UGG mark owner successful in application for summary judgment

In Deckers Outdoor Corporation Inc v Farley (No 2) ([2009] FCA 256, March 24 2009), the Federal Court of Australia has entered summary judgment in favour of Deckers Outdoor Corporation Inc in proceedings brought against multiple respondents for infringement of Deckers' registered UGG mark.

Deckers is the owner of the figurative trademark UGG (Registration 785466) for “footwear, including boots, shoes and clogs” (Deckers also claimed ownership of the word mark UGG (Registration 1077762), but elected not to press claims for infringement of this mark if it succeeded in relation to the figurative mark). Deckers alleged that the six respondents had infringed (or been a joint tortfeasor in the infringement of) the UGG mark by importing, manufacturing, selling and/or distributing footwear, boxes, leaflets and pamphlets bearing the mark.

Deckers applied for summary judgment against the respondents under Section 31A of the Federal Court of Australia Act 1976 (Cth) for:

• trademark infringement;
• copyright infringement;
• passing off; and
• breaches of the Fair Trading Act 1999 (Vic) and the Trade Practices Act 1974 (Cth).

The respondents argued that the marks appearing on the allegedly counterfeit products could not be substantially identical or deceptively similar to the UGG mark as the three elements of that mark (the words 'ugg' and 'Australia', as well as a sun device) did not all appear together on the boots or the associated materials. The court disagreed, emphasizing the need to consider all surrounding circumstances, including how the marks were used and the goods were bought and sold, and the characteristics of potential purchasers of the footwear (See Registrar of Trademarks v Woolworths Ltd).

The court also noted that:

• the word 'Ugg' appeared above the word 'Australia' in various places;
• the word 'Ugg' and the sun device were embossed on the soles of the boots; and
• the word 'Australia' appeared in lower case under the UGG mark (in capitals, with the middle 'G' larger than the other two letters).

Overall, the court concluded that "[a] consumer examining the boots and the boxes would not see any element of the registered trademark in isolation".

Because the respondents had taken the essential features of the mark, the court was: 

"in no doubt that there exists a real likelihood of confusion and deception as to the provenance of the boots. There is a remarkable visual similarity between the lettering and other parts of the registered trademark and the marks used by the respondents. The impression created, and [...] intended to be created, is that the boots were manufactured by Deckers, the owner of the registered trademark."

This impression was intentionally cemented by the use of the symbol ® next to the word 'Ugg'.

The respondents also claimed that the UGG mark had wrongly remained on the Trademark Register at the time of the alleged infringements and that it should be cancelled under Subsection 88(1)(a) of the Trademarks Act 1995 (Cth) (for various reasons argued in cross-claims). This argument could succeed only if the court made orders cancelling the registration and those orders operated retrospectively. Applying E & J Gallo Winery v Lion Nathan Pty Limited (No 2), the court held that the cancellation of a trademark registration should operate only prospectively (for further details about the Gallo decision please see "Lion Nathan gets its claws out in BAREFOOT Case"). Were the position otherwise, "the integrity of the Register would be compromised" and the legislature would have expressly stated that the provisions should operate retrospectively if it intended for them to have that effect.

The court thus entered judgment for Deckers for the trademark infringement claim, Deckers having shown that the respondents had "no reasonable prospect of successfully defending the proceeding or [a] part of the proceeding” under Section 31A(1)(b) of the Federal Court of Australia Act. The court declined to make a declaration sought by Deckers that the respondents were liable to pay damages in respect of the trademark infringement, as evidence as to the damage suffered was not specifically directed to this infringement (Deckers could, at trial, call such evidence and seek compensatory orders). The court also rejected Deckers' application for summary judgment with respect to its claims of copyright infringement, passing off and breaches of trade practices law.

Deckers is no stranger to disputes over its UGG marks. For the past decade it has been involved in legal tussles with Australian sheepskin business owners over whether it has the right to monopolize the Ugg name (also spelt 'Ugh' and 'Ug'). Ugg boots have a history in Australia tracing back to as early as the 1920s. Since then, a number of Australian companies have manufactured the boots and called them 'uggs', assuming the word to be a generic descriptor of a type of shoe rather than a brand name.

David Yates and Marina Lloyd Jones, Allens Arthur Robinson, Sydney