global market. We can distribute products all over the world. But legal systems are not global. They are inside countries, ”said Dr Wilkie.
At its peak, Australian Leather manufactured around 50,000 to 60,000 pairs of boots per year and had a few dozen staff. Last year, Deckers made $ 2 billion in revenue, three-quarters of which came from the Ugg brand, according to its Annual report 2020.
The stakes for both companies were high. Ahead of the verdict, Nicole Murdoch, an intellectual property lawyer at Eaglegate Lawyers in Brisbane, Australia, said legal success for Mr. Oygur would have a “catastrophic effect on Deckers”, costing the company the brand it is on. had built its brand. .
Mr Oygur said before the verdict: “All ugg boots manufacturers in Australia will turn to imports because of the price, and Australia will lose what has been Australian since the 1930s.”
Personally, he had put everything on the line: the business he had run for nearly 40 years and a house he had mortgaged to pay his legal fees. He said he spent more than $ 1 million on the case, lost the majority of his staff and saw the court challenge scare many of his clients.
“God help me, I won’t back down,” he said. “They didn’t give me a choice. Absolutely no choice.