Background

Luda Production’s use of UGG AUSTRALIA

In 1981, Russian immigrants, Luda and Roman Fishman, the founders of Luda Production’s UGG AUSTRALIA business, began making and selling at the Queen Victoria Market in Melbourne sheepskin products. They incorporated Luda Production Pty Ltd (Luda Production) in 1984 to take over the business. The business continues to be run today by Luda and Roman and their daughter Lena.

Since 1982, the Fishman’s have branded their products UGG AUSTRALIA. The mark was initially embossed into the heel of the sheepskin boots, but was subsequently replaced with woven heel counters featuring the UGG AUSTRALIA mark. From 1986, swing tags featuring the UGG AUSTRALIA mark were attached to all products.

Luda Production’s UGG AUSTRALIA branding has evolved over the years, with various stylisations and formats used. However, at all times, the branding has featured the words UGG AUSTRALIA. Some of the formats include:

  • UGG AUSTRALIA
  • ‘UGG’ AUSTRALIA
  • UGG AUSTRALIA PTY LTD
  • MADE BY ‘UGG’ AUSTRALIA
  • MADE BY UGG AUSTRALIA.

During the 1980s Luda Fishman sought to protect the UGG AUSTRALIA mark. She attended the Trade Mark Office, completed a trade mark application form, but the application was not filed on advice by the counter clerk not to proceed because the mark was ‘descriptive’. In 2004, after a demand was received from Deckers Outdoor Corporation Inc (Deckers), Luda Production applied for the following trade mark applications:

Click here to view the trademark/s.

By that time, the Luda Production’s UGG AUSTRALIA sheepskin boots business was substantial. The Fishman family is committed to remaining true to its UGG AUSTRALIA heritage. It is the only remaining sheepskin boot business in Australia to tan sheepskins locally. All manufacturing is also carried out in Australia from Luda Production’s Brunswick factory. Luda Production’s estimates its UGG AUSTRALIA products currently enjoy 75% market share of sheepskin boots in Australia.

Deckers Outdoor Corporation’s use of UGG AUSTRALIA

Deckers’ connection with its ‘UGG Australia’ brand trace to a business started by Brian Smith in Australia in around 1979. Brian Smith began importing into the USA sheepskin boots made in Australia. Mr Smith operated the business under various names including UGG Imports, Inc., UGG America, Inc., UGG International, Inc., and UGG Holdings, Inc.

Smith’s business began using a trade mark incorporating the words ‘UGG Australia’ from about 1983. Initially, the mark was applied to the goods only after they had reached the USA, but later the mark was applied to the goods prior to export from Australia.

Smith’s ‘UGG Australia’ branding has also evolved over the years. The initial mark included the graphic of a ram’s head and this is the form in which the mark was first registered in the United States in 1987.

Deckers acquired Smith’s business in 1995. Deckers also continued to modify the ‘UGG Australia’ logo and in 1999 obtained the first Australian registration (no 785466) for the ‘UGG Australia’ mark, which was in a stylised form and included the graphic of a sun. By 2007, Deckers’ annual worldwide sales of ‘UGG Australia’ sheepskin footwear was approximately AU$300 million worldwide.

The dispute

In August 2004 Luda Production applied to register the following trade marks in class 25 for footwear and sheepskin boots among other things:

  • UGG AUSTRALIA PTY LTD logo (no 1013798)
  • MADE BY UGG AUSTRALIA logo (no 1013807), and
  • MADE BY UGG AUSTRALIA (no 1013806).

Deckers opposed all three applications on a number of grounds.

The decision

Substantially identical

Click here to view the trademark/s.

The Delegate held that Luda Production’s UGG AUSTRALIA marks are each substantially identical to Deckers’ 1999 registered mark, finding that the essential feature each mark is ‘UGG AUSTRALIA’. According to Delegate Alison Windsor, the additional material in each of the trade marks is secondary, resulting in a total impression of resemblance.

Ultimately dismissing all of the ground of opposition raised by the opponent, the Delegate found as follows:

Prior use

The Delegate rejected Deckers’ argument that their 1999 registration anticipated the Opposed Marks. Deckers argued that the prior use shown by Luda Production at the examination stage was invalid as it demonstrated use of a similar mark only, and not an exact copy of the mark for which registration was sought. The Delegate rejected this construction of prior use and found that the Registrar has discretion to consider use of slight variations of a trade mark as valid trade mark use. The Delegate found that Luda Production had the earliest use in Australia of a trade mark comprising the term ‘UGG AUSTRALIA’ as its essential feature dating back to as early as 1982. This finding disposed of Deckers’ objections and prior use allegations under sections 44, 58 and 58A.

Ms Windsor’s finding of Luda Production’s first use of UGG AUSTRALIA is set out in paragraphs 61, 69 and 71 of her decision. In the words of Ms Windsor (para 69 of the Decision) ‘I am satisfied that it is more likely than not that the applicant has the earliest use of the term ‘UGG Australia’ in trade within Australia in respect of the goods relevant to this matter. I am not satisfied that the opponent has demonstrated use which meets the requirements of section 58A.’

Reputation

Deckers submitted that its evidence of manufacture and export of footwear bearing the ‘UGG Australia’ logo, its evidence of sales and worldwide promotions amounted to a significant reputation in Australia of its ‘UGG Australia’ trade marks. The Delegate rejected this argument, finding that Deckers’ evidence of sales and reputation overseas were insufficient to establish a reputation in the Australian domestic footwear market. This finding disposed of Deckers’ objections raised under sections 60, 42(b) and section 43.

Bad faith

The Delegate found that Luda Production’s history of use of UGG AUSTRALIA in Australia over 22 years prior to the filing of the applications indicated that its applications were not filed in bad faith, but in order to gain statutory protection for trade marks which already had a reputation in Australia.

Decision

The Delegate ordered that the applications proceed to registration.

On 11 October 2010, Deckers appealed the Delegate’s decision to the Federal Court of Australia. The Federal Court is expected to hear the case in late 2011.