Ugg-ly dispute over US Ugg trade mark ends

A US jury has found that a small Australian company has infringed a US company’s ‘UGG’ trade mark, highlighting that generic Australian names can be registered and protected as trade marks in other countries.

Aussie company booted from US market

In 2016, Deckers Outdoor Corporation (Deckers) initiated legal proceedings against Australian ugg manufacturer Australian Leather. Deckers claimed the Aussie company infringed both the ‘UGG’ trade mark and design patents of its boots by selling 12 pairs of ugg boots online to customers in the US using the descriptor “ugg”.

Deckers owns the registered trade mark ‘UGG’ in over 130 countries including the US, preventing Australian companies from using the word when selling ugg boot products overseas. Deckers bought the American registered name from Australian entrepreneur Brian Smith, who registered the word “ugg” in the US in the 1980s.

The jury awarded USD$450,000 in damages, finding Australian Leather infringed Deckers’ trade mark. The judge is yet to determine two other issues in the case: whether Australian Leather wilfully infringed Deckers’ design patents and whether Deckers’ trade mark for ‘UGG’ is unenforceable.

What’s in a (generic) name?

The key issue in this case was whether “ugg” was considered a generic name in the US. A generic name is any common word used to describe a type of product or service. Generic terms generally cannot be registered as a trade mark in the US or Australia and can be used by anyone.

In Australia, the word “ugg” is considered a generic term for sheepskin boots and cannot be registered on its own as a trade mark. To be registered in Australia, the word “ugg” must be in a logo or in combination with other words. However, other countries such as the US do not recognise “ugg” as a generic word because the public knows “ugg” as a brand, not a descriptor.

Australians have lobbied for the beloved Australian product to be recognised worldwide for its origin. Key political supporter former South Australian senator Nick Xenophon stated, “This is a battle worth having. If the French can protect the use of the word Champagne, the Greeks the use of the word feta, then surely Australia can protect the use of the word ugg for Australian manufacturers.”

Key takeaways for Australian businesses

Australian manufacturers and retailers of ugg boots should avoid using the word “ugg” when selling, advertising or exporting sheepskin footwear in the US. If not, Australian businesses open themselves up to costly litigation.

Importantly, the term “ugg” can still be used in Australia to describe or name the footwear as it is considered a generic term in Australia. However, manufacturers and retailers should be careful when using the term in other countries. This can include operating an Australian website which receives orders from customers based overseas.

The implications of this case for Australian businesses go further than the “ugg” trade mark. It serves as a timely reminder that businesses intending to sell products overseas should conduct thorough trade mark searches to ensure they will not infringe international trade marks. Businesses should also ensure they do not infringe other intellectual property rights in the countries they wish to operate, including patents, designs and copyright.

Australian Leather has stated that it intends to appeal the decision. If the decision is reversed, this will allow other Australian ugg boot manufacturers and retailers to expand their businesses overseas without becoming targets for litigation.

If you have a brand which you wish to use overseas, our IP team can conduct clearance searches to ensure your name or product does not infringe international intellectual property rights. Apart from securing your valuable brands in Australia, we can also help you extend protection to the key overseas markets you trade or intend to trade in.  If you have any questions regarding the Ugg decision and how this impacts your business, please contact Belinda Sigismundi of our Intellectual Property team.

This article was written by Belinda Sigismundi, Principal Lawyer – Commercial and Emma Berry, Lawyer – Commercial.