UPDATE: Deckers is back in court in latest round of trademark battles over its billion-dollar plus brand ‘UGG’
Ugg boots go to court. In the final round of a binational brand fight that has been dubbed a David-type battle against Goliath, US shoe giant UGG and Sydney-based shoe company Australian Leather head to Court. US call for federal circuit. more than five years after UGG owner Deckers Outdoor Corporation filed a lawsuit against Australian Leather in March 2016 alleging that the sale by an unrelated company of “virtually identical” boots using the name “ugg” to the States -Unis was violating its valuable trademark rights. like 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 shoes. name protected by a trademark.
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 allowed Deckers’ motion for summary judgment. During the proceedings, the court dismissed Australian Leather’s counterclaims, including its bogus designation of origin argument, in which it alleged that Deckers was misleading consumers by marketing its boots as an Australian product. when UGG moved its manufacturing out of Australia and to other places, such as China, after being acquired by Deckers.
On Deckers’ side, the court ruled that promoting UGG’s Australian heritage does not result in a false appellation of origin, especially given that Deckers displays country of origin labeling on all its products and website.
The court also ruled in favor of Deckers in connection with Australian Leather’s quest to have its “UGG” trademark revoked registrations and / or to prevent the company from enforcing those marks 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 found that “no reasonable investigator could not conclude that ugg was or ever was a generic word. for sheepskin boots in the United States’
While “the evidence of 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 barred from obtaining a mark on a foreign generic word if it does so “would prevent competitors from designating a product as what it is in the foreign language their customers know best” – does not apply, because “generic use in Australia alone is not sufficient to infer generic meaning in the United States. “
Fast forward to May 2019, and after a four-day trial, a jury found that Australian Leather both intentionally infringed Deckers’ trademarks and used a counterfeit version of its “UGG” trademark , in particular, thus resulting in damages of $ 450,000. 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, distribution or advertising of any product in the United States or its territories, among others.
In requesting an appeal in a depot this summer, Australian Leather – which claims it did not do any business in the United States until it received 33 internet orders for 42 products between 2014 and 2016 – did argue that the lower court erred in its test to determine whether “ugg” is generic, and therefore, UGG – which brings in 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, according to the doctrine of foreign equivalents , the generic term in the United States, 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,” Kaitlyn Pehrson of Finnegan recently said. 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, as the brand allegedly ‘was originally generic or has become’ 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 does not was not a generic term. “With respect to the doctrine of foreign equivalents, Deckers argues that the doctrine does not apply where, as here, there is no translation for the term. Alternatively, Deckers argues 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, California-headquartered Deckers posted “record” third quarter results in February, “driven by demand across the diverse product offering. of the UGG brand ”, such as the introduction – and truly radical marketing – of his Fluff 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 $ 876.8 million, compared to $ 781.1 million for the same period previous year.
In a statement ahead of their day in court on Wednesday, the Australian Leather lawyer told TFL that “unlike many other UGG shoe makers, who have been sued by Deckers around the world, Mr. Oygur and Australian Leather retaliated, obtaining a statement. and testimonials from experts around the world that the term “UGG” is a particular style of sheepskin boot … [that] became a generic term in the United States in the late 1960s, when Australian UGG boots were exported there. Mr Oygur, who is cited as a defendant in the case, “remains provocative,” according to his lawyer, saying: “I do this not just 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 that 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 likely serve as a test to determine whether a generic term in another English-speaking country would be blocked from registration in the United States. other things, Deckers’ lawyer argued that “ugg” was not “in the lexicon in the United States” when the UGG brand was launched, and therefore could act as a brand, that ‘it is generic or not in Australia. Meanwhile, as reported by Bloomberg, the apparently skeptical jury “asked why [Australian Leather’s] the argument has not been overturned by a binding precedent judging American perceptions critical [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 the reasons why the doctrine of foreign equivalents would not apply also to English-speaking countries”.
UPDATE (May 7, 2021): The Federal Circuit sided with Deckers and upheld the lower court decision promptly without giving more details on his determination.
The case is Deckers Outdoor Corp., v. Australian Leather Pty. Ltd., et al. 1: 16-cv-03676 (ND Ill.)