By MacKenzie Milam

Law student at West Virginia University College of Law, Milam is part of Dunlap, Bennett & Ludwig Summer Internship Program and holds a strong interest in Intellectual Property Law.

 

[06.07.19 Leesburg]  Deckers Outdoor Corporation, owner of the well-known “UGG” trademark (U.S. Reg. No. 3,050,925), continues to remain a frequent trademark litigant in federal courts.

On May 10, 2019, jurors in an Illinois federal court reached a verdict on a case filed in 2016 by Deckers against an alleged infringer for trademark and design-patent infringement: Deckers Outdoor Corp. v. Australian Leather Pty Ltd., No. 1:16-cv-3676 (N.D. Ill. filed Mar. 28, 2016). The jury found Australian Leather and its owner Eddie Oygur willfully infringed the “UGG” mark when the Australian company sold 12 pairs of sheepskin boots brandishing the mark to customers in the United States. The willful infringement of Deckers’s marks and willful use of at least one counterfeit version was levied $450,000 in damages on those claims by the jury; the other claims still await a bench-trial ruling.

The key issue in the case was whether “ugg” is considered a generic term in the United States. Australian Leather argued that “ugg” should never have been trademarked because “ugg” is a generic term in Australia used to describe sheepskin boots.

While the Lanham Act protects the owner of a registered trademark against the use of similar marks if such use is likely to result in consumer confusion, the doctrine of foreign equivalents protects consumers within the United States from confusion or deception caused by the use of terms in foreign languages. Although the Trademark Manual of Examining Procedure (“TMEP”) sets forth the case-law tests used to determine whether a term is generic, it also shows how the results can be inconsistent in different courts and contexts. See TMEP § 1209.01(c).

The doctrine of foreign equivalents has evolved into a guideline for courts, rather than an absolute rule. TMEP § 1207.01(b)(vi)(A) states that the doctrine is only applied when the “ordinary American purchaser” would “stop and translate” the foreign wording in a mark into its English equivalent. Here, Australian Leather was unconvincing in its contentions that “ugg” should be considered a generic term under the doctrine of foreign equivalents.

Australian Leather was unable to show that “ugg” is, or ever has been, generic among footwear consumers in the United States. Although Australian Leather provided evidence of how Australians use the word “ugg” could be relevant to consumer perceptions in U.S. commerce, generic usage in another country is not enough on its own to infer generic meaning here.

Furthermore, the court held that Australian Leather’s reliance on the doctrine of foreign equivalents was misplaced, stating that the doctrine is generally used to analyze non-English terms used in the American marketplace, rather than English-to-English comparisons. The court ultimately found generic usage in Australia does not establish a generic meaning in the United States.

It’s easy to see that an analysis of whether a long-standing mark is generic, and thus not protectable by U.S. trademark law, can be complex. When a foreign term and the doctrine of foreign equivalents gets involved — a more frequent occurrence in an increasingly international marketplace — even more issues arise. The advice of legal counsel may have aided in developing a more effective brand strategy for Australian Leather and deterring the infringing use and sales to U.S. consumers by providing the clients with the hard, UGG-ly truth that is.

Posted in: Intellectual Property, Intellectual Property - Trademarks