UGG Australia

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UGG Australia
Founded 1978
Founder(s) Brian Smith
Headquarters Goleta, California, U.S.
Area served Worldwide
Products Footwear, accessories
Website www.uggaustralia.com

UGG Australia (or simply UGG) is an American footwear company and is a division of the Deckers Outdoor Corporation.

UGG is a registered trademark in the United States and over 130 other countries for their brand of sheepskin boots and other footwear, as well as bags, clothing, outerwear and other goods. Deckers also owns registrations for their UGG Australia brand in various countries around the world. Deckers is headquartered in Goleta, California[1] with an e-commerce division located in Flagstaff, Arizona.[2]

The UGG brand is best known for its "Classic" sheepskin boots in the Australian ugg boot style, worn by both men and women. UGG brand boots have been identified as a fashion trend for men and women since the early 2000s.[3][4] The range has expanded to include not only footwear, but UGG brand bags, clothing, outerwear, hats, gloves and other goods. Deckers has reported sales of US$689 million under the UGG brand in 2008,[5] an increase from US$14.5 million in 1995.[6]

In 2012, sales of the UGG brand worldwide were over US$1 billion.[1]

History

A pair of UGG Australia boots

By the mid-1970s, several surf shops in Santa Cruz, California and the San Fernando Valley were selling Ugg boots purchased by the shops owners while visiting surfing events in Australia. Seeing the success of the boots in the U.S., in 1978, Australian surfer Brian Smith, then living in Santa Monica, California, and Doug Jensen applied to be the United States distributors for the Western Australian Ugg boot manufacturer, Country Leather. Family friends invested $20,000 into the new venture and the group set up Ugg Imports. In their first season in business, Ugg Imports sold 28 pairs of boots. Due to other business commitments, in 1979 Jensen handed over his share of the company to Smith. Sales steadily grew and Smith set up Ugg Holdings Inc. and in 1985 registered a US trademark on a rams head logo with the words "Original UGG Boot UGG Australia".[7] In 1995, Deckers Outdoor acquired the business and continued to expand it. Despite being a unisex brand and having world wide popularity, UGG Australia has been stigmatized as a women's only product. In hopes of attracting more male consumers, UGG started an ad campaign with New England Patriots quarterback Tom Brady in 2012.[8][9] In 2012, UGG had over $1 billion (U.S) in sales.[1] UGG footwear is manufactured in China,[10] from Australian sheepskin.[11][12]

Trademark disputes

In 1971, Shane Steadman registered the trademark UGH-BOOT on the Australian Trade Mark Registry, and obtained an Australian registration for UGH in 1982. These registrations remained valid in Australia until removed for non-use in 2006. Steadman sold his UGH brand boots widely in Australia throughout the 1970s and 1980s.[citation needed] This registration was subsequently sold to Ugg Holdings Inc. in early 1995. In August 1995, Deckers Outdoor Corporation purchased Ugg Holdings, and in 1999 registered Ugg Holdings trademarks, including the UGG AUSTRALIA label (with sun-like device), in the United States. Deckers holds registrations for the UGG trademark in the United States, China and over 130 other countries.[13]

Bruce and Bronwyn McDougall, owners of Uggs-N-Rugs, a Western Australia-based manufacturer, started legal action against the UGH-BOOTS registration in Australia in 2005. Specifically, they brought a non-use action against Deckers alleging that Deckers had not actively used the UGH-BOOT trademark in Australian commerce for the past three years. Their action was successful, and the UGH-BOOT registration was removed from the Australian Trademark Registry.[14]

The validity of the UGG trademark outside of Australia has also been challenged, but courts have consistently upheld its validity. 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.[15]

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.[15][16] 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.[15]

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.[15] In February 2005, the court ruled for Deckers on their claims of "trademark infringement" and "unfair competition", stating that consumers in the United States consider UGG to be a brand name, and 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 country's rulings.[15]

Recent cases

In a second Australian 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 the trademark was narrowed, restricted to just footwear.[17] Finally, in 2010, IP Australia ruled on a dispute dating back to 2004. The decision rejected Deckers Outdoor Corporation Inc's objections, and granted Luda Production Pty Ltd the right to move to the registration phase of their UGG AUSTRALIA and MADE BY UGG AUSTRALIA labels and the phrase MADE BY UGG AUSTRALIA, subject to appeal.[18]

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.[19] On 25 August 2011 the case was dismissed with prejudice by stipulation of the parties but the terms of the settlement were not disclosed.[20][21]

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.[13] 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.[13] Deckers was also awarded costs in the action.

