Deckers Outdoor Corporation v. Australian Leather Pty Ltd

Filing 219

MEMORANDUM Opinion and Order. Signed by the Honorable Manish S. Shah on 9/13/2018: Deckers's motion for partial summary judgment is granted with respect to Australian Leather's claims based on fraud, generic status, and the foreign equi valents doctrine. The motion as to Australian Leather's damages calculation is denied. Australian Leather's motion is denied. Deckers's motion for summary judgment, 137 , is granted in part, denied in part. Australian Leather's motion, 130 , is denied. [For further detail see attached order.] A status hearing is set for 10/5/18 at 9:30 a.m. Notices mailed. (psm, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DECKERS OUTDOOR CORP.,
Plaintiff/Counter-Defendant,
v.
AUSTRALIAN LEATHER PTY. LTD. and
ADNAN OYGUR a/k/a EDDIE OYGUR,

No. 16 CV 3676
Judge Manish S. Shah

Defendants/CounterPlaintiffs.
MEMORANDUM OPINION AND ORDER
Deckers Outdoor Corp., the company that owns the popular UGG brand, filed
this lawsuit against Australian Leather Pty. Ltd., and its owner, Adnan Oygur,
asserting claims for trademark and design patent infringement, because Australian
Leather sells boots called “ugg boots.” Defendants filed counterclaims and affirmative
defenses, asserting, among other things, that Deckers’s trademarks containing the
word UGG should be canceled or that Deckers should be barred from enforcing them.
Defendants say that ugg is a generic term for a kind of sheepskin boot, one
popularized by Australian surfers in the 1970s, and therefore, Deckers cannot stop
them from calling their boots uggs in the United States.
The parties filed cross-motions for summary judgment on some of defendants’
counterclaims and affirmative defenses. For the reasons discussed below, Deckers’s
motion is granted in part, denied in part, and Australian Leather’s motion is denied.

I.

Legal Standards
Summary judgment is appropriate if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a). A genuine dispute as to any material fact exists
if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
party seeking summary judgment has the burden of establishing that there is no
genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). “The ordinary standards for summary judgment remain unchanged on
cross-motions for summary judgment: we construe all facts and inferences arising
from them in favor of the party against whom the motion under consideration is
made.” Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017). “Cross-motions must
be evaluated together, and the court may not grant summary judgment for either side
unless the admissible evidence as a whole—from both motions—establishes that no
material facts are in dispute.” Bloodworth v. Vill. of Greendale, 475 F. App’x 92, 95
(7th Cir. 2012).
II.

Analysis
Deckers and Australian Leather each move for summary judgment on

Australian Leather’s counterclaims for declaratory judgment that the mark UGG is
unenforceable and for cancellation of Deckers’s trademark registrations. Deckers
moves for summary judgment on Australian Leather’s counterclaims for false
designation of origin, false statements in violation of the Lanham Act, fraudulent

2

procurement of trademark registrations, a violation of the Illinois Uniform Deceptive
Trade Practices Act, and a violation of the Illinois Consumer Fraud and Deceptive
Business Practices Act. Deckers also moves for summary judgment on four of
Australian Leather’s1 affirmative defenses that have overlapping issues with the
subject counterclaims: that ugg is a generic term in the U.S., that it is generic in
Australia, that it should be treated as generic in the U.S. pursuant to the foreign
equivalents doctrine, and that Deckers fraudulently obtained its trademark
registrations.
A.

Generic Status and the Foreign Equivalents Doctrine

A generic term is one which is commonly used as the name or description of a
kind of good. Miller Brewing Co. v. G. Heileman Brewing Co., Inc., 561 F.2d 75, 79
(7th Cir. 1977) (citing William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 528
(1924)). And a generic term “cannot become a trademark under any circumstances.”
Id. Though a federally registered trademark is presumptively valid, 15 U.S.C. § 1115,
if at any time a “registered mark becomes the generic name for the goods or services,”
an affected party can petition to cancel the registration. 15 U.S.C. § 1064(3). In
determining whether a mark has become generic, the “primary significance of the
registered mark to the relevant public rather than the purchaser motivation shall be
the test.” Id. Under the doctrine of foreign equivalents, one cannot obtain a trademark
over a foreign generic word if the trademark designation “would prevent competitors

Because, as relevant here, Australian Leather and Oygur’s affirmative defenses are the
same, I refer to them collectively as Australian Leather.
1

3

from designating a product as what it is in the foreign language their customers know
best.” Otokoyama Co. Ltd. v. Wine of Japan Import, Inc., 175 F.3d 266, 271 (2d Cir.
1999). Australian Leather argues that the term ugg is generic in the United States
both because American surfers understood the term to refer to sheepskin boots
generally and because its generic status in Australia, combined with the foreign
equivalents doctrine, warrants generic status in the United States.2
1.

