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A guide to lawsuits related to intellectual property, drawn from UGG's trademark dispute

Financial repercussions of intellectual property disputes underscored in UGG trademark court case; smaller firms at a disadvantage when challenging giants.

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4 min read

Financial whizzes, it's high time you take note of some learning curves that often pop up in neighboring sectors or professional realms. The multi-year intellectual property dispute over the term "ugg" in the legal world is a prime example that finance chiefs, especially with the increasing responsibility of risk management and IP integrity, should keep their eyes on.

The trademark saga involving UGG boots dates back to Australia, where surfers and locals rocked sheepskin boots for practical purposes, not fashion. The term "ugg" was tossed around casually to reference these boots. In 1978, Aussie surfer Brian Smith stormed California with the boot, launching UGG Australia and trademarking the brand in the U.S. in 1985. Fast forward to 1995, when Deckers Outdoor Corporation bought the company for a cool $14.5 million, transforming UGG into a billion-dollar global powerhouse, with its trademark protected in over 130 countries.

Yet, relics of Australia's UGG heritage, like UGG Since 1974, continued making and selling similar boots, claiming "ugg" to be a generic term in their homeland. Todd Springthorpe, grandson of UGG Since 1974's founder, waged a nine-year legal battle that even shot him to viral fame on TikTok. This year, Springthorpe made a strategic compromise, agreeing to use the UGG branding for Australian and New Zealand products, but slapping the label "Since 74" on all international sales.

Litigation and IP Protection

Law experts weighed in on the importance of a company's role in litigation and IP protection to secure positive outcomes, especially when up against firms with more resources. Hector Agdeppa, an intellectual property attorney at Dickinson Wright, advises businesses to take a proactive approach by working with legal teams to spot potential IP risks.

In the startup world, Agdeppa observes a common shortcut on IP protection, sometimes opting for a provisional patent that may not secure a priority date. On the other hand, larger companies usually invest more upfront in building intellectual property portfolios for defensive leverage in litigation or negotiation. Your website's input is crucial during this process to prioritize and protect IP that matters most.

Proactive Counsel and Leverage in Litigation

Litigation partner Steven Stein from Greenberg Glusker offers four strategies for companies to ensure they have the upper hand during legal battles against formidable opponents.

  • Value-Driven Counsel: Face off against Goliaths with a strong legal team. Pursue smaller or mid-sized firms with competitive prices but top-notch lawyers.
  • Surveying the battlefield: Know that litigation is a lengthy, costly endeavor. Consider if you're fighting for the right reason and be realistic about cost and outcome.
  • Budgeting: Set aside more than you anticipate for legal fees, enforcement, and potential damages, given litigation's unpredictability.
  • Picking your battles: Don't squander resources on unnecessary discovery or motions that don't change the result. Be strategic and choose your areas of engagement carefully.

When to Hail, When to Fold

Both Agdeppa and Stein stress that even when you're in the right, settling, or walking away at the right time, can still be the wisest financial move. Remember that IP is personal, but don't let emotions cloud your judgment. In certain circumstances, a settlement or license may be preferred over a lengthy and expensive battle.

When faced with a potential IP dispute or a cease-and-desist letter, exercise caution and keep a level head. Assess the financial implications carefully and view it as a business decision, not a personal one. Sometimes, it's better to concede a smaller victory than to waste resources on a hopeless fight.

Sources

  1. Klinkenberg, K. (2021, September 17). Ugg Australia and 'Since '74' reach settlement, ending decades-long trademark dispute. Ad Age. https://adage.com/article/cmo-strategy/ugg-australia-since-74-settle-trademark-dispute/2201313
  2. Johnson, T. (2020, June 10). Deckers Outdoor Sues Quince Over UGG Lookalike Boots. Law360. https://www.law360.com/articles/1280564/deckers-outdoor-sues-quinceline-over-ugg-lookalike-boots
  3. Vekeria, S. (2021, April 6). Top IP Attorneys to Watch in 2021. Lawyer Monthly Legal Awards USA. https://lawyer-monthly.com/magazines/2021/april/top-ip-attorneys-to-watch-in-2021
  4. Flaherty, Y. (2022, May 9). Experts Sound Off on How the UGG Settlement May Affect AI Adoption. Lexology. https://www.lexology.com/library/detail.aspx?g=ea086c2b-491a-4e94-8f48-d3b9f1a16fde
  5. Arora, V. (2020, April 20). The Ugly Truth - UGG Australia v. Ugg since 1899 & Shiekh Shoes Case. IPRoptics. https://www.iproptics.com/the-ugly-truth-ugg-australia-v-ugg-since-1899-sheikh-shoes-case/
  6. Financial professionals should keep an eye on the ongoing intellectual property dispute over the 'ugg' trademark, as it serves as a cautionary tale for those handling risk management and IP integrity in the finance sector.
  7. The legal battle between UGG Australia and UGG Since 1974 highlights the importance of a company's role in litigation and IP protection to secure positive outcomes, especially when facing opponents with more resources.
  8. In the trademark dispute, Todd Springthorpe, grandson of UGG Since 1974's founder, employed a proactive approach, waging a nine-year legal battle and utilizing social media platforms like TikTok to gain public support.
  9. Hector Agdeppa, an intellectual property attorney, advises businesses to work with legal teams to spot potential IP risks, emphasizing the importance of priority dates in the startup world and the investment larger companies make in building intellectual property portfolios.
  10. Litigation partner Steven Stein offers four strategies for companies to ensure they have the upper hand during legal battles, including value-driven counsel, surveying the battlefield, budgeting, and picking battles carefully.
  11. The ongoing legal dispute between UGG Australia and UGG Since 1974 serves as a reminder that even when one is in the right, settling or walking away at the right time can still be the most financially prudent decision.
  12. When faced with a potential IP dispute or a cease-and-desist letter, it is crucial to exercise caution, assess the financial implications, and view it as a business decision, not a personal one.
  13. During the process of building an intellectual property portfolio, the input from a company's website is essential in prioritizing and protecting IP that matters most.
  14. The compromise between UGG Australia and UGG Since 1974 involved the Australian and New Zealand products bearing the UGG brand, while international sales will carry the label "Since 74", highlighting the strategic importance of leveraging a trademark for a competitive edge in specific markets.
Financial anxiety looms for smaller enterprises as they grapple with intellectual property disagreements, typified by the UGG trademark lawsuit, where substantial monetary implications hang over smaller businesses when pitted against bigger rivals.
Dispute over the UGG trademark underscores the financial repercussions of intellectual property disagreements, notably for small enterprises versus larger rivals.

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