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When it comes to trademarks, Goliath is not always the bad guy

On Behalf of | Oct 4, 2022 | Intellectual Property, Intellectual Property Litigation, Trademarks

Trademarks provide intellectual property protection for the business or individual that holds the trademark. There are rules that guide what can and cannot get these protections and the protections only work when the holder decides to exercise their rights. Sometimes, the trademark holder wins — other times not.

One of the rules that guides trademark protection involves the use of words. Certain words cannot receive trademark protections. Two examples include:

  • Doctrine of geographical equivalent. The law generally does not allow one to trademark a word that is the foreign version of a generally accepted term. A common example is an attempt to trademark the word leche.
  • Geographic indication. Another rule about trademarks and word use involves geographic indication, like champagne only coming from the Champagne region of France.

Although the above examples are clearly established, there are other instances that are more questionable. In a recent example, a goliath of a retail company sued a man out of Australia for selling Ugg boots in the United States. In the US we recognize the term “Ugg” as a specific brand of boots but in Australia it is a general term that refers to all sheep skin boots, much like flip flop is tied to a type of sandal. The man’s shop sold fourteen boots from its online store out of Australia to customers in the U.S. The owner of the Ugg trademark here in the US, Deckers Outdoor, took action to protect the trademark. When the Australian refused to respect the trademark, Deckers took him to court ultimately winning $450,000.

Why go after a small operation out of Australia? Without this action, Deckers could have lost the trademark rights for a brand they spent decades to build and any company in the US could potentially start selling “Uggs”.

Although the case involves a goliath in the retail industry, three important lessons that impact any business with intellectual property (IP) rights include:

  • Be wary of internet sales. The internet can help you expand your customer base, but that can mean you are subject to rules in other states or even countries.
  • Trademarks require active protection. Filing for trademark protection is not the end. The owner needs to actively protect these rights or else loose them.
  • Goliath is not always the bad guy. In this case, if the trademark holder had not exercised their rights, they could have lost their trademark.

The large award above highlights the need to take IP rights seriously. It is important to act appropriately whether looking to exercise IP rights or defend against allegations of a violation. This can include seeking legal counsel for guidance.