US Ugg boot manufacturer, Deckers Corporation, is again chasing after the little guy. Deckers have infamously taken action against many small Australian businesses and is now suing a local company, Australian Leather Pty Ltd, in a US District Court. Deckers initiated proceedings for an injunction to be granted against Australian Leather to stop them from using the phrase ‘Ugg boots’ to describe their sheepskin products.
In Australia (and New Zealand), the word ‘Ugg’ is so commonly used that the word itself is not a valid trade mark, but an industry-associated word. Trade marks in Australia that incorporate the word ‘Ugg’ are either protected as a logo (as opposed to the word) or together with a string of other words.
This is not the case in other countries. Deckers own the registered trade mark “UGG Australia” in at least 130 countries across the world. This prevents Australian Leather and many other Australian companies from selling the Ugg boot products overseas.
Eddie Ogyur, the owner of Australian Leather, claims to have lost close to $20 million dollars in business by not being able to accommodate overseas orders of about 200,000 pairs each year to countries such as Germany, where the trade mark is registered.
After unsuccessfully trying to stop local companies from labelling their sheepskin footwear as Ugg boots in Australia, Deckers most recent action is to prevent companies from using the phrase ‘Ugg boots’ overseas.
Nick Xenophon’s Petition
In response to Deckers’ latest lawsuit, Independent Senator Nick Xenophon has started a petition to protect Australian Ugg boot companies and ensure that they can operate overseas.
As an Australian, it would be an understatement to say that the word ‘Ugg’ is a popular term used for generic sheepskin boots. Accordingly, Senator Xenophon has promised to introduce legislation that protects the use of the word ‘Ugg’ by Australian companies.
Senator Xenophon likens his hopes to protect the word ‘Ugg’ to words that are protected in some parts of Europe, saying:
“The French can protect ‘champagne’, the Portuguese protect the word ‘port’, the Spanish ‘sherry’, and even the Greeks, my rellos in Greece protect the word ‘feta’, we should be able to protect the word ‘Ugg’.”
Australian Consumer Law
Deckers use the brand name UGG Australia, but the boots are manufactured in China. Under the Australian Consumer Law, it is unlawful to make misleading statements about a product, including misleading customers about the origin of the product.
Senator Xenophon and Australian Leather is wanting Australia’s consumer watchdog, the ACCC, to investigate Deckers use of the term ‘UGG Australia’ which causes consumers to believe that the boots are manufactured in Australia.
However, Deckers boots do have the label ‘Made in China’ which means that they do disclose the fact that the Ugg boots are not made in Australia. Senator Xenophon and Australian Leather would need to show the ACCC that consumers are led to believe that the boots are manufactured in Australia (not China), beyond the fact that the brand is called ‘UGG Australia’.
Australian Leather owner has vowed to fight Deckers and put an end to Deckers’ trade mark wars with small local businesses. If Deckers succeeds, Australian Leather and many other local Ugg boot manufacturers will find it tough to sell their Ugg boots overseas using the name ‘Ugg’. Although they may still be able to sell the footwear in Australia, the loss of overseas orders may cost these companies their business.
As we can see from the Deckers and Australian Leather dispute, many factors are considered when assessing an application to register a trade mark, or when assessing the validity of a trade mark, particularly when this involves multiple foreign jurisdictions.
What do you think of this case – does Deckers, Australian Leather or anyone else own the rights to the word ‘Ugg’ or is it a commonly used term that cannot be trade marked? Tag us on Twitter @legalvision_au and let us know what you think.
If you have any questions about registering your trade mark, get in touch with our IP lawyers on 1300 544 755.