Ugg boots trademark dispute: Difference between revisions

'''Ugg boots trademark disputes''' are the disputes between some footwear manufacturers, as to whether "ugg" is a protected trademark, or a generic term and thus ineligible for [[trademark]] protection. In Australia and New Zealand, where "Ugg" is a generic term for the style of footwear;,<ref name="IPAus">Trade Marks Hearings 16 January 2006. Decision of a delegate of the registrar of trade marks with reasons. Pg 10</ref><ref name="UggHowAMinnow">{{Cite news|url=httphttps://www.independent.co.uk/news/world/australasia/ugg-how-a-minnow-put-the-boot-into-a-fashion-giant-5234446111358.html |title=Ugg: How a minnow put the boot into a fashion giant|date=18 January 2006|work=[[The Independent]] |date=18 January 2006 |author=Marks, Kathy |accessdateaccess-date=2623 AugustMay 20102016}}</ref> 81702 registered trademarks include the term "Ugg" in various logos and designs.<ref name="IPA">{{cite web | last = | first = | date = | title = Search for a trade mark (81 registered and 74 pending) | work = [[IP Australia]]| url = http://www.ipaustralia.gov.au/get-the-right-ip/trade-marks/search-for-a-trade-mark/ | accessdateaccess-date = 16 September 2013 }}</ref><ref name="Hynes" >[httphttps://web.archive.org/web/20110419023322/http://www.hyneslawyers.com.au/articles/the-battle-of-the-ugg-boot-continues.html The battle of the UGG BOOT continues] Hynes Lawyers February 11, 2011</ref> By contrast, [[UGG Australia(brand)|UGG]] is a registered trademark of the [[California]]-based company [[Deckers Outdoor Corporation]], in over 130 countries worldwide, including the U.S., the European Union, and China.<ref name="UggHowAMinnow" /><ref name="Turkish">[http://www.walkermorris.co.uk/business-insights/bootiful-ugg-recognised-well-known-mark-turkey Website of Walker Morris UK solicitors firm, Leeds.] {{Webarchive|url=https://web.archive.org/web/20140107122127/http://www.walkermorris.co.uk/business-insights/bootiful-ugg-recognised-well-known-mark-turkey|date=2014-01-07}} "Bootiful - UGG recognised as a well known mark in Turkey" Legal Briefing from the Trade Marks and Designs Group, 3 October 2011.</ref>

[[Ugg boots]] (sometimes called ''uggs'')<ref name="IPAustralia2006-01-16">{{Cite web | last = Thompson | first = Ian | date = 16 January 2006 | title = Decision of a Delegate of the Registrar of Trade Marks with Reasons | publisher = [[IP Australia]] | url = http://www.ipaustralia.gov.au/pdfs/trademarks/hearings/245662_060116.pdf | accessdateaccess-date = 17 November 2009 | url-status = dead | archive-url = https://web.archive.org/web/20080729001425/http://www.ipaustralia.gov.au/pdfs/trademarks/hearings/245662_060116.pdf | archive-date = 29 July 2008 }}</ref> are known in [[Australia]] and [[New Zealand]] asare a unisex style of [[sheepskin boots|sheepskin boot]]. In themany Unitedother Statescountries, Europe and around the worldhowever, [[UGG Australia(brand)|UGG]] boots are a well-known brand<ref name="Turkish">[http://www.walkermorris.co.uk/business-insights/bootiful-ugg-recognised-well-known-mark-turkey Website of Walker Morris UK solicitors firm, Leeds.] "Bootiful - UGG recognised as a well known mark in Turkey" Legal Briefing from the Trade Marks and Designs Group, 3 October 2011.</ref> of footwear owned by Deckers.<ref name="Bloomberg">{{cite webnews|title=UGGs in Play With Deckers Seen Luring Buyers: Real M&A |url=httphttps://www.bloomberg.com/news/2012-11-25/uggs-in-play-with-deckers-seen-luring-buyers-real-m-a.html |first=Brooke |last=Sutherland & Tara Lachapelle |publishernewspaper=Bloomberg.com |accessdatedate=26 November 2012 |access-date=February 23, 2013}}</ref> The boots are made of twin-faced [[sheepskin]] with fleece on the inside and with a tanned outer surface, often with a synthetic sole. The boots originated in Australia and New Zealand, initially as utilitarian footwear worn for warmth and comfort. UGG boots emerged as a fashion trend in the United States in the late 1990s and as a world-wide trend in the late 2000s.<ref name="Bloomberg" />

[[File:Uggs2.jpg|A pair of [[UGG Australia(brand)|UGG]] boots from the [[United States]] where the name is trademarked.|thumb|right|250px]]

[[File:SuperUgg.JPG|right|250px|thumb|A pair of Ugg boots made in [[Australia]] where the name is generic.]]

