Deckers Outdoor Corporation

Coordinates: 34°25′59″N 119°49′52″W / 34.4330°N 119.8312°W / 34.4330; -119.8312 Deckers Outdoor Corporation (NASDAQ: DECK) is a footwear manufacturer based in Goleta, California, United States. It began in 1973 as a sandal producer, run by Doug Otto.^[1] Deckers currently manufactures six brands, Teva, UGG Australia, Simple Shoes, Sanuk, Tsubo, Ahnu and Mozo.^[2]

Teva

A pair of Teva sport sandals

Mark Thatcher was the inventor of Teva (pronounced "teh-vah" not "tee-vah"^[3][4], and comes from the hebrew word for "nature"). While working as a rafting guide in 1982 he noticed the lack of proper shoes for river activities. Sneakers would become heavy when wet and would take days to dry and thongs would slide off feet very easily.

Thatcher fashioned a thong-style sandal with nylon ankle strapping, thus creating the first sport sandal. Thatcher patented his invention, found a manufacturer and began selling the "amphibious utility sandals" by himself, selling 200 pairs the first year. Although it was effective watersports footwear, it proved less effective for regular sports as the first Teva users often complained of blisters between the first and second toe caused by the thong-style strapping system. However, the following year a sudden high demand of Teva sandals arose as young Americans found the sandal highly fashionable.^[5]

A partnership was established between Thatcher and Deckers Outdoor Corp. Deckers eventually got exclusive rights to Teva including patent #4,793,075 for the basic design and a trademark for the brand name. The sandal was redesigned, creating the Universal Strapping System. The first model was called "Hurricane" and is the basis of all Teva sandals.

On November 25, 2002, Deckers acquired the worldwide Teva patents, trademarks and other assets from Mark Thatcher. After this transfer, Teva continued to grow under the supervision of the Deckers Outdoor Corporation.

Construction

Diagram of patent describing the product.

The basic model consists of a 2-layer sole: The inner sole is softer and serves as the footbed, most of the models come with arch support and Microban Zinc, a technology that prevents odor and kills bacteria.

The outer sole is harder and is formulated to have a good grip on wet surfaces.

The Universal strapping system consists of 3 parts:

• The toe post: a strap that goes on the frontal part of the sandal, across the toes and in between the inner and outer sole.
• The heel strap: Goes around the ankle to prevent the sandal from sliding off.
• The side strap: Connects the toes post and the heel strap on the outer side of the sandal, this prevents the sandal from stretching in awkward positions where injury could occur.

Each strap is connected to the others by triangular "rings" where each strap goes around one side of the ring.

UGG Australia

The UGG Australia brand is known for its ugg boots, a sheepskin upper with a wool inner lining and a tanned outer surface worn by men and women. Surfing which helped popularise the boots outside of Australia and New Zealand, when surfer Brian Smith started selling the boots in the US through Ugg Holdings, Inc. in 1979.^[6] Uggs have been identified as a fashion trend since the early 2000s in the United States, with celebrities such as Kate Hudson, Sarah Jessica Parker and Pamela Anderson wearing them.^[7][8] Pamela Anderson renounced ugg boots in 2007 upon realising that they were made from animal skin.^[8][9][10]

Trademark Dispute

UGG Australia is a registered trademark in the US, Europe and many other countries. There have been various disputes within Australia, the United States and Europe about the validity of Ugh/ugg trademark. Deckers trades as Ugg Holdings Inc in Australia,^[11] where it is known for a trademark dispute over the use of the term Ugg boot.^[12]

In 1971, Australian surfer Shane Steadman, began selling ugg boots and registered the name Ugh-boots as a trademark in Australia.^[13] In 1979 Brian Smith, another Australian surfer, brought several pairs of Australian-made sheepskin boots to the US and began selling them in New York and California. ^[14] He set up Ugg Holdings Inc., acquired the Australian mark from Steadman, and in 1985 registered a US trademark on a rams head logo with the words "Original UGG Boot UGG Australia. In 1995, he sold his interest to Deckers Outdoor Corporation.^[13] In 1996 Deckers registered a trademark for "UGG" in the US. In 1999, Deckers began asserting its new trademark and sent cease and desist letters to Australian manufacturers, but did not press the issue beyond that.^[13] It was only in the early 2000s when demand for ugg boots was soaring, partly as a result of several celebrity endorsements,^[13] and Australian manufacturers began selling uggs over the Internet, that Deckers' law firm Middletons of Melbourne began a serious effort to halt their sales.^[13] In 2004, Deckers sent cease and desist letters to 20 Australian manufacturers and Mortels Sheepskin Factory was prevented from selling uggs on eBay or from using the word in domain names.^[13]

In response to these actions by Deckers, Australian manufacturers formed the Ugg Boot Footwear Association to fight the corporation's claim, arguing that "ugg" is a generic term referring to flat-heeled, pull-on sheepskin boots. They further argued that Australian manufacturers had been making and trading this style of boot for decades, including in the US. In 2003 Bruce and Bronwyn McDougall, owners of Uggs-N-Rugs, a Western Australia-based manufacturer, started legal action alleging that Deckers had not actively used the UGH-BOOT registration in Australian commerce for the past three years. Their action was successful in 2006, and the UGH-BOOT registration was removed from the Australian Trademark Registry.^[15][13] The officer who heard the case stated that the "evidence overwhelmingly supports the proposition that the terms (ugg, ugh and ug boots) are interchangeably used to describe a specific style of sheepskin boot and are the first and most natural way in which to describe these goods."^[13]

