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Australia Western Sydney ugg boot maker appeals US court ruling in favour of UGG brand owner Deckers

23:26  04 may  2021
23:26  04 may  2021 Source:   msn.com

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a man wearing sunglasses and standing in front of a building: Eddie Oygur wants Australian-made boots to be sold to the world as uggs. (ABC News: John Gunn) © Provided by ABC Business Eddie Oygur wants Australian-made boots to be sold to the world as uggs. (ABC News: John Gunn)

In his Western Sydney warehouse, Eddie Oygur's ugg boots fill floor-to-ceiling shelves, ready to be shipped around the country or picked up by wholesalers.

But it's the sale of a dozen boots that's threatening to bring his business tumbling down.

Sheepskin ugg boots began their life on the feet of Australian surfers but their global popularity has seen them more recently worn by Hollywood celebrities.

In 2019,  a district court in Chicago found Mr Oygur had infringed trademarks of Deckers Outdoor Corporation, a US footwear giant, who owns the UGG brand, which sells sheepskin boots globally.

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Now, the Sydney boot maker is taking the legal battle to the next level — his appeal will be heard by a US federal appeals court in Washington DC on Wednesday (US time).

"This is the quintessential David versus Goliath battle," one of Mr Oygur's lawyers, former senator Nick Xenophon said.

"A small, Aussie ugg boot manufacturer who's taking on a multi-billion dollar US corporation.

"It's do or die for my client who has spent everything he owns, everything he's worked for on this case."

In 2016, Deckers sued Mr Oygur and his company Australian Leather, for selling 14 items on his website to US customers — four of which were purchased by Deckers' investigators.

"I was shocked — I just thought it was a generic term in Australia and I was selling on a '.com.au' website," Mr Oygur said.

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"I had no choice but to fight back… If they win, I'll probably lose everything."

In Australia, there are many companies that sell products labelled as ugg boots and Deckers only owns the trademark for its own stylised logo.

But in other markets, including the US and the UK, it has registered the trademark for the term 'UGG'.

A US jury found Australian Leather had willfully infringed trademarks registered to Deckers — UGG and the term 'CARDY' referring to knitted ugg socks.

Mr Oygur was ordered to pay $US450,000 in damages, plus legal fees.

"They effectively have orders against him for $3.5 million," Mr Xenophon said.

The value of the products he sold into the US was only around $2000.

"It's difficult to see how Deckers would be damaged to the point of $US450,000 by the sale of 12 sets of ugg boots into the United States," trademark lawyer Nicole Murdoch said.

'Very high stakes' battle for ugg

In mounting his defence, Mr Oygur's legal team did not deny that he made the sales into the US or that his boots bore the term 'ugg' on their label — instead, they challenged whether Deckers' UGG trademark was valid at all.

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Mr Oygur argued ugg was not only considered generic in Australia, where it is commonly understood to mean sheepskin boots, but also in the US.

His legal team gathered evidence from US surf shop owners who sold ugg boots in the 1960s and 70s, as well as magazine advertisements from the time.

However, Deckers argued that Americans know ugg as a brand name, not a generic term, presenting consumer surveys as evidence.

The judge found that "even assuming the term is generic in Australia, no reasonable jury could conclude that it is generic in the United States."

Mr Oygur and Australian Leather are now appealing on a number of grounds — including that the district court used the wrong legal standard when considering if the term is generic in the US.

They argue that the court used a test that's relevant when a brand name becomes a generic term and not when a term is already generic before the brand name is trademarked.

This is far from the first legal battle over ugg— Deckers has sued a number of boot makers for selling products outside of Australia.

In one case, featured in the documentary The Good, The Bad and The Ugg, American company Koolaburra fought back on similar grounds, arguing the term was generic in the US.

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However, the court ruled in favour of Deckers and Koolaburra did not appeal.

The then-owners sold the brand, which was later purchased by Deckers itself and is now marketed as 'Koolaburra by UGG'.

Mr Xenophon says Mr Oygur's case has now gone further than those before it.

"If he loses it effectively means financial ruin for him. Deckers on the other hand, if they lose this case it means that their ugg trademark is worthless… very high stakes."

Trademark lawyer Nicole Murdoch agrees the consequences could be far-reaching.

"If the appeal succeeds, effectively what will happen is the trademark will no longer be able to be enforced… [Deckers] are fighting for survival of that brand in the largest marketplace on the planet."

In court documents filed ahead of the appeal, Deckers rejected Australian Leather's arguments and referenced a US Supreme Court decision, which found that the domain name Booking.com was not a generic term.

'We have the raw material here'

Eddie Oygur says he's pursued the case this far not only for himself, but in the hopes of reviving the local export industry.

He believes Australian-made ugg boots would be in demand, in comparison to those manufactured in China, for example.

"It would be such a good thing for our economy, imagine all the ugg boot makers in Australia selling their products worldwide," he said.

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"There'd be small ugg boot factories opening up in country towns, employing people. We have the raw material here."

Mr Xenophon said he appealed to the federal government to back the case but did not get any support.

He's argued that the term warrants protection, similar to the way the European Union protects the regional names Champagne and feta.

"Right now a product that is quintessentially Australian can't be sold by Australian companies to anywhere around the world, particularly in the US and European markets, because of this trademark which we say should never have been granted in the first place," Mr Xenophon said.

Online opportunities also open up risks

As online shopping opens up a global market for Australian brands, Ms Murdoch says it also opens up the risk of trademark infringement.

"This is one of the challenges faced by online traders… they can inadvertently infringe a trademark in another jurisdiction, often without even realising it," she said.

Ms Murdoch said Deckers, and others global companies, are likely to continue defending their trademarks in the age of online shopping and digital advertising.

"It's not going to abate at all, at the end of the day, trademark owners will enforce their rights and they will stop smaller traders infringing their rights on platforms such as Facebook, on Instagram, all of the sales platforms which are multi-national platforms."

Deckers has not responded to the ABC's request for comment on the case.

A Deckers website, 'UGG is a Brand', disputes some of the defences raised by Australian boot makers.

"In appropriate circumstances, Deckers takes action against dealers in Australia and elsewhere that are engaged in such deceptive trade practices," the website reads.

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