The UGG Brand

Brian Smith, who was born in Australia and moved to the United States in
1978, founded the sheepskin-boot company known today as UGG. [189] ¶¶ 5, 10.3

Both parties raise objections throughout that relate to the relevance of evidence presented.
Many of these objections stem from the parties’ central disagreement about how to define the
relevant class of purchasers, which matters when considering consumer perceptions to
determine whether the term was generic. For reasons discussed below, I conclude that the
relevant consumer perceptions are those of American footwear consumers generally. For that
reason, evidence from non-surfer consumers is relevant. And though the test centers on
American perceptions, the Australian experience is not irrelevant to that determination. See
G. Heileman Brewing Co. v. Anheuser-Busch, Inc., 873 F.2d 985, 1000 n. 15 (7th Cir. 1989).
Because many early players in the American sheepskin boot business had ties to Australia,
this information provides helpful context. As to the relevant time period, a trademark is
subject to cancellation at any time if it becomes generic. As a result, post-1979—the date
Deckers asserts it first used the UGG trademark—evidence is relevant as well.

2

Bracketed numbers refer to entries on the district court docket. Referenced page numbers
are taken from the CM/ECF header placed at the top of filings, except in the case of citations
to depositions, which use the deposition transcript’s original page number. The facts are
largely taken from plaintiff’s response to defendants’ Local Rule 56.1 statement of facts,
[173], and defendants’ response to plaintiff’s LR 56.1 statement of additional facts, [189],
where the asserted fact and accompanying response are set forth in the same document. Any
document previously filed under seal and referenced in this opinion shall be unsealed; by
October 11, 2018, the parties shall file a joint statement identifying the docket entries for
unsealing or stating a basis for continued secrecy. See Baxter Int’l, Inc. v. Abbott Labs., 297
F.3d 544, 546 (7th Cir. 2002) (“In civil litigation only trade secrets, information covered by a
recognized privilege (such as the attorney-client privilege), and information required by
statute to be maintained in confidence (such as the name of a minor victim of a sexual
assault), is entitled to be kept secret on appeal.”). If any filing remains under seal, the filer
must ensure there is a public version of the document with appropriate redactions.
3

4

Smith owned a pair of sheepskin boots while still living in Australia, and he and
others referred to them generally as ugg4 boots. [173] ¶ 19.5 Once he moved to the
United States, specifically in December 1979, Smith began purchasing boots from an
Australian company, Country Leather, and reselling them in the United States under
the name Country Leather America. [189] ¶ 5; [141] ¶ 7.6 Smith bought six pairs of
sample boots, followed by an additional 500 pairs, which had a sewed-on label that
read, “Country Leather” and a hang tag with the phrase, “Ugg Boots keep you Warm
& Happy.” [214] ¶ 69. Smith knew that another individual had trademarked the term
“Ugh Boots” for sheepskin boots in Australia in the early 1970s. [189] ¶ 12. In early
1980, Smith applied to register UGG as a trademark in the United States, listing
December 28, 1979, as the first-use date. [214] ¶ 70; [189] ¶ 6. The Trademark Office
rejected the application because the mark did not “serve to identify and distinguish
applicant’s goods,” and Smith did not reapply. Id. In April 1980, Smith—on behalf of
UGG Imports—agreed to be the sole agent and distributor for Country Leather’s

I use all capital letters (UGG) when referring to the brand or companies Smith founded. I
use lowercase letters (ugg) when referring to sheepskin boots generally. I stray from this
convention when quoting from an advertisement or other written material to accurately
reflect the content of the cited source, and in those instances, I put the term in quotation
marks.

4

The additional information in Deckers’s response to Australian Leather’s statement of facts
does not refute Australian Leather’s assertion, in violation of LR 56.1, and I disregard it.
5

The parties dispute whether these boots were sold under the UGG brand or trademark. An
invoice refers to the items as “Short UGG Boot” and “Tall UGG Boot.” [154-13] at 53. Viewing
the facts in the light most favorable to Australian Leather, as is necessary when considering
Deckers’s motion for summary judgment, the word may have been used in the generic sense
on this invoice, despite the all-capitals.
6

5

sheepskin products in the U.S. See [141-3] at 3.7 A few years later, Smith made a
third order for about 2,200 pairs of boots. [214] ¶ 69.
In its early years, UGG Imports was just Smith and his partner, Doug Jensen.
[189] ¶ 9. In the first year of business, both Smith and Jensen attempted to sell UGG
footwear to surf and ski shops, as well as shoe stores. Id. Smith visited 50 surf shops
that year, and some shop owners referred to the boots as ugg boots without
prompting. Id. ¶ 10. In a speech, Smith described his first two attempts at selling to
surf-shop owners as follows: “And the first store I walked into, I was super nervous
and really timid, and I open up the bag, and—and the guy goes, ‘Ah, UGG boots, man.
They’re fantastic. . . . I got a pair. Buddy brought them back for me.’ And next store I
went to was, ‘Oh UGG boots. Yeah my buddies have all got those. They swear by
them.’” Id. ¶ 11.8 Smith and Jensen had similar reactions from other shops as well.
[214] ¶ 63. The parties disagree about the extent to which shop owners were familiar
with the term ugg and whether they used it in a generic sense. Viewing the facts in
light most favorable to Australian Leather, some shop owners were familiar with the
term and used it generically, to refer to the style of the boots, and not in reference to
Smith’s company.

