UGG, is it finally over? | Dorsey & Whitney LLP
A long-standing battle between Deckers Outdoor Corp., boot makers UGG and Australian Leather PTY Ltd. could finally be completed after a May 7 ruling by the United States Court of Appeals for the Federal Circuit. The battle began in 2016 in the Northern District of Illinois when Deckers sued Australian Leather for trademark infringement on the basis of its sale of boots in the United States bearing Deckers ‘UGG mark that looked quite similar to Deckers’ UGG boots. .
Australian Leather manufactures sheepskin boots in Australia that contain “ugg” in the name, which in Australia is a generic term for sheepskin. In the United States, however, Deckers owns the UGG brand in connection with its popular sheepskin boots. When Australian Leather started selling its UGG boots in the United States – and it only sold Twelve pairs – Deckers sued, seeking both an injunction and damages. In response, Australian Leather filed several counterclaims and claimed that ugg did not deserve trademark protection in the United States because it was generic.
The parties argued over the generic issue (as well as others) in cross-summary judgment motions filed in 2018. Australian Leather argued that ugg was a generic term in Australia and should be treated as a term in the United States. , relying largely on the doctrine of “foreign equivalents” to support its argument. Under the doctrine of foreign equivalents, “one cannot obtain a trademark on a foreign generic word if the trademark designation” prevented competitors from designating a product as it is in the foreign language that their customers know. better. “” Deckers Outdoor Corp. v. Australian Leather Pty. Ltd., 340 F. Supp. 3d 706, 709 (ND Ill. 2018) (citing Otokoyama Co. Ltd. v Wine of Japan Import, Inc., 175 F.3d 266, 271 (2d Cir. 1999)).
In his summary judgment notice, the district court dismissed Australian Leather’s generic defense, including its application of the foreign equivalents doctrine. Based on expert testimony and Deckers investigative results, the court concluded that ugg was not generic in the United States, even though it was in Australia. In particular, based on the fact that 98% of consumers surveyed in Deckers’ survey believed ugg to be a trademark, the court concluded that “no reasonable factfinder could conclude that ugg was or ever was a generic word for sheepskin boots in the United States ”. the court also refused to apply the doctrine of foreign equivalents, considering that it was inappropriate when, as here, it is a translation from “English to English”. In its summary judgment notice, the court also dismissed several other defenses presented by Australian Leather and set the parties on trial.
After a four-day jury trial, the jury found Australian Leather willfully infringed Deckers’ UGG trademark on the basis of its sale in the United States of similar boots containing the ugg name and awarded Deckers $ 450,000 in damages. After receiving the verdict and a bench trial on separate issues, Australian Leather appealed to the Federal Circuit. Two of the three issues raised in Australian Leather’s appeal concerned questions of a generic nature, including the application of the doctrine of foreign equivalents: “[w]whether the district court erred in ruling that the foreign equivalent trademark doctrine did not apply to generic words in a foreign country where the primary language is English. “
The Federal Circuit heard oral argument on Australian Leather’s appeal on May 5, 2021 and dismissed it in a not much time two days later, May 7, 2021, without providing any reasoning. Although we are not sure if Australian Leather will drop a cert petition with the Supreme Court, we will monitor and let you know if and when this is the case. For now, at least, the battle seems to be over.