Monday, August 16, 2004

Looting Australian Culture

From The Sydney Morning Herald

Putting the boot in

It's the stretch that makes sheepskin so hard to work with, reflects Bronwyn McDougall, who sits with her daughter stitching thousands of pairs of "genuine Australian" ugg boots each year. "Ugg boots are not made on fancy machines. They are virtually a cottage industry. Sheepskin is very variable and needs the human touch," says the 60-year-old. Her husband, Bruce, mans the glue pot to hand-lay soles in an old suburban house-cum-workshop in Kenwick, Western Australia.

Long relegated to somewhere under Australian beds as scruffy suburban slipper wear, the ugg boot will emerge in an entirely new light this winter. Department stores are stocking embroidered, lace-trimmed and pastel versions of the woolly stompers, which are now worn by teenage girls, knee-high. A Myer fashion buyer, Karen Brewster, says: "It will be a key look this winter, worn with mini-skirts and jeans. We have expanded our range dramatically."
The ugg's new cachet is being driven by the the way the boots have been adopted as street fashion overseas. But millions of dollars in sales have brought Australia's "cottage industry" into collision with the hard-headed world of international fashion.

The McDougalls started their family business Uggs-n-Rugs 26 years ago, selling ugg boots at a farmers' market stall. In 1996 they were among the first wave of small businesses to venture online. International sales through their website were steady and mostly to men.

That suddenly changed three years ago, when the ugg began stepping out on celebrity legs. Madonna, Brad Pitt and Oprah Winfrey led the Hollywood charge. By the next northern winter the craze had spread, with British model Kate Moss and Sex in the City's Sarah Jessica Parker among those now sporting Ugg Australia boots made by an American footwear company, Deckers, which was trading on the legend of Australian surf culture.

All of a sudden, young American women were hitting the internet en masse in search of Australian sheepskin ugg boots, and small businesses like the McDougalls' were at the centre of an international fashion boom.

The online demand reached fever pitch three months ago when Deckers ran out. Bidding on auction websites for the then rare Ugg Australia boots (carrying the not-so-ocker titles "Fluff Momma" and "Sundance") topped $US500 (about $650).

From his Sheepskin Factory in Maitland, NSW, Tony Mortel began offering an alternative, "Australian-made ugg boots from Mortels", and sold hundreds on Ebay for up to $US250 before being suddenly kicked off. Ebay said it was barring Mortel - whose father began making ugg boots in 1958 - because Deckers had claimed trademark infringement.

According to the American company, there was only one "ugg boot", and it was theirs.

It was the opening salvo in a legal assault that was soon to see Deckers hire lawyers in Australia to target another 20 small businesses, firing off letters in December demanding they stop any reference to the term "ugg".

The McDougalls were told to give up their Uggs-n-Ruggs business name and trademark. In Dubbo, a charity employing 65 intellectually disabled workers that does not sell ugg boots online but has a factory shop called the "Westhaven Ugg Boot Shop", was ordered by Deckers to hand over all price lists, brochures and labels containing the words "ugg", "ug" or "ugh".

Tony Watson, a partner with Middletons, the law firm acting for Deckers, says the company acquired the Australian trademark to "ugh boot" from Australian Shane Stedman, who had registered the term in 1971. Deckers had purchased the Ugg Australia company in 1995 from another Australian, the California-based surfer Brian Smith. In 1999 it registered Ugg Australia as another Australian trademark.

Ugg mania in the US saw Deckers rake in a record $US37 million last year as sales of its boots leapt 55 per cent. Watson readily admits the Australian legal action has been spurred by Deckers' concern about lost sales.

"It is quite staggering the demand in the US and Europe, and definitely around Christmas-time Americans were having a lot of difficulty getting my client's product," he says. "Americans type 'ugg' into a search engine and are getting hold of Australian retailers who have cottoned on to the idea. American consumers only know the product as my client's, and are disappointed when they don't get my client's product."

To overcome supply problems, Watson says, Deckers are now sourcing boots from China. The fact that Deckers is seeking to shut down use of the term "ugg" in Australia, when its boots are no longer even made here, has outraged the local sheepskin industry, which also points out that it is impossible to buy an Ugg Australia product in this country.

Small ugg boot makers have rallied together, and are fighting back with plans for a class action and political agitation under the banner "Save our Aussie Icon".

Gordon Tindall, manager of the charity group Westhaven, says: "We have said 'bugger this - we own the name'. It is Australian."

Tindall says the term ugg boot is as generic as sausage or beer. Westhaven, which sells about 25,000 pairs each year in Australia and the US, has correspondence showing it has been using the term ugg for 30 years. "We believe the word is a variation of the word ugly," he says.

The McDougalls and Tony Mortel have separately lodged applications with the government trademark regulator, IP Australia, disputing Deckers' right to "ugh" and "ugh-boots". They argue that since Ugg Australia doesn't sell its products in Australia, and has never marketed them here, the trademark is invalid. IP Australia is obliged to consider the applications, and a court-like hearing in which both parties will be required to give evidence will take place later this year.



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