The parties dispute whether, as a result of this agreement, Ugg Imports acquired any rights
that Country Leather had in the trademark UGG in the United States by virtue of Country
Leather’s 1979 advertisements in Surfer magazine. Because the letters themselves do not so
provide, see [141-3]; [141-4], I treat this fact as disputed and view it in Australian Leather’s
favor, which is that Ugg Imports did not acquire any rights from those advertisements.
7

When someone spoke of the term it was not clear whether that person was referencing the
spelling ugg, ugh, or ug. Id. ¶ 12.
8

6

In an interview, Smith said that surfers “all knew of UGG in some way before
I even started, and that’s really why I did it. They already had a recognition in the
surf market.” Id. ¶ 64. Though some shop owners and surfers were familiar with the
term, customers generally were not. [189] ¶ 12. In addition to targeting surf and ski
shops, Smith and Jensen sold their products at flea markets, swap meets, farmers
markets, and from Smith’s van. Id. ¶ 9. Smith also attended ski shows in Las Vegas,
where other companies selling sheepskin boots used the word ugg in their company
name. [173] ¶ 51.9
By 1983, UGG Imports had advertised in major national publications such as
Surfer magazine and Action Sport Retailer, received inquiries from over 105 retail
stores, and made 384 separate invoice sales to retailers all over the United States.
[189] ¶ 13. Deckers acquired UGG Holdings (the successor to UGG Imports) and its
UGG trademark in 1995. Id. ¶ 18. After Deckers acquired the UGG brand, it
repositioned it as a luxury brand and sold its products in well-known department
stores and through other third-party retailers, along with its own UGG concept stores
and online. Id. ¶ 19. Deckers spent tens of millions of dollars in advertising
campaigns in fashion magazines during the early 2000s, and media outlets, movies,
and TV shows featured UGG products. Id. ¶¶ 22–26. The brand became a favorite
among celebrities, received various awards, and had over $1 billion in global annual

Smith did not recall seeing the specific company names that Australian Leather asserted,
and he could not recall the date of the ski show, but he did indicate that at the shows he
attended other companies used the word ugg in their names. [161] at 122:15–123:22; [173]
¶ 51.
9

7

sales every year since 2011. Id. ¶¶ 24–26. The UGG product line came to include a
wide range of footwear and apparel for men, women, and children; handbags;
accessories; and home goods. Id. ¶ 20.
2.

Other Sheepskin Boot Retailers

Four Australian boot-suppliers testified about their experiences selling
sheepskin boots to U.S. customers. Id. ¶ 48.10 John Arnold sold sheepskin boots
(which he referred to as ugg boots) in the U.S. in the 1960s and early 1970s, selling
thousands of pairs per week. Id. ¶ 50; [204] ¶ 55. Arnold used the boots as packing
material in his shipments of surfboards. [189] ¶ 51. He sold mostly to surf shops and
did not sell to mainstream footwear shops. Id. Roger Bosley, an Australian who was
in the sheepskin business from 1973–84, traveled to the U.S. in 1979 in hopes of
selling boots, but found Americans were not interested. [189] ¶ 53; [173] ¶ 15; [13621] at 16:23–19:23. A year later, Bosley opened four retail shops in Los Angeles, which
he operated for a little under two years, where he sold sheepskin boots under a
cardboard sign that read “UGG BOOTS.” [189] ¶¶ 54–55; [173] ¶ 50.11 Bosley stated
that ugg had always been a generic term in Australia. [173] ¶ 15; [136-21] at 25:7–

Deckers points out that none of these individuals provided any documentation of the sales
they made. See id. Nonetheless, their assertions are treated as true at the summaryjudgment stage.
10

Deckers notes that Bosley’s company catalog described the boots as “sheepskin footwear”
and did not refer to them as uggs. But Bosley testified that he sold them under a sign labeling
them uggs, and at this stage, because his testimony is favorable to Australian Leather, and
he has personal knowledge of the sign he used, I treat it as true.
11

8

19.12 An Australian sheep slaughterer and tanner, Peter Dorizzi, sold sheepskin boots
to visiting American sailors. [189] ¶ 57. He first attempted selling his boots wholesale
to stores in the U.S. in 1980 but was unsuccessful. Id. In 1983, he sold “probably” 800
pairs at the 1983 America’s Cup and then sold 40–50 leftover pairs in California. Id.
¶ 59. Dorizzi believed that ugg was a generic term and that all manufacturers used
it to describe sheepskin boots. [173] ¶ 13; [136-19] at 40: 2–7. Robert Hayter also tried
to sell sheepskin boots at the 1983 America’s Cup, but was unable to sell many pairs
and was disappointed in the response in America. [189] ¶ 62. According to Hayter,
the term ugg boot “didn’t mean much to [American customers] at all.” Id. ¶ 64.13
Oygur—Australian Leather’s owner—purchased a pair of sheepskin boots as an
eleven-year-old boy in Australia in 1971, and said that back then, everyone called
them ugg boots. [173] ¶ 17.
American surf-shop owners started selling sheepskin boots in their shops in
the late 1960s. Terry McKendree, who owned two surf shops in Jacksonville, Florida
in the late 1960s and early 1970s, imported sheepskin boots from Australia to sell in
his own shops. [189] ¶ 65. McKendree also arranged sales for other U.S. shops. [173]
¶ 49; [136-22] at 34:7–12. He first learned about sheepskin boots during a 1969 trip
to Australia, where surfers wore them to warm their feet after surfing in cold water.