The [[Lanham Act]] is the primary statute governing federal trademark statute of law in the United States;<ref name="Rest"/> however, as it only applies to "commerce which may lawfully be regulated by Congress,",<ref>Quoting Lanham Act, 15 v.s.c. § 1114 (2000)</ref> it does not address terms that are used in foreign countries.<ref group="notes">{{cite journal | last = Witherell | first = Brendan | year = 2006 | title = [http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?article=1071&context=lawreview Trademark Law—The Extraterritorial Application Of The Lanham Act:] | journal = [[Western New England University School of Law|Western New England Law Review]] | volume = 29 | issue = 1 | pages = 204–208 | url=http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?article=1071&context=lawreview}}<br />For a court to assert extraterritorial jurisdiction for the Lanham Act, (1) the conduct of the defendant must have a "substantial" effect on U.S. commerce; (2) the defendant must be a U.S. citizen; and (3) there can be no conflict with foreign law. Failing to satisfy one of the factors "might well be determinative,", and "the absence of [two] is certainly fatal.". &mdash; Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956).</ref> The [[Doctrinedoctrine of foreign equivalents]] guideline serves this purpose.<ref name="Rest">{{cite journal | last = Rest | first = Elizabeth J.| year = 2006 | title = [http://home.comcast.net/%7Ejlw28129/Foreign_Equivalents.pdf Lost in Translation: A Critical Examination of Conflicting Decisions Applying the Doctrine of Foreign Equivalents] | journal = [[International Trademark Association|Trademark Reporter]] | volume = 96 | issue = 6 | pages = 1211–1212 | url=http://home.comcast.net/%7Ejlw28129/Foreign_Equivalents.pdf}}</ref>

Under the doctrine of "foreign equivalents,", a foreign language term used in a foreign country, that is considered generic in that country, cannot be imported into the United States and used as a trademark. In applying the Doctrinedoctrine, the courts consistently refer to two policy rationales.<ref name="Chaudhri">Sujata Chaudhri [http://www.cll.com/clientuploads/pdfs/Chaudhri_article_JanFeb2007.pdf Trademark Doctrine of Foreign Equivalents] Cowan, Liebowitz & Latman pg 1</ref> The first rationale, "the doctrine serves the interests of domestic competition":<ref name="Chaudhri"/><blockquote>"Because of the diversity of the population of the United States, coupled with temporary visitors, all of whom are part of the United States marketplace, commerce in the United States utilizes innumerable foreign languages. No merchant may obtain the exclusive right over a trademark registration if that exclusivity would prevent competitors from designating a product as what it is in the language their customers know best." &mdash; Otokoyama Co. Ltd. Vs Wine of Japan Import Inc..<ref name="Chaudhri"/><ref>[https://bulk.resource.org/courts.gov/c/F3/175/175.F3d.266.html Otokoyama Co. Ltd. Vs Wine of Japan Import Inc. 175 F. 3D. 266,271 (2nd Circuit 1999)]</ref></blockquote>The second rationale, "the doctrine serves the interests of international [[comity]]":<ref name="Chaudhri"/><blockquote>"Because United States companies would be hamstrung in international trade if foreign countries granted trademark protection to generic English words, the United States reciprocates and refuses trademark protection to generic foreign words." &mdash; Enrique Bernat F., S.A. v. Guadalajara, Inc..<ref name="Chaudhri"/><ref>[https://bulk.resource.org/courts.gov/c/F3/210/210.F3d.439.99-50854.html Enrique Bernat F., S.A. v. Guadalajara, Inc., 210 F.3d 439 (5th Cir. 2000)]</ref></blockquote>However, the [[Trademark Manual of Examining Procedure]] ("TMEP") states that the test for applying the doctrine of foreign equivalents is "whether, to those American buyers familiar with the foreign language, the word would denote its English equivalent".<ref group="notes">[http://www.uspto.gov/trademarks/resources/exam/examguide1_08.jsp Guidance on when to apply the doctrine of foreign equivalents. Examination Guide 1-08] [[United States Patent and Trademark Office]] April 23, 2008<br />The [[Trademark Trial and Appeal Board]] has, for the purposes of the guide, ruled that an "ordinary American purchaser" refers to the "significant portion of consumers" who speak both English and the relevant foreign language. In the case ''In re Joint Stock Co. "Baik ," 80 USPQ2d 1305, 1310,'' 0.22% was accepted as a significant portion of consumers in the United States.</ref><ref name="Chaudhri"/><ref>TMEP 1207.01(b)(vi)</ref><ref name="Chaudhri"/> Thus the doctrine is generally interpreted by courts as not applying if the generic word is not a word from a foreign language, but one from an English-speaking foreign country.<ref group="notes">For foreign countries in which English is the primary language, the U.S. Court of Appeals ruled that the generic status of an English-language term in that country was "irrelevant to the question [of] whether it should be accorded the same status in America" and carried no weight. Similarly, a California court has held that the "genericness" of an English-language term in an English-speaking foreign country "was not determinative of the alleged genericness of that term in the United States." &mdash; Rest Elizabeth J. (2006), Lost in Translation: pg. 1244 + 1246</ref><ref group="notes">[http://www.bitlaw.com/source/tmep/1207_01.html Trademark Manual of Examining Procedure § 1207.01: 1207.01(b)(vi) Doctrine of Foreign Equivalents]<br />"The doctrine should be applied '''only''' when it is likely that the ordinary American purchaser would stop and translate the foreign word into its English equivalent."</ref><ref name="Koolaburra"/>

