UGG boot battle

[MikeHunt]

Aussie boot battle takes an Uggly turn

By James Arnold

BBC News Online business reporter

After international trade disputes about everything from plastic bags to shiitake mushrooms, could woolly boots be next?

Just two weeks after Australia and the US signed a landmark trade agreement and proclaimed themselves the firmest of friends, there is a groundswell of anger at the treatment of an "Aussie icon".

The ire focuses on Deckers Outdoor, a Californian company which bought small Australian footwear firm Ugg Holdings in 1995.

No one much minded that Americans were producing Ugg's comfortable but dowdy sheepskin boots; they didn't even gripe when Deckers shifted production to cheaper China.

Getting heavy

But now Ugg boots, thanks to the unguessable alchemy of high fashion, have become a celebrity must-have, and things have turned nasty.

Aggrieved Australian footwear makers complain that Deckers is going to aggressive lengths to safeguard its Ugg trademark, which it acquired for two dozen countries when it bought the firm.

We have no intention of putting anyone out of business. Everybody should be able to sell sheepskin boots if they want to; what we don't want is confused customers

Tom Fitzsimons, Deckers' patent attorney

Tony Mortel, whose family have been making sheepskin boots since 1958, is one of dozens of companies banned from selling on the internet.

"If it's got a U and a G in it, they're after it," he snorts.

According to some reports, the firm even leaned on the publishers of the Macquarie dictionary, standard-setters for Australian English, to reflect Deckers' trademark in its definition of Ugg.

Mr Mortel claims to have lost some 300,000 Australian dollars (£126,000; US$238,000) as a result of the embargo, and says the Australian sheepskin trade is out of pocket to the tune of A$20m.

"We're being railroaded out of our own market share," he says.

Different versions

Hazy history is partly to blame.

The official Deckers line on the Ugg boot is that it was more or less invented by Brian Smith, an Australian surfer, in the 1970s.

Mr Smith had the good sense to trademark the term Ugg, as well as variations such as ug, ugh and so on, and passed those legitimate rights on to Deckers.

I am convinced that we will get this trademark cancelled

Tony Mortel, sheepskin boot maker

Er, not quite, say Deckers' opponents.

No one is absolutely straight on how the boots were invented - surfers, farmers and World War I pilots are all possible culprits - but all agree there has been a tradition of making boots and calling them Uggs since the first half of the 20th century.

They were so familiar a feature of Australian life, the argument goes, that no one thought to trademark the name.

"'Ugg' is a generic term like 'trainers' or 'sneakers'," says Sharryn Jackson, a member of the Australian parliament who has taken up the case of bootmakers in her constituency.

"It defies belief that an Australian icon would be trademarked in the US."

Protecting our good name

Deckers insists it is doing nothing wrong.

"[Deckers] has invested a lot of money and time in the brand, and in order to protect the brand we will try to stop unethical dealers who try to confuse the public as to a product's origins," says Tom Fitzsimons, a trademark lawyer at US law firm Greer, Burns and Crain, who represents the company.

"There has also been a lot of investment in marketing so that people recognise Ugg as a brand.

"We have no intention of putting anyone out of business. Everybody should be able to sell sheepskin boots if they want to; what we don't want is confused customers."

The existence of trademarks dating back to the 1970s in every corner of the globe is a sign, the company insists, that Ugg is by no means a generic term.

Kicking up a fuss

Nonetheless, a campaign is slowly building.

Other MPs have raised the issue, and Ms Jackson says she is trying to put together a lobby group of businesses to force the federal government to take note.

Mr Mortel, meanwhile, has formed the Australian Sheepskin Association, whose campaign - under the rallying cry "Save our Aussie icon" - hopes to attract 50,000 supporters.

Mr Mortel has already failed to win an appeal before the tribunal of ICANN, the body that rules on internet domain names.

But he is pressing on with action aimed at Deckers' original trademark rights.

"I am convinced that we will get this trademark cancelled," he insists.

Bye-bye, Vegemite

The case, if it emerges, promises fireworks.

Cross-border copyright and trademark disputes are among the most treacherous avenues of international law.

In this case, there is the added complication that the trademark under dispute is - like Portakabin, for example, or Hoover - far better known as a word than as a brand.

What might appear a parochial little spat is about pretty big money - sales of Ugg boots have trebled in the past couple of years

And Aussie pride adds spice to the mix.

Everyone involved in the case insists that chauvinism is not the issue, but Australians are becoming increasingly touchy about corporate colonisation.

After a wave of investment in the past few years, iconic Australian brands such as Vegemite, Violet Cumble, Aeroplane Jelly and Kangaroo Matches are now in foreign hands.

At the same time, a host of local firms are polishing their Aussie credentials in an attempt to cash in on the patriotic market.

One website, Ausbuy, gives consumers tips on how to read labels - "Australian made", for example, does not necessarily imply that a product is free of foreign taint.

Wonga

More to the point, what might appear a parochial little spat is about pretty big money.

Sales of Ugg boots have at least trebled in the past couple of years, Tony Mortel reckons; thanks to the patronage of Kylie Minogue, Gwyneth Paltrow and others, prices in the fanciest European markets can top 300 euros a pair.

Deckers, which reckons it will sell US$45m-worth of Ugg products this year, thanks the boots for a tenfold increase in its share price since the beginning of last year.

At the end of January, it announced plans to expand the brand into handbags and other leather goods.

With such wonga on offer, it's hardly surprising that Australian firms - to use the vernacular - want a fair suck of the sav.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/3495511.stm