Ugg boots trademark disputes

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A pair of ugg boots

Ugg boots (sometimes called uggs)[1] are known in Australia and New Zealand as a unisex style of sheepskin boot 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 those countries, 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.

There has been a dispute between some manufacturers of ugg boots, as to whether "ugg" is a protected trademark, or a generic term and thus ineligible for trademark protection. In Australia and New Zealand, where the term is considered generic, more than 70 registered trade marks include the term UGG in various logos and designs.[2][3][4] By contrast, UGG is a registered trademark of the California-based Deckers Outdoor Corporation in over 140 countries worldwide including the U.S. and China.[5][4]

Contents

[edit] Trademark law in the United States

The Lanham Act is the primary federal trademark statute of law in the United States however, it does not address generic usage in foreign countries. The Doctrine of foreign equivalents guideline serves this purpose.

Under the doctrine of "foreign equivalents" a term used in another country that is considered generic in that country cannot be imported into the United States and used as a trademark. The doctrine is supported by two rationales:

"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."[6]

The second rationale, "the doctrine serves the interests of international comity":

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."[7]

However, the doctrine does not apply if the generic word is not a word from a foreign language but one from an English speaking country.

The doctrine of foreign equivalantcy has been used to argue the genericity of Ugg Boots and has been rejected on the following grounds:

The generic status accorded to English words in foreign countries has no bearing on the registration of marks in the United States. For example, 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 Low-alcohol beer.[8] The court ruled that "a term may be generic in one country and suggestive in another".[8] 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: "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." [9] 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.[10]

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.[11] 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's trademark laws. Under the proposed changes, "Terms that are generic are never protectible as trademarks and are never registerable".[11][12]

[edit] Trademark disputes

The UGG trademark has been the subject of dispute in several countries. The trademark for "Ugh-Boots" has been removed from the trademark registry in Australia for non-use.[4] Outside Australia and New Zealand, UGG (written in capital letters) is a registered trademark of Deckers Outdoor Corporation.[13]

In 1971, an Australian surfer, Shane Steadman, registered the name "UGH-BOOTS" as a trademark in Australia and began selling sheepskin boots under that name. In 1982 he registered the name "UGH" and a logo containing a stylised Sun with the words "UGG AUSTRALIA".[2] In 1979, Brian Smith, another Australian surfer, applied to be the United States distributor for Country Leather, a Western Australian manufacturer of ugg boots, and began selling their Australian-made boots in New York and to surfers in California.[14] In 1987 he set up Ugg Holdings Inc. and in 1995 purchased the trademarks from Steadman. In 1996 he sold his interest to Deckers and in 1999 Deckers registered the trademarks for "UGG" in the US.[2][15]

In 1999, Deckers began asserting its new trademark and sent out cease and desist letters to Australian manufacturers who were using the name ugg for their boots.[4] In the early 2000s, demand for ugg boots was soaring, partly as a result of US$8 million spent on marketing by Deckers, but also due to several celebrity endorsements.[4] Australian and USA based manufacturers were selling uggs over the Internet, and Deckers' law firm Middletons of Melbourne began a serious effort to halt the Australian companies' sales.[4] In 2004, Deckers sent cease and desist letters to a number of Australian and USA based manufacturers, including Mortels Sheepskin Factory, preventing them from selling uggs on eBay or from using the word in domain names.[16]

In response to these actions by Deckers, some 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. 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's Uggs-N-Rugs, who had been manufacturing uggs since 1978 and selling them online since 1996, appealed to Australian trademark regulators, IP Australia.[4] 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.[4] The case was the subject of a 2006 television documentary, The Good, The Bad and The Ugg Boot..[17]

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.[18] 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.[2][4] Deckers initially declined to pay Uggs-N-Rugs court costs as required by the ruling.[19] Following the publication of a Wall Street Journal article which referred to the oversight, Deckers paid the costs in September 2010.[20] The 2006 ruling only applies in Australia and Deckers still owns the trademarks in other jurisdictions such as the US, China, Japan and the European Union.[4]

In 1998, Deckers demanded that the American company Koolaburra cease infringing the UGG trademark. Koolaburra replied that they did not use the name "UGG" or "UGH" and that the only mark they used was "Ug". Deckers sent a further "cease and desist" letter in 2001 and another in 2003 but Koolaburra declined to stop using the name "Ug" and in 2004, Deckers filed a case against Koolaburra in the California federal court alleging (1) trademark infringement, (2) false designation of origin (Koolaburra labelled their boots "Australian Ug Boots"), (3) trademark dilution, (4) cybersquatting, (5) unfair competition, (6) trade disparagement, (7) unjust enrichment and (8) breach of contract (Deckers claimed that in 1998 Koolaburra had agreed to stop using the name Ug). Koolaburra in turn challenged that the name UGG was generic and not entitled to trademark protection. As the UGG mark was registered, Deckers was entitled to the assumption that it was not generic, thus the burden of proof rested with Koolaburra.[13]

