With the registration of the terms UGH-BOOT and UGG AUSTRALIA as a trademark in Australia by a foreign corporation, a legal, media and fashion war now surrounds the classic Aussie ugg boot. Samantha Joseph provides a snapshot of the issues.

Introduction

The term ‘ugg’ has become engulfed in a nasty fight as an American corporation has been granted registration rights over the term ‘ugg’ to the disbelief of many Australian companies, politicians and the media. As Australians we firmly believe that the infamous ‘ugg’ boot is an Aussie icon. The question then is ‘who owns the term ‘ugg’? This article will provide a snapshot of the trade mark system and, in particular, the requirements for registration and grounds for opposition of a trade mark.

Background

The ugg boot apparently originated in rural Australia in the 1920’s. At that time, no one bothered to register the term ‘ugg’ as it was a considered a term that was common and used by people in the ‘ugg’ sheepskin industry. In 1971, however, an entrepreneurial Australian surfer capitalized on the popularity of the boot and registered the term UGH - BOOT. He then sold his rights to an American conglomerate, Deckers Outdoor Corporation (Deckers). In 1999 Deckers registered the term Ugg Australia. Deckers are now trading in Australia as Ugg Holdings Inc (Ugg Holdings). This means that every company trading, advertising or using the term ugh may be contravening Ugg Holdings’ rights to the term as the owners of the trade mark.

Recently, Deckers issued letters to a number of small Australian companies who produce or deal with ugg boots, threatening them with legal action, including litigation, if they continue to use the term ‘ugg’. This would include prohibiting companies from selling ‘ugg’ boots on EBay and in domain names. As trade mark owners Deckers (or Ugg Holdings) have exclusive rights to issue such action. This includes bringing action for infringement.

What is a trade mark?

The Trade Mark Act defines a trade mark as a sign which distinguishes goods or services from any other person’s goods or services. Trade mark registration requires goods or services to be distinctive, in that the sign must be inherently capable of being distinguished from another person’s goods or services. Distinctiveness is established where the trade mark is unlike other goods or services used by another in the course of business. Where a trade mark is similar to another in trade then it is not distinctive and incapable of registration.

There are a number of ways that a trade mark can be opposed. This includes where someone else had used the trade mark prior to the date of application or where the trade mark is a generic term.

Is ‘Ugg’ a generic term?

Australian opponents of Deckers argue that the term ‘ugg’ has been used widely in Australian from as far back as 1920’s. One might, therefore, imply that as a result the term is generic. Media reports have also claimed that no-one bothered to register the trade mark in the past as the term was so obviously generic. To establish if a term is generic, however, you need to show that the word or phrase is or has come to be a common term associated with a particular category of goods or services to which it relates.

The question then is - does the term ugg boot have the capacity to distinguish the goods of one ‘ugg’ boot producing company from another? In Westinghouse Electric Corporation v Thermopart Pty Ltd [1] the word ‘Laundromat’ had become a generic term – that is, no longer specific to one particular washing machine company, Westinghouse, who produced washing machines called ‘Laundromat’. The Court analysed various forms of evidence, including magazine and television shows which suggested that the term had taken on a general meaning. In the end, the Court held that the evidence was in fact “flimsy” and that the word ‘Laundromat’ had not achieved generic meaning. This means that Westinghouse, who had registered the trade mark ‘Laundromat’, could succeed in stopping others from using the term in trade as a trade mark.

Whether or not a term is generic or not, however, can be very difficult to predict and can only be determined on a case-by-case basis. And whether or not the term ‘ugg’ has a generic meaning is yet to be determined.

Conclusion

For the most part, Australian companies do think that the word ‘ugg’ is generic and therefore should not be registered as a trade mark. If this is their view, it may be tested if and when one or more of these companies are sued by Deckers. Alternatively they may apply to the court to have the Trade mark registration to be removed. None seem to have initiated such an action yet. To be continued. . . .

Well the action was initiated and was done by a little home based business in Western Australia called Uggs-N-Ruggs. This battle has been refered to as the David & Goliath battle. David won. Here is the legal findings................................