Contrary to Deckers’s objection, Australian Leather’s assertion that Bosley testified that
ugg boots has always been a generic term in Australia is supported by cited testimony. See
[136-21] at 25:7–19.
12

Australian Leather asserts that Hayter testified that the term ugg was generic in
Australia, but the cited testimony does not support this assertion. [173] ¶ 14; [136-20] at
148:5–14. Hayter merely agreed that a document being presented to him stated that ugg was
generic; it does not show that he believed the term was generic. Id.
13

9

[173] ¶ 16; [214] ¶ 53. At that time, people in Australia used the term ugg to describe
the type of boots. Id. The boots McKendree sold were marked “Made in Australia” and
sold out of a bin in his stores labeled “UGG boots.” [189] ¶ 66. At the time he sold the
boots, McKendree considered ugg to be generic. [214] ¶ 58. McKendree placed an ad
in Surfing magazine in the February 1970 issue, advertising “Australian Sandals.”
Id.; [189] ¶ 67. The ad displayed six pieces of footwear, one of which was a sheepskin
boot labeled “UGG BOOT.” [189] ¶ 67. Aside from the ad in Surfing magazine, two
other pre-1979 U.S. advertisements used the term “UGG” or “Ugg” followed by “boot”:
one in a Santa Cruz newspaper (December 1972),14 and one in Surfer magazine
(November and December 1979). Id. ¶ 47.15
Another surf-shop owner, Glen Kennedy, first became familiar with sheepskin
boots on a trip to Australia in 1973—though he did not know if anyone referred to
them as ugg boots. Id. ¶ 70. In the early 1980s, Kennedy began selling them in his
California shop—selling around 80 pairs per year by 1986. Id. ¶ 71. After 1986,
Kennedy bought sheepskin boots from Smith, and sold them under the UGG brand.
Id. ¶ 72. Kennedy had to explain to customers what the boots were for; only the few
customers who had traveled to Australia were familiar with them. Id. Four other
individuals, who worked in different capacities in the footwear industry, ranging from

Deckers raises foundation and hearsay objections to the Santa Cruz newspaper. See [214]
¶ 57. But Deckers asserts, and Australian Leather agrees, that this issue of the newspaper
referenced “UGG BOOTS.” [189] ¶ 47.
14

In addition to the Santa Cruz newspaper, [184-3], Australian Leather also relies on an
Australian phonebook which uses ugg generically, [184-7]; an article which purports to quote
Smith, [184-8]; and a copy of UGG’s webpage, [184-25]. But this evidence was not properly
authenticated, and I do not consider it. See Fed. R. Evid. 901.
15

10

sales clerks to the former CEO of Deckers, consistently surveyed the market and
believed that UGG had always been a brand name. Id. ¶¶ 73–77.
In 1971, Shane Stedman registered UGH-BOOTS as a trademark in Australia
for boots, shoes, and slippers, and in 1982 he registered the mark UGH for boots,
including sheepskin boots, shoes, and slippers. Id. ¶ 79. A one-time professional
surfer from Southern California met Stedman in Australia and ordered a hundred
pairs of the boots from him but was unable to sell them in the U.S. Id. ¶¶ 68–69.
Deckers purchased the UGH-BOOTS trademark in 1996, and both marks remained
on the Australian register until 2006 when they were removed for non-use. Id. ¶ 79.
Defendant Australian Leather, an Australian corporation founded in the
1990s, also manufactured sheepskin boots and labeled them “UGG” boots. [189] ¶ 2,
112; [204] ¶ 23. Adnan Oygur was its sole owner and managing director. [189] ¶ 2.
Australian Leather did not market to the U.S., though it made sales to American
consumers over the internet. Id. ¶ 112. Australian Leather first sold footwear bearing
the UGG mark to the U.S. on October 27, 2014. Id. Its invoices reflected 33 internet
orders for 42 products from American individuals between 2014–16. Id. In addition
to individual sales, American retailers contacted Oygur to inquire about wholesale
purchasing opportunities. Id. ¶ 115.
3.