Court cases have noted that the generic status accorded to English-language words in foreign countries has no bearing on the registration of marks in the United States. The genericity argument was invoked for Ugg boots and was rejected by a U.S. district court which cited the following cases in support.<ref name="Koolaburra"/> In ''Anheuser-Busch, Inc. v. Stroh Brewery Co.'', the court rejected as irrelevant the generic usage of the phrase "L.A. beer" in Australia for [[Lowlow-alcohol beer]].<ref name="Koolaburra"/><ref name="Anheuser">''[https://bulk.resource.org/courts.gov/c/F2/750/750.F2d.631.84-1714.html ''Anheuser-Busch, Inc. v. Stroh Brewery Co.'', 750 F.2d 631, 641-42 (8th Cir. 1984).]</ref><ref name="Koolaburra"/> The court ruled that "a term may be generic in one country and suggestive in another"<ref name="Stroh"/> and that genericity in Australia was irrelevant.<ref>Anheuser-Busch, Inc. v. Stroh Brewery Co. B92</ref> In ''Carcione v. The Greengrocer, Inc.'', the court rejected as irrelevant the generic use of the term "[[Greengrocer]]" in most English speaking countries for a retailer of fruit. The court rejected the argument on the grounds that it is irrelevant how a term is used outside the United States:<ref name="Stroh">''Anheuser-Busch, Inc. v. Stroh Brewery Co. C42''</ref> "The parties agree that the term is generic in Britain. Since we deal here with American trademark law, and thus American consumers, neither British usage nor the dictionary definition indicating such usage are determinative."<ref name="Koolaburra"/><ref>''Carcione v. The Greengrocer, Inc.'', 205 U.S.P.Q. (BNA) 1075 (E.D. Cal. 1979).</ref><ref name="Koolaburra"/> In another case, the court stated that while a term may be generic in another country, if "it is not so recognized in this country [the U.S.]... the mark must still be regarded as arbitrary and fanciful in the United States." and thus remains eligible for registration as a trademark in the United States.<ref>''Seiko Sporting Goods USA, Inc. v. Kabushiki Kaisha Hattori Tokeiten'', 545 F. Supp. 221, 226 (S.D.N.Y. 1982)</ref>