Well that's a relief. Ugg Boots is generic... (UPDATED 20 Jan 2006)

The Trade Marks Office (IP Australia) has apparently ruled that 'Ugg Boot' is a generic term . As such, it can be removed from the Register, putting an end to the exclusive rights of the trade mark owner. Given that no decision appears in AustLII, I'm guessing that this is an initial decision, which could be the subject of review or later, appeal to the courts. The story may not be entirely over. [ Update: The decision is in fact available here ; it is a decision by the delegate under s 101 relating to an application for removal under s 92. As such, it could be appealed to the Federal Court ( s 104 ). The decision is worth reading, if only for the comedy value in seeing how 'UGG', 'UGH', etc have been used. After the decision, the trade mark owner's lawyers issued a statement, noting that Deckers had the right to appeal the decision and was "considering its position":

http://weatherall.blogspot.com/2006_01_01_weatherall_archive.html

UGG HOW A MINNOW PUT THE BOOT INTO A FASHION GIANT

Independent, The (London), Jan 18, 2006 by Kathy Marks

They are as Australian as Rolf Harris, although until a few years ago ugg boots were regarded as dowdy and worn only in the privacy of people's homes. Then celebrities such as Gwyneth Pal-trow became fans, sales rocketed, and an Australian cottage industry found itself in conflict with the hard-nosed world of international fashion.

For decades, local traders used the name "ugg" to describe their product, which - legend has it -dates back to the days when shearers wrapped sheepskin around their feet to keep warm. Surfers, too, recognised their merits, pulling on the boots when they emerged from the surf.

Then in 2004, at the height of the ugg-boot craze, Australian manufacturers - most of them small outfits with a handful of workers - received letters from an American conglomerate, Deckers Outdoor Corporation, instructing them to stop using the name or face litigation.

Deckers, it emerged, had bought the trademark, and it did not want competition, not even from the likes of Westhaven Industries, a disabled services charity that employs 65 people at its factory in New South Wales.

As disbelief turned to defiance, local companies banded together to fight the legal challenge. It was a David and Goliath battle that, in a world buffeted by the chill winds of globalisation, they seemed certain to lose. But some stories have a happy ending, which is why Bronwyn and Bruce McDougall, owners of Perth-based Uggs-n- Rugs, are pinching themselves with delight today.

The McDougalls had appealed to the organisation that regulates trademarks in Australia, claiming that ugg - originally an abbreviation of ugly, so it is believed - was a generic term. Yesterday they received the news that the regulator, IP Australia, agreed. The name is to be removed from the register of trademarks. Local manufacturers can once again call their boots uggs.

Mrs McDougall said she and her husband were thrilled. "This is a moral victory for all Australians," she said.

There was elation, too, in the town of Maitland, 100 miles north of Sydney, where the Mortel family has been producing ugg boots for nearly 50 years. Frank Mortel, now 73, set up a tiny sheepskin factory after emigrating from Holland in 1958, bringing with him a few sewing machines.

Descended from six generations of orthopaedic boot mak ers, he made hisfirstpairof fur-lined slippers for his wife, Rita, who had complained of cold feet. He then began to manufacture the slippers and boots commercially. "We called them uggs from the start," said Mr Mortel, who believes that Deckers was "trying to frighten people off".

His son, Tony, who runs the family's factory, turning out 16,000 pairs of fur-lined boots a year, agrees. "People around the world know them as uggs," he says.

So how did a quintessentially Australian product end up being hijacked by a corporation based in Santa Barbara, California? To understand it, you have to go back 35 years.

In 1971, a local surf champion, Shane Steadman, decided to capitalise on the popularity of uggs among Australian and visiting US wave riders. He began sell-ingthe boots and registered the name. Then in 1979, Brian Smith, another Australian surfer with a sharp business eye, went to New York with a few pairs in his rucksack. He set up a company, Ugg Holdings Inc, registered the Ugg trademark in 25 countries and sold out to Deckers in 1995.

As far as the American company was concerned, it now owned the ugg boot, and in 1999 it sent out a flurry of warning letters to Australian traders. It did not, however, follow them up. According to Middletons, the Melbourne law firm that represents Deckers, it was only when the Australians began selling uggs over the internet to meet soaring international demand that it felt obliged to crack down.

In the meantime, of course, uggs had made the transition from fashion crime to fashion icon. They were being seen on the streets of Paris and Beverly Hills, worn by the likes of Kate Moss, Madonna and Pamela Anderson. Waiting lists swelled as consumers clamoured for a pair. No longer made just in boring styles and only in tan, they were now being produced in pale pink, denim and lavender, some of them embroidered, others trimmed with lace.

