Federal Circuit Triggers Potential Circuit Split As Brand Deal Gets Ugly For Aussie Boot Maker | Bracewell LLP
It’s hard to deny the comfort of the plush fur-lined boots and slippers sold under the UGG® brand. But not many people know that the word “ugg” originated in Australia as an umbrella term for sheepskin boots. The term, which is a registered trademark in the United States, has sunk into controversy: What legal test should apply to foreign words that are generically used in another country of English-speaking origin?
For international companies wishing to introduce products or services to the United States, a careful analysis of potential brands and their foreign counterparts is crucial. As recently learned from Australian Leather Pty. Ltd., based in Sydney, one should be wary of US trademark rights for generic terms for a product in the country of origin. Similar concerns also exist for US companies hoping to enter foreign markets with terms considered generic in the United States, but not potential foreign markets.
Australian Leather has asked the United States Supreme Court to overturn a Federal Circuit ruling asserting its loss in the lawsuit of the owner of the “Ugg” brand, Deckers Outdoor Corp.1 In the district court, Deckers successfully argued that Australian Leather deliberately infringed several of its “Ugg” brands by selling a handful of Ugg-branded boots in the United States.2
Australian Leather points to a double circuit in the application of the foreign equivalents doctrine, which prohibits the protection of trademarks for generic terms of foreign origin. But this test usually only applies to words translated from a foreign language. Australian Leather specifically cites Second, Seventh and Fifth Circuit cases in which the courts also considered the meaning of the term in its place of origin as part of its analysis.
In addition, Australian Leather raised questions about the standard to be applied to contested marks as generics upon inception, as opposed to those that were initially protectable, but which may have become generic over time due to popular use. Under Lanham Law, courts typically determine whether a registered trademark has become generic by testing the primary meaning of a registered trademark to the relevant audience. If a trademark is deemed to be generic, it is no longer entitled to trademark protection. Australian Leather contends that the term “ugg” was generic in Australian and American surfing circles before the mark was registered and, therefore, the district court’s use of the primary significance test was erroneous.
While Australian Leather may ultimately succeed in gaining attention, this is not the first example of a company being thrown like a heel in hopes of entering the US market with a brand from a foreign English-speaking country. Savvy fans of healthy baking shows have probably noticed that the UK‘s “Great British Bake Off” is known in the US as the “Great British Baking Show”. The name change was due to the fact that Pillsbury, an American company, already owned the term “Bake Off”.3
However, the Australian Leather case has become more than just a rebranding. Reports indicate that the Australian government provided financial support for Australian Leather’s appeal, presumably to release the mark for use by other Australian companies.4 It remains to be seen whether this appeal will ultimately end up in the court’s already crowded role.
1. Motion for writ of certiorari, Australian Leather Pty. Ltd. vs. Deckers Outdoor Corp., – US – (October 6, 2021) (n ° 21-513).
2. Deckers Outdoor Corp. vs. Australian Leather Pty. Ltd., 16 CV 3676, 2020 WL 4723980, at * 1 (ND Ill. July 13, 2020); see Deckers Outdoor Corp. vs. Australian Leather Pty. Ltd., 340 F. Supp. 3d 706, 709-16 (ND Ill. 2018) (analysis of the arguments).
3. Debanjali Bose, The Great British Bake Off has a different name in the United States due to a Pillsbury brand, Insider (October 13, 2020, 5:17 PM), https://www.insider.com/great-british-bake-off-has-different-name-in-america-trademark-2020-10; see BAKE-OFF, registration number 1 824 653.
4. Natalie Lasek & Brighid Vertu, A dispute over David and Goliath-style UGG boots, Lexology (September 20, 2021), https://www.lexology.com/library/detail.aspx?g=ffc1002a-aeec-4750-9d78-bb373e53c3dd.