As the doctrine is a guideline rather than a rule, it has been criticized with commentators noting that United States courts are often contradictory and inconsistent in their application of the doctrine, and that it provides little guidance to owners when choosing their marks or to courts when assessing protectability or likelihood of mark confusion.<ref name="Rest"/> It has been suggested by the [[International Trademark Association]] that the doctrine be abolished and replaced with one that applies equally to all foreign words, regardless of whether they are from a foreign language or an English language, and that they take into account that country’scountry's trademark laws. Under the proposed changes, "Terms that are generic are never protectible as trademarks and are never registerable".<ref>Rest Elizabeth J. (2006), Lost in Translation: pg. 1221</ref><ref>Serge Krimnus, [httphttps://papers.ssrn.com/sol3/papers.cfm?abstract_idabstract=1734567 The Doctrine of Foreign Equivalents at Death's Door], 12 N.C. J.L. & Tech. 159 (2010)</ref>

The manufacture of ugg boots in Australia was primarily a [[Putting-out system#Cottage industry|cottage industry]]. Individually lacking the resources to fight Deckers, 20 Australian manufacturers formed the Australian Sheepskin Association to fight the corporation's claim, arguing that "ugg" is a generic term referring to flat-heeled, pull-on sheepskin boots.<ref> Arnold, James [http://news.bbc.co.uk/2/hi/business/3495511.stm Aussie boot battle takes an Uggly turn] [[BBC News]] February 19, 2004</ref><ref name="AIM">[http://www.aim.com.au/DisplayStory.asp?ID=542 Taking On The Big Guys Is Never an Easy Task] [[Australian Institute of Management]] April 2005</ref> They further argued that Australian manufacturers had been making and trading this style of boot for decades, including exporting them to the US. One of these manufacturers, [[Perth, Western Australia|Perth's]] [[Uggs-N-Rugs]], who had been manufacturing uggs since 1978 and selling them online since 1996, appealed to Australian trademark regulators, [[IP Australia]].<ref name="UggHowAMinnow" /> The officer who heard the case stated that the "evidence overwhelmingly supports the proposition that the terms (ugg, ugh and ug boots) are interchangeably used to describe a specific style of sheepskin boot and are the first and most natural way in which to describe these goods." In 2006 Uggs-N-Rugs won the right to use the term UGG BOOT/S and variations such as UGH BOOT/S.<ref name="UggHowAMinnow" /> The case was the subject of a 2006 television [[documentary film|documentary]], ''The Good, The Bad and The Ugg Boot.''.<ref name="GoodBadAndUggBoot">{{Cite episode |title=The Good, The Bad, and The Ugg boot |url=http://www.abc.net.au/tv/guide/netw/200609/programs/ZY7714A001D14092006T203000.htm |credits=Produced and directed by Susan Lambert, Jumping Dog Productions |network=Australian Broadcasting Corporation |airdate=14 September 2006}}</ref> Counsel for Uggs-N-Rugs was David Stewart<ref>{{Cite web|title=of Bennett + Co|url=https://bennettandco.com.au/our-people/david-stewart/|access-date=June 8, 2020|website=Bennett + Co}}</ref> instructed by Wrays: Counsel for Deckers was Christian Dimitriadis<ref>{{Cite web|title=of Nigel Bowen Chambers|url=http://www.nigelbowen.com.au/?barrister=Christian+Dimitriadis+SC|access-date=June 8, 2020|website=Nigel Bowen Chambers}}</ref> instructed by [[Ashurst LLP|Ashurst]].

Deckers retained the rights to their UGG logo as trade mark protection only applies for the way the mark appears in its entirety and not for the words it contains. The name Ugg/UGG was determined to be generic after the Registrar of Trade Marks found that registration did not confer "rights in the generic term, or terms, from which it is derived" and that the identity of the various trade marks "derive from the hyphenated nature of the expression." Therefore, ''UGH boots, UG boots'' and ''UGG boots'' ("or other variations") without hyphens are all generic terms in Australia.<ref>Decision of the delegate of the Registrar of Trade Marks with reasons. January 16, 2006 pg 10 - 11</ref> IP Australia also ruled that the trademark "UGH-boots" (with hyphen) should be removed from the trademark register for non-use as Deckers had only been using the UGG logo, not the UGH marks.<ref name="HynesUggHowAMinnow" /><ref name="UggHowAMinnowHynes" /> Deckers initially declined to pay Uggs-N-Rugs court costs as required by the 2006 ruling.<ref name="terry2008p188">{{Cite journal| title = Where's the Beef? Why Burger King Is Hungry Jack's in Australia and Other Complications in Building a Global Franchise Brand | last1 = Terry | first1 = Andrew | last2 = Forrest | first2 = Heather | journal = Northwestern Journal of International Law and Business, 2008 | volume = 28 | issue = 2 | page = 188 | issn = 0196-3228 | year = 2008 }}</ref> Following the publication of a [[Wall Street Journal]] article which referred to the oversight, Deckers paid the costs in September 2010.<ref name="WSJ"/> The ruling only applies in Australia and Deckers still owns the trademarks in other jurisdictions such as the US, [[China]], [[Japan]] and the [[European Union]].<ref name="UggHowAMinnow" />