Consumer Perceptions

The predominant customers of UGG boots were women between the ages 16 to
54. Id. ¶ 20. In 2017, Deckers commissioned a nationwide survey of 600 women in
this age range who had purchased a pair of boots or casual shoes (not including

11

athletic shoes) in the past 12 months or who thought they would in the next 12
months. Id. ¶¶ 33–34. The survey included three brand-name controls and three
generic-name controls, and revealed that 98% of respondents viewed UGG as a brand
name:
Understanding of Various Shoe Names, Among All Survey Respondents
UGG

TOMS

ROCKPORT

ECCO

SLIDE

CLOG

FLATS

(n = 600)

(n = 600)

(n = 600)

(n = 600)

(n = 600)

(n = 600)

(n = 600)

Brand name 

98%

91%

74%

71%

2%

4%

<1%

   Common name 

1

2

2

3

76

94

99

   Other 

0

0

<1

<1

<1

<1

0

   Haven’t 
heard  of  it/  
don’t know 

1

7

23

26

21

2

0

Id. ¶ 33. In addition to the 2017 survey, Deckers commissioned similar surveys in
2004 and 2011. Id. ¶ 34. In 2004, 58% of all respondents understood UGG to be a
brand name and in 2011, 89% of respondents did. Id.
A linguistics professor searched dictionaries and databases—including the
Corpus of Contemporary American English, Google Books, Lexis-Nexis Academic,
and the Newspaper Archive—for two relevant time periods (1970–80 and 2009–15)
for uses of the word ugg. Id. ¶¶ 36–40. None of the sources she looked at revealed that
ugg, ug, or ugh was used generically in the footwear context. Id.16 Another linguist
replicated some of these searches and similarly found no results referring to footwear.

Australian Leather objects to the professor’s methodology, pointing out that one of the
databases did not have entries for the 1970–79 timeframe and she did not know offhand the
amount of material some of the databases contained for the given timeframes. See [189] ¶ 40.
These objections implicate the weight of the evidence and do not refute the underlying
asserted fact that those searches returned no relevant results.
16

12

Id. ¶ 41. A footwear historian was asked: from 1969–84, “what terminology was used
in the United States by the footwear trade and American public for footwear made in
whole or in part of sheepskin,” and “what was the primary significance of the term
‘UGG’ in the American footwear trade and among the American public?” Id. ¶ 43.
After conducting his own research and considering the catalogs and materials
provided to him, this historian concluded that neither the word ugg, nor any variation
of that spelling, was used “as a generic term by the general consuming public or the
footwear trade in the U.S.” Id. The historian testified it was possible that a “tiny little
group of surfers in Southern California” knew about the term ugg apart from the
brand, but noted that “[t]his small group of surfers . . . doesn’t talk about the entire
country,” which was the focus of his inquiry. [214] ¶ 67; [184-10] at 108:3–12. Prior
to UGG-brand advertisements from 1979 and the early 1980s, he concluded, ugg had
no significance in the footwear trade or among American consumers. [189] ¶ 43.
The Complete Footwear Dictionary, which identifies 110 types of boots and has
been described as the “most widely used and authoritative general book on the subject
of footwear,” does not mention uggs. Id. ¶ 44. Other footwear companies and articles
published in the U.S. in the 1970s used terms like sheepskin, lambskin, lambswool,
shearling, and genuine shearling wool fleece, to describe similar boots. Id. ¶¶ 45–46.
Deckers’s competitors continued to use similar terms to describe their products into
2018. [204] ¶ 6.
Australian Leather relies on a declaration and exhibits submitted during an
Australian Trade Marks Office proceeding called Deckers Outdoor Corp. v. B&B

13

McDougall. [136-2]. The exhibits attached to the declaration include Australian
telephone books, advertisements, and dictionaries using the term ugg. But the
declaration itself fails to comport with 28 U.S.C. § 1746(1) and is inadmissible
hearsay. As a result, the exhibits are not properly authenticated, and I do not consider
them. See Fed. R. Evid. 901. In any event, as discussed below, even assuming
Australian Leather established that ugg was generic in Australia, in part by offering
these phone books, ads, and dictionaries, it has not linked that finding in any way to
consumer perceptions in the U.S. and so considering this evidence would not change
the result here.
4.

Generic Status

Australian Leather has not shown that ugg is, or ever has been, generic among
footwear customers in the U.S—the relevant public. Australian Leather argues that
the word ugg was generic among American surfers in the 1970s, but there is no reason
to construe the relevant public so narrowly. Sheepskin boots are not a specialized
technology that appeals only to some limited consumer base. See Nartron Corp. v.
STMicroelectronics, Inc., 305 F.3d 397, 406 (6th Cir. 2002). Though many early
customers were surfers, anyone can purchase and wear boots (as evidenced by the
shift in UGG’s consumer-base over time). To show that ugg is generic, Australian
Leather relies on the statements from a handful of American surfers and surf-shop
owners; testimony from Australian manufacturers who sold boots in the U.S.
(including statements from Smith); and a few advertisements. It points to no
additional evidence, surveys or otherwise, of consumer perceptions. Crediting this

