When American consumers hear the term UGG, do they associate that term with UGG brand boots or with any sheepskin boots? That, in essence, is the question presented to the United States District Court for the Northern District of Illinois last week.
As trademark lawyers everywhere know, “generic” terms do not qualify for trademark protection under the Lanham Act. The name of a product or service itself cannot function as a trademark because it does not identify and distinguish the goods or services of one seller from other sellers. Generic, non-protectable terms include, for example: Computer (for the sale of computers), Telephone (for the sale of telephones), Apple (for the sale of apples, but not computers!), Caterpillar (for the sale of butterfly larva, but not tractors!) and Plant (for the sale of plants).
Certain marks may once have been legally protected trademarks that subsequently lost their protection as trademarks because the marks entered the public domain by becoming generic terms through public usage. The maker of the “Murphy Bed,” for example, lost its trademark protection because the term Murphy bed, in the eyes of a substantial majority of the public, refers to a bed that falls into a wall enclosure, not to the specific bed sold by the Murphy Door Bed Company. Another example is “Escalator,” which originally was a trademark of Otis Elevator Company, but lost its trademark status in the United States as a generic term for a moving staircase.
Last week, an Illinois federal court judge ruled that UGG is not a generic term for sheepskin boots and that the United States owner of the popular UGG brand, Deckers Outdoor Corporation, can pursue its claims for trademark and design patent infringement against a company called Australian Leather. Among other rulings on the parties’ cross-motions for summary judgment, the court rejected Australian Leather’s argument that “ugg boots” is a generic term that refers to sheepskin boots popularized in Australia.
According to Australian Leather, UGG is a generic term in Australia; and therefore under the “foreign equivalents doctrine,” the court should have held that UGG also is a generic term in the United States. The court noted, however, that the relevant class of purchasers is American consumers, not Australian ones. In the court’s 25-page opinion, it considered evidence of sales, testimony by Australian and American boot-suppliers, as well as consumer perceptions in a nationwide survey conducted by Deckers, among other evidence. In the end, the court held that although evidence of how Australians use the word UGG could be relevant to consumer perceptions in the United States, generic usage in Australia alone is not enough to infer “generic meaning” in the United States.
If the court had accepted Australian Leather’s argument, that decision could have had a significant detrimental effect on the UGG trademark owner, who had over $1 billion in global annual sales every year since 2011.
The lesson to take away from this case is that the owner of a popular brand MUST take steps to police its trademark to ensure that the term does not “enter the public domain” and become generic through public usage. In other words, brand owners must be vigilant and enforce their trademark rights, or risk suffering a similar fate to the Murphy Door Bed Company.