In Australia, the word ugg is generic – it describes a type of sheepskin boots lined with fleece that have been made since the 1930s. Anyone can sell ugg boots in Australia, and many do.
The same isn’t true in the United States – or in many countries around the world. UGG was first registered as a trademark in 1985, and has become very well known for boots. The UGG brand, now owned by Deckers, has grown immensely over the years, and is now used in connection with shoes, clothing, accessories, bedding and other goods. Last year, Deckers earned $2 billion in revenue, with three-quarters of that coming from the UGG brand.
When Australian ugg maker Australian Leather sold its ugg boots online to consumers in the United States, Deckers sued for trademark infringement. In a legal battle that has lasted more than five years, Australian Leather has argued that Decker should never have been able to register UGG as a trademark, since it is a generic term in Australia. The Decker trademark registrations effectively prevent Australian Leather from selling its genuine Australian ugg boots outside of Australia, severely cramping the company’s prospects. Deckers claimed that while ugg might be generic in Australia, trademark rights are national, and consumers in the United States have long considered UGG to be a brand.
Last week, the US Court of Appeals for the Federal Circuit affirmed a lower court’s ruling that the UGG trademark is valid, and that Australian Leather’s sale of ugg boots in the United States constituted trademark infringement.
This seems to be the right result. Trademark rights are national, and just because a word is generic in one country doesn’t mean it is generic around the world. For example, ASPIRIN is generic in the United States, but a registered trademark owned by Bayer in many countries around the world. Similarly, CELLOPHANE was originally a trademark in the United States, owned by DuPont. Today that term is generic in the United States, but a registered trademark owned by Innovia Films in Europe and elsewhere.
This case serves as a reminder of the challenges that come with growing a business. Most companies now have an online presence, and the ability to ship their goods or provide their services internationally. However, business owners must be mindful of the fact that even if their brand is registered as a trademark in the Untied States, using a brand outside of the United States without doing trademark clearance could give rise to trademark infringement claims.
