The "UGG"ly lesson - The Importance of Conducting Due Diligence

The UGG brand has long been synonymous with comfort, style, and luxury in the world of footwear. Over the years, this simple yet innovative piece of footwear has garnered a loyal following and become a staple in wardrobes worldwide. 

In Australia, the word UGG is a generic term used to describe a type of sheepskin boot. As a result, this term does not qualify for trade mark protection in that jurisdiction. Due to the generic and descriptive nature of the word UGG in the Australian market, several entities producing these boots refer to their products as “UGGs”, as no individual or entity may claim exclusivity over this word. 

Notably, outside Australia, the legal position regarding the word UGG differs significantly from a trade mark perspective, as it is a major brand name rather than merely a generic term for a boot. For instance, in countries such as the United States and Canada, an entity called Deckers Outdoor Corporation has secured registered trade marks for the word UGG. 

In the recent case of Deckers Outdoor Corporation vs. Wolverine Group Pty Ltd, the use of the word UGG in the United States came under scrutiny. An Australian family-owned business trading as UGG Since 1974, which had been producing UGG boots and related products in Australia for an extended period, had also been selling its UGG branded products in the United States. Given that Deckers Outdoor Corporation owns the UGG trade marks in the United States, it sued the Australian entity for trade mark infringement. As a result of the legal action taken against it, UGG Since 1974 has subsequently announced that it is rebranding its products to SINCE 74 for international markets outside Australia and New Zealand. 

The above case clearly illustrates the territorial nature of trade mark rights. Although UGG Since 1974 is allowed to use the word UGG in Australia, it faced significant legal challenges when entering an international market where this word is the proprietary right of a third party. 

This case highlights the importance of conducting thorough due diligence when conceptualizing and launching a brand. Naturally, the starting point is to ensure that a given brand is available in the jurisdiction where it is first developed. However, it is equally imperative to extend this due diligence to each foreign territory that the brand owner may target in the medium to long term. This approach offers two key benefits: 

1. It serves as a risk mitigation strategy, allowing the brand owner to identify potential legal challenges before incurring significant costs in brand development; and 
2. If the trademark is available, it ensures that the brand owner’s rights and, ultimately, brand equity are adequately protected. 

In the context of brand development and trade mark rights, the old adage rings true: prevention is better than cure.