14

evidence and drawing inferences in Australian Leather’s favor demonstrates that
some individuals used ugg generically in the past. But this is not enough to justify
the conclusion that American footwear purchasers generally view ugg as a generic
term. Based on Deckers’s survey evidence and expert testimony—which revealed no
generic uses of ugg in any dictionaries or databases and showed that 98% of
consumers interviewed thought ugg was a brand—no reasonable factfinder could
conclude that ugg is or ever was a generic word for sheepskin boots in the U.S.
Looking to the Australian experience does not alter this outcome. Although
evidence of how Australians used the word ugg could be relevant to consumer
perceptions in the U.S., generic usage in Australia is not enough on its own to infer
generic meaning in the United States. See G. Heileman Brewing, 873 F.2d at 1000 n.
15. The foreign-equivalents doctrine does not dictate a different analysis. See id.
(citing Duncan F. Duncan, Inc. v. Royal Tops Mfg. Co., Inc., 343 F.2d 655, 661–62
(7th Cir. 1965), and noting that the generic status of “yo-yo” in the Philippines was
not dispositive of trademark status in the United States). First, the doctrine is not a
perfect fit for English to English, and is generally used to analyze non-English terms
used in the American marketplace. 2 McCarthy on Trademarks and Unfair
Competition § 12:41 (5th ed.) (“Under the doctrine of foreign equivalents, a word
commonly used in another language as the generic name of a product cannot be
imported into the United States and be transformed into a valid trademark. Generic
names in languages other than English have often been held to be generic for the

15

American trade.”) (emphasis added).17 Second, as applied here, the doctrine is simply
an expression of the prohibition on allowing a trademark to monopolize a generic
term. Australian Leather has evidence that ugg is generic in Australia, but there is
no evidence that Americans familiar with Australian usage (or Australian visitors to
the United States) would be misled into thinking that there is only one brand of uggstyle sheepskin boots available in this country. Australian Leather needed to come
forward with some evidence that would allow a jury to conclude that the term ugg
has a generic meaning to buyers in the United States; its Australian and surf-shop
evidence does not suffice.
Australian Leather, through expert testimony from an intellectual property
professor at Monash University in Australia, also attempts to introduce evidence
regarding the legal status of ugg in Australia. Australian Leather retained the
professor to report on whether the word ugg (or minor variations of that term) is
generic in Australia for sheepskin footwear. Deckers argues that the report is
inadmissible because the legal status of ugg in Australia is irrelevant and that the
professor’s testimony is inadmissible under Rule 702 and Daubert. Deckers also notes
that whether the term was generic in Australia in the past is outside of the scope of
the report; the professor focused his analysis on the current legal status of the term.
“In determining foreign law, the court may consider any relevant material or source,
including testimony, whether or not submitted by a party or admissible under the

See UGG Holdings, Inc. v. Severn, No. CV04-1137-JFW FMOX, 2005 WL 5887187,
at *6 (C.D. Cal. Feb. 23, 2005).

17

16

Federal Rules of Evidence.” Fed. R. Civ. P. 44.1. But the legal status of the term in
Australia is irrelevant,18 and the legal expert is not qualified to testify about
consumer perceptions. As a result, I do not consider the report in deciding these
motions.
Even assuming the term is generic in Australia, no reasonable jury could
conclude that it is generic in the United States.
B.

Fraud on the Patent and Trademark Office

Australian Leather argues that Deckers’s predecessor fraudulently acquired
its trademark in an UGG ram logo, asserting both a counterclaim seeking damages
caused by that fraud and an affirmative defense.19 See 15 U.S.C. §§ 1115(b)(1); 1120
(“Any person who shall procure registration in the Patent and Trademark Office of a
mark by a false or fraudulent declaration or representation . . . shall be liable in a
civil action by any person injured thereby for any damages sustained in consequence
thereof.”). Fraud in procuring a trademark “occurs when an applicant knowingly
makes false, material representations of fact in connection with an application.”
Metro Traffic Control, Inc. v. Shadow Network, Inc., 104 F.3d 336, 340 (Fed. Cir.
1997). A plaintiff alleging that a trademark was obtained though fraudulent means
must demonstrate fraud with clear and convincing evidence. Money Store v.

For this reason, I also disregard asserted facts about trademark law in Australia generally
and about the legal status of the word ugg in Australia. [173] ¶¶ 18, 20–28; [204] ¶¶ 3–4, 9–
12. See also footnote 2 above.
18

In its response to Deckers’s motion for summary judgment, Australian Leather waived any
fraud claims in connection with all trademark applications aside from the ’992 application.
[181] at 27.
19

17

Harriscorp Finance, Inc., 689 F.2d 666, 670 (7th Cir. 1982). A mistake in an
application is insufficient. Id. at 678. Heightened burdens of proof, such as the clearand-convincing-evidence standard, should be considered at the summary-judgment
stage. Anderson, 477 U.S. at 255.
In December 1985, UGG Imports applied to register the following logo with the
U.S. Patent and Trademark Office:

[189] ¶ 88. In the application, Smith declared that he believed the corporation to be
the owner of the mark and that no other person had the right to use the mark. Id. He
initially listed the date of first use as December 28, 1979, but later amended that date
to June 1983. Id. ¶ 89.20 Carl Brown, the attorney for UGG Imports who prosecuted
the trademark, spoke with a Trademark Examining Attorney regarding the
application. Id. ¶ 91. Jody Drake, a former trademark examining attorney testified
that an examiner would be required to ask the applicant “[d]oes the term ‘UGG’ have
any meaning in a relevant trade or industry.” [184-17] at 84:1–25. Drake concluded
that because the examining attorney reviewing UGG’s application wrote “[t]here is
no significance,” Brown must have answered that there was no meaning in the

Australian Leather notes that Deckers amended the first-use date after resolving a
trademark lawsuit and argues Smith lied to gain an advantage in that litigation. For reasons
discussed below, whether Smith lied in this application is irrelevant.