In support, Koolaburra provided the testimony of America's National Surfing Team coach 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's trademark which the OED agreed to do.[13][20] 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 he may have "honestly held [a] good faith belief" that it was not generic in the United States.[13]

Deckers countered through submitting declarations from four professionals in the footwear industry who stated that "UGG" is widely recognized in the industry as a brand name, not a generic term and provided the court with survey evidence supporting that consumers in the US consider UGG to be a brand name; among women aged 18 to 45 who had purchased footwear valued over $100 in the last 12 months, 58% believed UGG was a brand name while only 11% thought it generic. Koolaburra then argued that the term was generic under the doctrine of "foreign equivalents" (Under U.S. law, a term used in another country that is considered generic in that country cannot be imported into the United States and used as a trademark). This was rejected as the doctrine only applied to terms in a foreign language.[13] In February 2005 the court ruled for Deckers on their claims of "trademark infringement" and "unfair competition", finding that a consumer would likely be confused with the similarity in "appearance, sight and sound" between "Ug" and UGG" as the parties were marketing in direct competition with identical products. However the court declined to rule on the validity of trademarks in Australia as it was considered inappropriate to interfere with another countries rulings.[13]

[edit] Recent cases

  • During a trademark infringement and trade dress case in 2008, a generic term defense was rejected by a Dutch court as not being applicable to counterfeit goods.[21] La Cheapa distributed sheepskin boots 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. Deckers case had also included La Cheapa's sale of imported Australian made uggs that were branded Jumbo Uggs however, while the court stated it could not establish that "ugg" is considered a generic name in the Benelux, the use of the name "Jumbo Uggs" was found not to be in violation of Deckers trademark and proportional costs were awarded to the parties.[21]
  • In 2010, IP Australia ruled on the trademark opposition dispute between Deckers and Luda Production Pty Ltd, granting Luda the right to register the trademarks UGG AUSTRALIA (& Design) and MADE BY UGG AUSTRALIA with costs awarded against Deckers. The court found that based on sales, advertising and other promotions, Deckers did not have a significant reputation in an Australian market which was dominated by Luda Productions, and thus failed the requirements of the Trade Practices Act. regarding public misapprehension of the origin of the manufacturer. The court noted that use of the trademark in Australia by Luda Productions predated Deckers infringement application by 22 years which negated Deckers claim that Luda was trading upon their reputation. Deckers has appealed the decision.[22][23] Regarding a non-use action between Deckers and Luda Production Pty, IP Australia confirmed that Deckers owned the trademark of their UGG AUSTRALIA label (with sun-like device), however the scope of Decker's trademark was narrowed, restricted to just footwear.[3]
  • On December 25, 2010, Deckers Outdoor Corporation filed a trademark infringement suit in a bid to stop Emu Australia from using the UGG name on its sales website. On December 30 Emu Australia counter-sued for the cancellation of Decker's UGG trademark in the US. Emu's suit alleged that Decker's trademark was obtained after a false statement to the US Trademark Office and was therefore invalid.[24] On 25 August 2011 the case was dismissed with prejudice by stipulation of the parties but the terms of the settlement were not disclosed.[25][26]
  • In 2010, the validity of the UGG trademark was challenged in a Turkish court by a local manufacturer after his application to register a trademark containing the words UGGBOOTS and AUSTRALIA was rejected. Judge Verda Çiçekli ruled for Deckers, finding that UGG is not a generic term and does not have any descriptive nature in the Turkish language, except to refer to Deckers products.[5] The court further ruled that UGG is a well-known trademark that has gained recognition and distinctiveness worldwide, and while acknowledging the challenger's allegations that UGG is a generic term in Australia, ruled that such alleged facts have no bearing on the validity of the trademark within Turkey.[5] Deckers was also awarded costs in the action.

