The Global Battle Over Ugg: Finance Chiefs Need to Tread Carefully
A comprehensive guide to intellectual property litigation, drawn from UGG's trademark dispute
Patrol the extra mile, finance heads, for the story of the multi-billion-dollar war over the "ugg" trademark serves as a crucial lesson - especially in our increasingly risky, IP-driven world. Hang on tight, as we dive into the epic fight for a beloved footwear brand's heritage and name.
Ugg: Born in Down Under
The Ugg boot and its name trace their origins to the sun-soaked shores of Australia. Local surfers and residents sported these sheepskin boots as a practical choice, more so than a fashion statement. The term "ugg" was tossed around to describe these cozy, Aussie footwear treats.
Fast-forward to 1978, where the Ugg shoe and its name made a grand entrance in sunny California. It was none other than the daring Australian surfer and entrepreneur, Brian Smith, who kickstarted the UGG Australia brand, trademarking it in the U.S. in 1985. A decade later, Smith sold his beloved company to Deckers Outdoor Corporation for a cool $14.5 million. From a small-time Aussie label to a billion-dollar global sensation, Deckers transformed UGG and trademarked its name in over 130 countries – a massive feather in its cap as the company's largest acquisition to date. Today, Deckers is a publicly traded powerhouse, boasting a market cap over $16 billion and a portfolio brimming with other footwear brands like HOKA, Sanuk, AHNU, and Teva.
But the Aussie spirit didn't die easily. Local companies like UGG Since 1974, founded by Arthur Springthorpe, refused to back down from making and selling similar boots. The Aussies insisted that "ugg" was a generic term in their home country.
The Spiderweb of Legal Shenanigans
The UGG trademark dispute unfolded into a spectacle, with Springthorpe's grandson, Todd Springthorpe, leading the charge against the global giant. Todd's battle was so fierce he even went viral on TikTok. This year, he made a strategic compromise, allowing the UGG branding to adorn products sold in Australia and New Zealand. However, goods shipped outside these shores will bear the label "Since 1974."
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The Proactive Legal Approach
IP attorneys stress the importance of a proactive legal approach to minimize legal risks and give companies like ours a fighting chance – a must in a landscape where IP governance plays a growing role.
Hector Agdeppa, a partner at Dickinson Wright and an expert in intellectual property law, recommends taking a proactive stance by consulting with legal teams to identify any potential IP risks. Agdeppa believes that prevention is the key to staying on top in a world where legal battles can bend even the sturdiest of companies.
"Like a good doctor who says prevention is the best medicine," Agdeppa advises, "you don't want to wait until you're in the thick of it. By then, resources might be scarce, and you'll be at a disadvantage."
Startup companies, Agdeppa cautions, tend to skimp on IP protection out of financial constraints. "These young players are trying to cut corners, but it's essential to consider the potential consequences," he warns. "Using a provisional patent application might not ensure priority, and failing to protect certain IP elements can leave your business vulnerable to competitors."
Larger enterprises, on the other hand, invest more upfront, building strategic patent portfolios to fortify their market positions. Even if they don't plan to litigate, these portfolios can serve as a bulwark against rivals.
Risk Management for the Win
Agdeppa emphasizes the crucial role our IP attorneys can play in this process. "Understanding the nuances of your business is paramount," he says. "By working closely with our legal team, you can prioritize which IP needs immediate protection and what can wait."
Remember, companies are always strapped for cash, and legal costs often earn the reputation of being an unnecessary line item. But, as Agdeppa puts it, "When more people are involved – especially our IP specialists – they can help prioritize what IP needs immediate protection, and what you can afford to protect."
Justice in the Face of Giants
When the David and Goliath scenario is oh-so-briefly mentioned, the esteemed litigation partner, Steven Stein, at Greenberg Glusker, provides valuable advice for our teams to join the fray with leverage.
1. Choose value-driven counsel. Just because a big-name law firm is involved doesn't guarantee value. Opt for smaller, mid-size firms with equally qualified attorneys who are willing to offer competitive rates and engaging work.
2. Know when you're fighting on principle. Litigation is expensive and lengthy; passion for a cause doesn't always equate to realistic expectations for cost and outcome.
3. Allocate a generous budget. Litigation's unpredictable nature demands a cushion beyond the legal department's initial budget estimate.
4. Pick your battles. Prioritize legal engagement and avoid wasting resources on unnecessary discovery or motions unlikely to change the outcome.
Exit Strategies: When Settling Makes Sense
Both Agdeppa and Stein emphasize that even when a company seems right, settling or walking away may be the smartest financial move. "IP is a deeply personal issue," Agdeppa reminds us. "But emotions can lead you astray. Don't be hasty to fight for every inch; trade-offs can save you significant sums."
Stein concurs, advocating for a pragmatic approach to litigation. "If both parties leave a settlement feeling slightly aggrieved, it's typically a fair deal. Compromise is sometimes the most viable option. For the plaintiff, accepting less than you think you deserve might be smarter than paying even more and getting nothing. For the defendant, you might have to pay more than you feel is fair just to stop the bleeding."
And remember, your team of experts – including us – can help make those tough decisions. "A cool head, free from emotion, can identify the most strategic course of action," says Stein. "Approach the situation financially, not emotionally, and consider ending the conflict before it spirals out of control."
- Finance chiefs must be vigilant, as the UGG trademark dispute demonstrates the potential risks and consequences in an increasingly IP-driven world.
- Todd Springthorpe, a grandson of the founder of UGG Since 1974, has waged a fierce battle against Deckers Outdoor Corporation, the proprietors of the UGG brand, going viral on TikTok in the process.
- IP attorneys, such as Hector Agdeppa from Dickinson Wright, advise a proactive approach to mitigate legal risks, emphasizing consultation with legal teams to identify potential IP risks.
- Startup companies often neglect IP protection due to financial constraints, but Agdeppa warns that failure to protect essential IP elements can leave businesses vulnerable.
- Larger enterprises invest more in building strategic patent portfolios, with these portfolios serving as a shield against competitors.
- Agdeppa emphasizes the importance of prioritizing IP protection with the help of legal teams, suggesting that not all IP requires immediate protection.
- In the realm of litigation, Stephen Stein at Greenberg Glusker offers advice for smaller companies to seek out value-driven counsel, prioritize legal engagements, and allocate a generous budget.
- Stein also suggests that settling or walking away may be the most financially prudent course of action, even when a company appears righteous.
- IP attorneys, including Agdeppa and Stein, can help guide companies in making informed decisions about litigation, emphasizing a pragmatic, financially-focused approach.
