A few months ago, a federal appeals court ruling involving the UGG AUSTRALIA brand left some scratching their heads. The U.S. Trademark Office will generally not register a trademark (that is, recognize exclusive rights through issuance of a trademark registration) for a product category. Think LINOLEUM for flooring, THERMOS for insulated containers, and ELEVATOR for lifts. All these words were once trademarks but then became product category names through common usage, which is why the owner of VELCRO for hook and loop closures is fighting to keep its brand a brand. Conversely, some have been able to capture exclusive rights in common words that have become associated exclusively with a single source of goods. Examples include SCHOLASTIC for books or CHAPSTICK for lip balm.
But what if a brand is born a common name in some country outside the U.S., but someone claims it’s a brand name here in the U.S.? That’s exactly what happened in the UGG AUSTRALIA litigation. After a five-year battle, the Federal Circuit Court of Appeals found that UGG AUSTRALIA was a valid trademark, not generic. The challenge to the UGG U.S. trademark registration was brought by Eddie Oygur, a seller of “ugg” boots in Australia. In Australia, “ugg” is the common name for sheepskin boots lined with fleece, which have been made since the 1930s.
After Mr. Oygur sold 13 pairs of his “ugg” boots through his company Australian Leather’s website to U.S. customers, the owner of the UGG AUSTRALIA brand, Deckers Outdoor, sued Australian Leather for trademark infringement. Deckers based its suit on trademark rights it had acquired from Brian Smith, an Australian entrepreneur who registered UGG as a brand in the 1980s, and Deckers’ UGG AUSTRALIA trademark, which it first registered in the U.S. in 1995. Deckers also owns the trademark in more than 130 other countries, which means Australians cannot sell “ugg” boots internationally.
The parties’ arguments centered on whether “ugg” is a “generic” name — that is, the name of a product category (a type of shearling lined boot) — or whether it is a brand name that U.S. customers recognize as coming from a single source (Deckers). Australian Leather noted that before it was registered, “ugg” was used generically to refer to a product category even in the U.S. The Federal Circuit affirmed, without an opinion setting forth its rationale, the lower Illinois federal district court’s ruling that U.S. customers understand UGG to be a brand name, not a category name. Which no doubt left Mr. Ogyur, as well as perhaps many other Australian sellers, saying “Ugh!”