MELBOURNE, Australia – A long-term offer by an Australian company to scrap a US brand bearing the word “Ugg” has suffered another blow after an American appeals court dismissed its case in Sheepskin Boots.
This is the final step in a five-year legal battle between US trademark owner Deckers Outdoor Corporation and a company called Australian Leather. They argued over ownership of the name of a shoe that has been derided as unfashionable and downright ugly, but which has still found its way onto the feet of celebrities like Oprah Winfrey and Tom Brady.
The Australian news media called the lawsuit a battle between David and Goliath, and the case hit many Australians who consider footwear a national, if out-of-fashion, symbol. The case also showed how global access to products on the Internet can lead to conflicts between local legal systems.
Australian Leather owner Eddie Oygur said following the court ruling on Friday that he would take the case to the US Supreme Court.
“This is not just about me; It’s about Australia taking ugg back, ”said Oygur. “The brand should never have been given to the US in the first place.”
In Australia, the word is used as a collective term for sheepskin boots that have been lined with fleece since the 1930s. They were popularized by surfers in the 1960s. The term is not registered as a trademark there and anyone can sell Ugg boots. It was registered as a trademark in the United States in the 1980s by Australian entrepreneur Brian Smith.
Deckers said it bought the name fairly from Mr. Smith, that it was branded “UGG Australia” in the US in 1995, and that American consumers knew it as a brand name rather than a generic term. Deckers holds the trademark in more than 130 countries, which means that Australians are largely prevented from selling their boots internationally.
Deckers sued Australian Leather in 2016, alleging trademark infringement for selling 13 pairs of Ugg boots in the United States through its website. Mr. Oygur did not deny the sale of boots, but argued that Deckers should not have used the term “ugg” at all.
Recognition…Deckers outdoors via PR Newswire
“We should be able to sell our Ugg boots worldwide,” said Oygur. “It’s generic here and it’s an Australian product.”
He also argued that Uggs were generic in the US, being sold by numerous entrepreneurs across the country before being registered as trademarks, and that the term warranted similar protection in Australia to 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 that, while ugg was an umbrella term in Australia, it had no such meaning in the U.S. It was also determined that the term was not subject to the “Foreign Equivalents Doctrine,” a legal guideline in the United States that foreign words for categories of items cannot be trademarked and that Mr. Oygur willfully violated the trademark of Deckers has violated. Mr. Oygur was fined $ 450,000.
Mr. Oygur appealed the decision in the United States Court of Appeals for the Federal Circuit. In court documents filed prior to the appeal, his attorneys 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, citing survey results that most US consumers recognize Ugg as a brand.
On Friday, the court upheld the court’s original decision. There were no reasons.
Tom Garcia, Deckers’ chief administrative officer, said in a statement prior to the verdict that the company believes the appeal has no merit.
“Deckers welcomes fair competition,” he said. “This case, however, was about protecting American consumers from being deceived into buying counterfeit products that were on sale and sold online in the US.”
Dean Wilkie, Lecturer in Branding and Marketing at the University of Adelaide, said, “In the Australian market there is a normal person on the street if you go up to them and say you think it’s right for this American brand to stop folks, who use ‘ugg’ for sheepskin boots, most of us would be outraged because it doesn’t feel right. It doesn’t feel moral. “
On the other hand, he admitted, Decker’s years spent building 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 stores and they carry around the house.
“The internet has given us access to a global market. We can distribute products all over the world. But the legal systems are not global. They are in countries, ”said Dr. Wilkie.
In its heyday, Australian Leather produced around 50,000 to 60,000 pairs of boots a year and had a few dozen employees. Last year, Deckers had sales of $ 2 billion, three quarters of which came from the Ugg brand, according to the 2020 annual report.
The stakes for both companies were high. Prior to the ruling, Nicole Murdoch, an intellectual property attorney with Eaglegate Lawyers in Brisbane, Australia, said that legal success for Mr. Oygur would have “a disastrous effect for Deckers” that would cost the company the trademark on which it was branded had built up.
Mr Oygur said before the verdict, “All ugg boot manufacturers in Australia will turn to imports because of prices and Australia will lose what has been Australian since the 1930s.”
Personally, he’d gotten to the heart of the matter: the business he’d run for nearly 40 years and a house he’d mortgaged to pay for his legal fees. He said he spent over a million dollars on the case, lost the majority of his employees, and saw the legal challenge put off many of his clients.
“God help me, I won’t back down,” he said. “You didn’t give me a choice. Absolutely no choice. “