20

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relevant industry. Id. Brown testified that during that conversation, the examining
attorney asked him whether ugg “had any meaning in the sheepskin business as a
grade or the like.” Id. ¶ 91; [154-16] at 13:19–24. According to Brown, he replied that
he didn’t think so in the U.S., but that he thought ugg was used to identify sheepskin
boots in Australia. [189] ¶ 91; [154-16] at 13:25–14:3. The UGG ram logo trademark
registered in 1987 as U.S. Trademark Registration No. 1,460,992. [189] ¶ 90; [173]
¶ 30. Deckers did not renew the ’992 registration, and it expired in 2008. [189] ¶ 90.
Australian Leather alleges that both Smith and Brown made material
misrepresentations in this application. Australian Leather asserts that Smith
purposefully gave the wrong first-use date to gain an advantage in a separate lawsuit
and lied when saying his company had the exclusive right to the mark when he knew
the word ugg was generic. Brown lied to the examining attorney, Australian Leather
asserts, when saying ugg had no significance in the relevant industry.21 But because
the ’992 trademark expired in 2008—six years before Australian Leather’s entry into
the U.S. market—Australian Leather has failed to establish that it sustained any
damages from Deckers’s alleged fraud. See 15 U.S.C. § 1120.
Australian Leather argues that had Brown (both parties focus on Brown’s
statements) told the truth in the application, and disclosed that ugg was a generic
term in Australia, the examining attorney would have placed a disclaimer on the

As evidence that Brown made this statement knowing it was false, Australian Leather
points to a supposedly contradictory statement Brown made in a deposition for the Severn
lawsuit and to Drake’s expert testimony that Brown must have told the examining attorney
there was no relevant meaning to the term in the industry to have the trademark issued
without a disclaimer attached to the word UGG.
21

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word UGG in the mark, which would have signaled the mark’s generic status in
future applications and prevented UGG from obtaining a trademark in the word
itself. Australian Leather’s theory is inconsistent with the law. Even assuming that
with full disclosure, the examining attorney would have attached a disclaimer to
UGG in the ram logo, it does not follow that the word ugg is generic. And because it
is not generic to the relevant consumers in the U.S., Deckers may rightfully own its
subsequent trademarks. Australian Leather cannot attribute any harm it has
suffered from Deckers’s ownership rights to the ’992 trademark as opposed to any
other. And even if all Deckers’s trademark registrations were subject to cancellation
based on fraudulent procurement, it would still have its common-law ownership
rights. See Specialized Seating, Inc. v. Greenwich Industries, 616 F.3d 722, 728 (7th
Cir. 2010) (holding that cancellation of a trademark’s registration does not “affect the
mark’s validity, because a trademark need not be registered to be enforceable”). Any
damages Australian Leather suffered from Deckers’s trademarks cannot be
attributed to any fraud associated with the ’992 trademark, and without damages,
Australian Leather’s counterclaim fails.
Deckers does not allege that Australian Leather violated the ’992 trademark
(nor could it, since the mark has expired), so the alleged fraud would not be an
affirmative defense to the claims in this case. See 15 U.S.C. § 1115(b)(1) (providing
that a plaintiff’s right to use a registered mark is subject to the defense that “the
registration or the incontestable right to use the mark was obtained fraudulently.”

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(emphasis added)). Any fraudulent procurement of the ’992 mark had no impact on
Australian Leather, and so it cannot recover for that fraud or use it as a defense.
C.

False Designation of Origin

Australian Leather alleges that Deckers falsely represents that its boots are
made in Australia in violation of the Lanham Act, the Illinois Uniform Deceptive
Practices Act, and the Illinois Consumer Fraud Act. To prevail on a claim under any
of these theories, a plaintiff must show that the defendant made a deceptive or
misleading statement. 15 U.S.C. § 1125; 815 ILCS 510/2; 815 ILCS 505/2.
From 1979–85, UGG Imports manufactured all its footwear in Australia. [189]
¶ 99. It began sourcing some footwear through a New Zealand factory in the late
1980s, though most UGG footwear sold through 1995 was made in Australia. Id. As
the brand grew, UGG moved its manufacturing to China, Vietnam, and elsewhere,
though it continued to source most of its sheepskin from Australia. Id. While Deckers
has continually marketed its footwear reflecting the brand’s Australian heritage, it
also expanded its product line to include non-heritage products, and in 2015, Deckers
rebranded from UGG Australia to UGG. Id. ¶ 21.
Australian Leather argues that it is deceptive to use the slogan UGG Australia
when the boots are not manufactured in Australia, but Deckers accurately labels the
inside of each pair of boots with the country of manufacture. Id. ¶ 98. And at least in
recent years, Deckers has displayed country of origin labeling on all footwear boxes
and on its website. Id. When determining whether a statement is deceptive or
misleading, a court considers the statement in context, viewing the product as a

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whole. See Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d 241, 250–51
(3rd Cir. 2011). The UGG Australia label does not state that the boots were made in
Australia. And because every pair of boots with that label also contains a more
specific country of origin label, no reasonable juror could conclude that Deckers
deceptively marketed its boots as being made in Australia.
D.