The ruling only applies in Australia with Deckers still owning the trademarks in all other jurisdictions, including the US, China, Japan and the European Union.^[13] In 2005, the validity of the UGG trademark was challenged in Federal Court in California; the court ruled for Deckers, stating that consumers in the United States consider Ugg to be a brand name.^[16] In his final order, the judge hearing the case stated that, although the defendants had provided anecdotal evidence of the term being used generically, Deckers had countered this by "submitted ... declarations from four footwear industry professionals, each of whom states that 'UGG' is widely recognized in the industry as a brand-name and not a generic term" and that the defendants' evidence "fails to demonstrate that the term 'UGG' is generic."^[16] In his finding the judge did not consider whether or not "ugg" was a generic term in Australia or New Zealand, as the doctrine of foreign equivalents only relates to non-English speaking countries.^[16] A similar challenge was also rejected by a Dutch court.^[17]

Counterfeit products

Deckers has also been challenged by the marketing of counterfeit products, principally from China. According to the Glasgow Evening Times in July 2010,

Gangs of criminals have flooded Glasgow with fake footwear. ... Authorities across the west of Scotland have seized hundreds of pairs of the must-have footwear ... Neil Coltart, at Glasgow City Council, said: "These boots come in boxes that look like the real thing, with tags and labels. But the product clearly isn't the quality you'd expecty from Ugg." ... Out of their slick packaging, the boots were clearly not made of Ugg's comfy sheepskin, but a cheap man-made fur. One even had its distinctive Ugg trademark glued on to its heel upside down. Holding up a pair, [Coltart] said: "I think most people would be pretty disappointed if they bought Ugg boots and brought these home."^[18]

In 2009, US customs agents confiscated 60,000 pairs of fake UGG boots, and the company took action against 2500 websites that were selling fraudulent products, as well as some 170,000 listings on eBay, Craigslist and similar sites.^[19][20] Leah Evert-Burks, director of brand protection for Deckers, told The New York Times: "The consumer is blind as to the source of the product ... Counterfeit Web sites go up pretty easily, and counterfeiters will copy our stock photos, the text of our Web site, so it will look and feel like" the Deckers website.^[19]

Simple Shoes

Simple Shoes, also known as Simple, is an American footwear brand which was originally founded by Eric Meyer, a native of Morro Bay, CA. Simple Shoes is known for its use of "green" sustainable materials ^[21] such as bamboo, jute, hemp, recycled PETE, used tires and cork. Simple Shoes also offers vegan (free of any animal products) footwear.^{[citation needed]}

References

1. ^ Deckers Corporate Website
2. ^ Deckers.com
3. ^ "Teva History". Teva.com. teva.com. http://www.teva.com/tribe/theVoice/history.aspx. 
4. ^ "Deakers > Teva > History". Deakers > Teva. Deakers.com. http://www.deckers.com/brands/teva/about.php. 
5. ^ "Inventor of the Week: Archive". MIT. August, 1998. http://web.mit.edu/invent/iow/thatcher.html. Retrieved 2007-03-28. 
6. ^ Marks, Kathy (17 February 2004). "There's no business like shoe business". The Independent (London, United Kingdom). http://www.independent.co.uk/news/world/australasia/theres-no-business-like-shoe-business-570211.html. Retrieved 17 November 2009. 
7. ^ Brown, Suzanne S. (21 December 2003). "Ooh, so comfy, but ugh! so hard to find". Chicago Tribune: p. 7B. 
8. ^ ^{a b} Grant, Sarah (28 February 2007). "Pammy puts the boot into her uggs". Daily Telegraph (Sydney, Australia): p. 3. 
9. ^ Grant, Lorrie (December 10, 2003). UGG Australia boots a fashion kick. USA Today. http://www.usatoday.com/money/industries/retail/2003-12-10-ugg_x.htm. Retrieved 2008-03-14. 
10. ^ Stimpert, Desiree. "Everything You Ever Wanted to Know about Ugg Boots". About.com. http://shoes.about.com/od/boots/a/ugg_boots.htm/. Retrieved 2008-10-31. 
11. ^ Samantha Joseph, "When an Ugg Boot is No Longer an Ugg Boot...", ART+law, Arts Law Centre of Australia, June 2004
12. ^ A Jumping Dog Productions, The Good, The Bad and The Ugg Boot, Australian Broadcasting Corporation, 2006
13. ^ ^{a b c d e f g h i} Kathy Marks (18 January 2006). "Ugg: How a minnow put the boot into a fashion giant". The Independent. http://www.independent.co.uk/news/world/australasia/ugg-how-a-minnow-put-the-boot-into-a-fashion-giant-523444.html. Retrieved 21 May 2010. 
14. ^ Julie Neigher (20 December 2009). "It looks like Ugg love". Los Angeles Times. http://articles.latimes.com/2009/dec/20/image/la-ig-ugg20-2009dec20. Retrieved 19 June 2010. 
15. ^ Decision of a delegate of the Registrar of Trade Marks with reasons published by IP Australia 16 January 2006
16. ^ ^{a b c} Koolaburra Decision
17. ^ "Dutch Decision, December 2008". 1 April 2010. http://www.keepandshare.com/doc/1835726/dutchdecision12-08-pdf-april-1-2010-5-17-pm-5-9-meg?da=y.  (PDF)
18. ^ Leask, David. " 'Fuggs' flood the city's market in fake goods." Glasgow Evening Times, July 31, 2010, p. 9.
19. ^ ^{a b} Clifford, Stephanie. "Economic Indicator: Even Cheaper Knockoffs." The New York Times, July 31, 2010.
20. ^ http://www.brandchannel.com/home/post/2010/08/03/New-Counterfeit-Gambit-Knock-Off-Cheaper-Brands.aspx
21. ^ MSNBC, Fall Head Over Feet For Eco-Friendly Shoes, NBC 11, November 21, 2007

External links

• Deckers Outdoor Corp. - official website