In support, Koolaburra provided the testimony of America's National Surfing Team coach [[Peter Townend (surfer)|Peter Townend]] and [[Nordstrom]]'s footwear buyer Heather Kolkey. These declarations were accepted by the court as anecdotal. Additionally, Koolaburra provided three instances of the generic usage of Ugg in American magazines,; however, the court pointed out that the most recent was dated 1980. Koolaburra also quoted the [[New York City]] published [[Oxford English Dictionary]] definition of "Ugg"; however, this was rejected after Deckers petitioned the Dictionary to change the definition of "Ugg" from "a kind of soft sheepskin boot" to a definition that included UGG’sUGG's trademark, which the OED agreed to do.<ref name="Koolaburra"/><ref name="WSJ">[http://magazine.wsj.com/features/behind-the-brand/the-golden-fleece/ Behind the Brand: The Golden Fleece] [[Wall Street Journal]] September 9, 2010.</ref> Koolaburra then argued that the UGG trademark was invalid as Brian Smith had fraudulently registered the name by giving false representations that the term was not generic, arguing that "as an Australian citizen, Smith knew of the fact that the term Ugg was a generic term". This was rejected by the court as fraud requires an applicant to "knowingly" make the false representations, ruling that such belief was subjective, and finding that even if Smith knew the term was generic in Australia, he may have "honestly held [a] good faith belief" that it was not generic in the United States.<ref name="Koolaburra"/>

The Australian Sheepskin Association is attempting to change the name UGG into a regional mark similar to that achieved for [[Champagne]] which would negate it'sits trademark status in many jurisdictions. Deckers in response has focused on the fact that its UGG boots are made in China and not Australia.<ref name="az">[http://azrightstrademarkregistration.co.uk/category/international-trademarks/ UGG Trademark Disputes] Azrights Solicitors. London April 8, 2013</ref> In 2012, sales of Deckers UGG boots totaled over US$630 million while the UGG brand, which now includes hats, scarves, gloves, slippers, casuals, jackets, coats, and handbags<ref name="PR 2004" /> totaled over US$1 billion with 30% of sales outside of the United States.<ref name="Bloomberg" />

*During a [[counterfeit|trademark infringement]] and [[trade dress]] case in 2008, a generic term defense was rejected by a [[Netherlands|Dutch]] court as not being applicable to counterfeit goods. The court also rejected La Cheapa's claim that as Australian companies believe "ugg" was a generic name, the "UGG AUSTRALIA" mark was not protected in the Benelux, noting that La Cheapa also admitted knowing that UGG in the Benelux is a famous brand which undermined their argument that UGG was generic.<ref name="Dutch">{{Cite documentjournal | title = Verdict: Case number / Docket number: 74950 / HA ZA 08-2234]| url = http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDOR:2008:BG8866 | publisher = Court Dordrecht | date = December 24, 2008 |language = [[Dutch language|nl]]}}</ref> La Cheapa distributed sheepskin boots it had purchased from a supplier in China on an Internet site from the Netherlands, describing them on its website as "100% authentic Ugg Australian boots!!!", with "UGG logo on the heel" and in boxes virtually identical to Deckers packaging. These were found by the court to be counterfeits. The Deckers case had also included La Cheapa's sale of imported boots manufactured by Jumbo Ugg Boots Binder Production Pty Ltd in [[Melbourne]], Australia branded ''Jumbo Uggs.'' The court stated that "given the exact similarity of the goods (namely: boots)" and the fact that the word "ugg" was part of the brand, and the undisputed fact that the "UGG brand" was popular in the [[Benelux]], it found that the importation and distribution of sheepskin boots which contained the word "ugg" in its label took an "unfair advantage of, or is detrimental to, the distinctive character of the brand UGG" and was thus an infringement of the Deckers trademark.<ref name="Dutch"/>