False Statements on Ugg’s Website

Australian Leather also alleges that Deckers made false or misleading
statements about Australian Leather on the UGG website in violation of the Lanham
Act, 15 U.S.C. § 1125. On its website, Deckers educated other retailers and consumers
about its rights in the UGG brand and trademark and maintained an anticounterfeiting education page. [189] ¶ 32. The website also contained a search
function which allowed consumers to look-up online retailers to see if they were
authorized dealers of UGG-brand products. Id. ¶ 107. If the tool did not recognize the
searched term as an authorized dealer, it generated the message: “[the searched
term] isn’t known to our database and cannot be verified as an authorized retailer.
This may be a site that deals in counterfeit products.” Id. Deckers maintained another
webpage titled “UGG® is a Brand,” which contained information about the UGH
trademark in Australia and stated that “[s]ome Australian companies . . . otherwise
circulate misinformation regarding the UGG mark.” See [214] ¶ 83. None of Deckers’s
counterfeit-education webpages mentioned Australian Leather. [189] ¶ 105.
Australian Leather argues that the search function results misrepresent that
it deals in counterfeit products. But when a customer types “Australian Leather” into

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the site, the tracker generates the same form message that it would for any
unrecognized term. Australian Leather also asserts that the information explaining
the dangers of counterfeit goods misleads consumers by improperly linking
Australian Leather to those dangers. But Deckers never mentions Australian
Leather by name, and there is no reason that a consumer would conclude that those
statements were about Australian Leather. Further, for the reasons discussed, it is
not false or misleading for Deckers to say that the word ugg is not generic in the U.S.
Because the statements Australian Leather points to were not false, and because they
do not mention Australian Leather, Australian Leather cannot prevail on its fraud
claims.
E.

Unclean Hands

Australian Leather asserts that Deckers should be barred by the doctrine of
unclean hands from enforcing its trademarks based on its predecessor’s abuse of the
® symbol. Deckers owns eleven U.S. trademark registrations that contain the UGG
mark. [189] ¶ 94. In May 1996, UGG (at that point UGG Holdings) received a U.S.
Trademark Registration for the text word UGG for footwear and other goods. [173]
¶ 31. Though it did not own a trademark in the word UGG before 1996, id. ¶ 32; [1361] ¶¶ 123–26, Smith and his companies used the ® symbol next to the word UGG in
various advertisements and documents. [173] ¶¶ 33–48.22 Smith considered his
trademark to be for UGG and thought he was legally required to use the ® symbol

Deckers raises objections about some of these examples, disputing whether the purported
publication date is accurate. It does not deny, however, that it used the ® symbol before 1996.
See [173] ¶¶ 33, 36, 39, 41–47.
22

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next to it. [204] ¶ 26. To Smith’s knowledge, none of his companies received a
complaint about improper use of the ® symbol. Id. ¶ 27. Based on this testimony,
Deckers disputes that the alleged misconduct was willful.
Australian Leather uses the ® symbol next to its name as well, and it has never
applied for a trademark registration. [204] ¶¶ 28–29. Deckers argues that Australian
Leather’s own misuse precludes it from relying on the unclean-hands doctrine. See
Leo Feist, Inc. v. Young, 138 F.2d 972, 975 (7th Cir. 1943) (discussing the doctrine of
unclean hands and noting that “if the defendant has been guilty of conduct more
unconscionable and unworthy than that of the plaintiff, the rule may be relaxed”).
Because there are genuine disputes of material facts as to the requisite intent and
the degree of culpability of both parties, summary judgment is inappropriate.
F.

Damages

Australian Leather estimates, relying on Oygur’s calculations, that if Deckers
did not own or enforce its trademarks, Australian Leather would have sold 75,000
pairs of boots (60,000 short boots and 15,000 long boots) annually to wholesalers in
the United States from 2008–16. [189] ¶ 111; [154-11] at 78. He also estimates the
wholesale prices for which Australian Leather could have sold those boots to
American retailers. Id. Oygur bases these estimates on his own experiences; he did
not do any test sales, studies, or surveys to determine the American demand for the
product. [189] ¶ 113. While the accuracy and precision of Oygur’s calculations may be
questioned, they are based on his personal knowledge of the industry and not so
speculative as to entitle Deckers to summary judgment on the issue.

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III.

Conclusion
Deckers’s motion for partial summary judgment is granted with respect to

Australian Leather’s claims based on fraud, generic status, and the foreign
equivalents doctrine. The motion as to Australian Leather’s damages calculation is
denied. Australian Leather’s motion is denied. Deckers’s motion for summary
judgment, [137], is granted in part, denied in part. Australian Leather’s motion,
[130], is denied.

ENTER:
___________________________
Manish S. Shah
United States District Judge

Date: September 13, 2018

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