Counterfeiting

With increasing popularity, Deckers UGGs became a popular target for counterfeiters as they are inexpensive to make, have a relatively high sale price and are rarely discounted. According to Deckers' brand-protection unit, in 2009 it took down 2,500 fake websites, 20,000 eBay listings and 150,000 other online auction listings with 60,000 pairs of counterfeit UGGs confiscated by customs agents.[22]

During a trademark infringement and trade dress case, a generic term defense by a Dutch distributor was rejected by a Dutch court.[23] 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" in boxes virtually identical to Deckers packaging.[23] The court ruled in favor of Deckers with proportional costs awarded against La Cheapa, finding that UGG is a well-known brand in the Benelux economic zone.[24] In that case the court stated:

... the objection (to validity) will be stricken down. [Defendant's argument is] that Australian companies, such as Jumbo Ugg believe that the word UGG is a generic name. One cannot establish the fact that this is considered a generic name in Benelux based on the opinion of one or more companies in Australia. ... therefore, the legitimacy of the brand is upheld. The court has no reason to doubt that [UGG] is a well-known brand in Benelux.[24]

As Deckers had made no attempt to settle out of court, the court reduced the damages due. Proportional costs of €11,699.00 was awarded in lieu of the €17,548.30 in legal costs sought by Deckers along with forfeiture of €548, being 80% of the profits from La Cheapa's sales of the counterfeits.[23] The case is binding law throughout much of Western Europe under the Madrid Protocol.[citation needed]

Law enforcement officials in Great Britain, the U.S. and China have reported seizures of counterfeit UGG brand boots.[25][26][27]

In 2009, US customs agents confiscated 60,000 pairs of fake UGG boots, and the company took action against 2500 websites that were selling fraudulent products, as well as some 170,000 listings on eBay, Craigslist and similar sites.[28][29] Leah Evert-Burks, director of brand protection for Deckers, told The New York Times: "The consumer is blind as to the source of the product ... Counterfeit Web sites go up pretty easily, and counterfeiters will copy our stock photos, the text of our Web site, so it will look and feel like" the Deckers website.[28]

According to the Glasgow Evening Times in July 2010,

Gangs of criminals have flooded Glasgow with fake footwear. ... Authorities across the west of Scotland have seized hundreds of pairs of the must-have footwear ... Neil Coltart, at Glasgow City Council, said: "These boots come in boxes that look like the real thing, with tags and labels. But the product clearly isn't the quality you'd expecty from Ugg." ... Out of their slick packaging, the boots were clearly not made of Ugg's comfy sheepskin, but a cheap man-made fur. One even had its distinctive Ugg trademark glued on to its heel upside down. Holding up a pair, [Coltart] said: "I think most people would be pretty disappointed if they bought Ugg boots and brought these home."[30]

Deckers continually monitors usage of the UGG trademark on the World Wide Web, taking action against auctions and websites that infringe its trademark. The Australian Trade Marks Office, IP Australia cautions:

"A trade mark registered under Australia's trade mark laws only provides rights for trade within Australia's borders. Trade mark laws are national laws and each country registers and protects trade marks within their own jurisdiction. ... The Internet provides easy access to global markets and takes no account of national borders. If you are trading on the Internet you need to understand the laws of the country into which you are selling goods or services. If you place an offer for sale on the Internet in Australia that invites purchase from overseas, this can amount to trading overseas and could leave you vulnerable to legal action and expensive litigation. Likewise an overseas proprietor selling goods in Australia via the Internet may infringe an Australian trade mark."[31]

The National Arbitration Forum, which has been appointed by ICANN to resolve most Internet domain name disputes, has used Deckers Outdoor Corporation ownership of the UGG trademark in the United States as part of several decisions to direct Internet domains containing UGG to be transferred to Deckers.[32][33][34][35][36][37]

Concern for animals

Since UGG boots are one of many clothing products made from animal skin, the production of UGG boots has been the subject of criticism by the animal liberation movement.[38] In the decade beginning in 2000, the group[who?] called for the boycott of UGG boots and their replacement with alternatives not made from animal skin.

In 2007, Pamela Anderson, realizing that UGG boots were made of skin, wrote on her website: "I thought they were shaved kindly? People like to tell me all the time that I started that trend – yikes! Well let's start a new one – do NOT buy Uggs! Buy Stella McCartney or Juicy boots."[39] In February 2008, the Princeton Animal Welfare Society staged a campus protest against the fur industry, particularly attacking the ugg boot industry. "Students lay in the newly fallen snow on the Frist Campus Center's North Front Lawn on Friday afternoon, feigning death, wearing coats covered with fake blood and sporting signs that read, 'What if you were killed for your coat?' "[40]

See also

References

  1. ^ a b c Sutherland & Tara Lachapelle, Brooke. "UGGs in Play With Deckers Seen Luring Buyers: Real M&A". Bloomberg.com. Retrieved February 23, 2013. 
  2. ^ Wittig, Stacey (January 3, 2011). "Footwear Innovators Building Global Lifestyle Brands from Flagstaff". Flagstaff Business News. Retrieved April 13, 2012. 
  3. ^ Grant, Lorrie (December 11, 2010). "UGG Australia boots a fashion kick". USA Today. Retrieved August 25, 2010. 
  4. ^ Stimpert, Desiree. "Everything You Ever Wanted to Know about Ugg Boots". About.com. Retrieved August 25, 2010. 
  5. ^ Abkowitz, Alyssa (August 19, 2009). "Deckers finds its footing with Uggs". Fortune Magazine. Retrieved August 25, 2010. 
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  27. ^ Administrative Penalty Decision: Chen Gong Shang An Zi (Chengjiang Township A.I.C. Case) No. (2010) 00005, Administration for Industry & Commerce of Jiangyin City, Wuxi Municipality, January 6, 2010 
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External links