With supply unable to meet demand, many shoppers looked online, and found the likes of Uggs-n-Rugs and Blue Mountains Ugg Boots. That was anathema to Deckers, which marketed the boots through the UGG Australia brand.

In early 2004, in the middle of the European winter, Deckers sent letters to 20 Australian firms, informing them that it owned all rights to Ugg and ordering them to stop using it.

Tony Mortel "just laughed... t thought they were crazy. I threw it in the bin". But soon afterwards, at the instigation of Deckers, Mor-tels Sheepskin Factory was ejected from eBay, the internet auction site where it had been selling uggs to American shoppers. It was ordered by Icann, the internet regulatory body, to stop using ugg in its domain name.

Mr Mortel was furious. The demand for him to renounce the ugg name, without compensation, amounted to "borderline monopolisation", he says.

At Westhaven Industries, based in Dubbo, NSW, the general manager, Gordon Tindall, was similarly outraged. Uggs were the charity's most profitable product and, without them, the business would not survive. West-haven employs the likes of Dougie Stewart, who has been making the boots for 30 years.

In the Blue Mountains, west of Sydney, Brian Iverson, whose family has made uggs for three generations, was horrified by the letter. "Uggs are as Australian as the Harbour Bridge," he says.

The manufacturers decided to unite under the banner of the Ugg Boot Footwear Association, and set up a fighting fund. The thrust of their argument was that Brian Smith, the surfer, was awarded the trademarks in error, because ugg was a generic term, meaning a flat- heeled, pull-on sheepskin boot.

Mr Tindall believes that ugg is "as generic as meat pie or tomato sauce", and says of Deckers: "It's like Ford Motor Company claiming that they own the word 'sedan'." Mr Iverson uses a similar metaphor. "It's like saying you can't call a car a car."

The Australian firms decided to try to have the trademarks rescinded, in Australia at least. Their only other option was to give up and go under - for without the name ugg, they believed, they could not sell their boots.

Now they have been vindicated by the trademark body's decision. Ian Thompson, the officer who heard the case, said "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".

The ruling may be challenged by Deckers, and applies only to Australia. The company still owns the trademark in other jurisdictions including the US, which means that Australian manufacturers are unable to sell in that country.

David Stewart, lawyer for the McDougalls, said it was possible that the decision would have "some sort of domino effect". Past attempts to have the trademark removed from the US register had failed because the courts had not been convinced that ugg was a generic term in Australia, he said. A future challenge might be more successful.

Deckers did not react to yesterday's ruling. But in the past its lawyers, Middletons, have objected to the portrayal of it as "some big, bad, aggressive American company that likes squashing small businesses". Tony Watson, a Middletons partner, said it was Deckers that had transformed the boots into a high-fashion item, spending $7m (pounds 4m) on marketing and sending them to celebrities such as Oprah Winfrey. It was naturally reluctant to see others reaping the benefit.

But, according to Mr Mortel, Australian manufacturers worked hard for decades to market uggs, onlytoseethe name appropriated. His firm and others had long been exporting to the US and elsewhere, he said. "Between us, we must have spent far more than Deckers on marketing."

The main challenge now facing Deckers may not be the trademark decision, which gives local companies free rein to sell ugg boots within Australia. It may be the fact that demand for ugg boots is drying up, as the fickle fashion world looks for the next footwear trend.

The Wall StreetJournal reported last month that a Los Angeles gossip website, Defamer.com, had condemned "the human rights violation known as 'Uggboots'" as well as the "fuzzy-footed fashion slaves who wore them".

According to the newspaper, Deckers is trying to refuel demand by diversifying. It is producing Ugg boots that are studded, embroidered and covered in Gore-Tex. It is also making baby Ugg boots, as well as slippers, clogs and moccasins, and has launched lines of coats, scarves, gloves, hats and sheepskin-lined handbags.

But the must-have boot is no longer an ugg. It is a luxury sheepskin boot made by another Australian firm, Love From Australia, and worn by Sienna Miller, the actress. Ugg-wearers beware Ugg is'as generic as meat pie or tomato sauce.

It's like Ford Motor Company claiming they own the word sedan'

Ugg advocates include, from left, Sienna Miller' Kate Moss' Sarah Jessica Parker, Padma Rushdie and Jennifer Ellison