[edit] See also

[edit] References

  1. ^ Thompson, Ian (16 January 2006). "Decision of a Delegate of the Registrar of Trade Marks with Reasons". IP Australia. http://www.ipaustralia.gov.au/pdfs/trademarks/hearings/245662_060116.pdf. Retrieved 17 November 2009.
  2. ^ a b c d The battle of the UGG BOOT continues Hynes Lawyers February 11, 2011
  3. ^ a b Trade Marks Hearings 16 January 2006. Decision of a delegate of the registrar of trade marks with reasons. Pg 10
  4. ^ a b c d e f g h i j Marks, Kathy (18 January 2006). "Ugg: How a minnow put the boot into a fashion giant". The Independent. http://www.independent.co.uk/news/world/australasia/ugg-how-a-minnow-put-the-boot-into-a-fashion-giant-523444.html. Retrieved 26 August 2010.
  5. ^ a b c Website of Walker Morris UK solicitors firm, Leeds. "Legal Briefing from the Trade Marks and Designs Group, 3 October 2011."
  6. ^ Otokoyama Co. Ltd. Vs Wine of Japan Import Inc. 175 F. 3D. 266,271 (2nd Circuit 1999)
  7. ^ Enrique Bernat 210 F.3D at 433
  8. ^ a b Anheuser-Busch, Inc. v. Stroh Brewery Co., 750 F.2d 631, 641-42 (8th Cir. 1984).
  9. ^ Carcione v. The Greengrocer, Inc., 205 U.S.P.Q. (BNA) 1075 (E.D. Cal. 1979).
  10. ^ Seiko Sporting Goods USA, Inc. v. Kabushiki Kaisha Hattori Tokeiten, 545 F. Supp. 221, 226 (S.D.N.Y. 1982)
  11. ^ a b Elizabeth J. Rest, Lost in Translation: A Critical Examination of Conflicting Decisions Applying the Doctrine of Foreign Equivalents, 96 Trademark Rep. 1211 (2006)
  12. ^ Serge Krimnus, The Doctrine of Foreign Equivalents at Death's Door, 12 N.C. J.L. & Tech. 159 (2010)
  13. ^ a b c d e f Walter, John F. (February 25, 2003), UGG Holdings, Inc. -v- Clifford Severen et al, United States District Court
  14. ^ Julie Neigher (20 December 2009). "It looks like Ugg love". Los Angeles Times. http://articles.latimes.com/2009/dec/20/image/la-ig-ugg20-2009dec20. Retrieved 19 June 2010.
  15. ^ Fink, Karl V.; Johnson, Carolyn M.; Miranda, David P. (February 5, 2004), "UGG Holdings, Inc. and Deckers Outdoor Corporation v. Paul Barclay d/b/a Australian Made Goods", National Arbitration Forum, retrieved August 25, 2010
  16. ^ Arnold, James (19 February 2004). "Aussie boot battle takes an Uggly turn". BBC News Online. http://news.bbc.co.uk/2/hi/business/3495511.stm. Retrieved 23 August 2010.
  17. ^ Produced and directed by Susan Lambert, Jumping Dog Productions (14 September 2006). "The Good, The Bad, and The Ugg boot". Australian Broadcasting Corporation. http://www.abc.net.au/tv/guide/netw/200609/programs/ZY7714A001D14092006T203000.htm.
  18. ^ Decision of the delegate of the Registrar of Trade Marks with reasons. January 16, 2006 pg 10 - 11
  19. ^ Terry, Andrew; Forrest, Heather (2008). "Where's the Beef? Why Burger King Is Hungry Jack's in Australia and Other Complications in Building a Global Franchise Brand". Northwestern Journal of International Law and Business, 2008 28 (2): 188. ISSN 0196-3228.
  20. ^ a b Behind the Brand: The Golden Fleece Wall Street Journal September 9, 2010.
  21. ^ a b (in nl) Verdict: Case number / Docket number: 74950 / HA ZA 08-2234, Court Dordrecht, December 24, 2008
  22. ^ Windsor, Alison (September 29, 2010), Decision of a Delegate of the Registrar of Trade Marks with Reasons, IP Australia, http://www.ipaustralia.gov.au/pdfs/trademarks/hearings/1013798-2010.pdf, retrieved November 13, 2010
  23. ^ Don't feel sheepish about your uggies The Advertiser February 28, 2011
  24. ^ "The battle of the uggs". Shoe Fair Online. 25 January 2011. http://www.shoefaironline.com.au/blog/The-battle-of-the-uggs. Retrieved 7 September 2011.
  25. ^ Leonhardt, Megan (26 August 2011). "Deckers, Emu Resolve Ugg Trademark Suit". Law360.com. http://www.law360.com/ip/articles/267597. Retrieved 7 September 2011.
  26. ^ "Emu and Deckers reach settlement over Ugg name". Just-Style.com. 26 August 2011. http://www.just-style.com/news/emu-and-deckers-reach-settlement-over-ugg-name_id112044.aspx. Retrieved 7 September 2011.
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