In Deckers Outdoor Corp. vs. Australian Leather Pty. Ltd., the US District Court in Illinois addressed the issue of whether a term found to be generic in Australia should compel the conclusion that such term is generic in the US, and whether the doctrine of foreign equivalents should apply to a term used in another English-speaking country.

Deckers, the owner of the UGG brand, had filed a complaint against Australian Leather, asserting claims for trademark infringement, among other things, based on Australian Leather's sale of boots which it called "ugg boots.” In response, Australian Leather claimed that "ugg" was a generic term for a kind of sheepskin boot which had been popularized by Australian surfers in the 1970s and, therefore, Deckers' trademark registrations for the UGG mark should be cancelled and Deckers barred from preventing third parties from calling their boots "uggs.” Each of the parties filed cross-motions for summary judgment.

•The crux of Australian Leather's argument was that the term "ugg" is generic in Australia and should be treated as generic in the US pursuant to the doctrine of foreign equivalents.

•The court, however, held that even if Australian Leather could establish that the term "ugg" was generic in Australia, it was not able to link that finding to consumer perceptions in the US which, in the case at hand, was the relevant public. The court noted that "although evidence of how Australians use the term ‘ugg’ could be relevant to consumer perception in the US, generic usage is not enough on its own to infer generic meaning in the US." Even if the court were to assume that the term "ugg" was generic in Australia, there was no evidence that it was generic in the US.

Australian Leather further asserted that the term "ugg" was generic among American surfers in the 1970s. In response, the court held that such a claim was not supported by any evidence and, even if it were, there was no reason to construe the relevant public so narrowly, since "sheepskin boots are not a specialized technology that appeals only to some limited consumer base."

The court held that the application of the doctrine of foreign equivalents suggested by Australian Leather was not correct. The court indicated that the doctrine of foreign equivalents provides that "a word commonly used in another language as the generic name of a product cannot be imported into the US and be transformed into a valid trademark." Firstly, the court held that the doctrine is used to analyze the use of non-English terms in the marketplace and not a term from another English-speaking country. Secondly, the doctrine serves as a prohibition on allowing a trademark to monopolize a generic term, and Australian Leather was not able to provide evidence that either Americans are familiar with the Australian usage of the term "ugg" or that Australian visitors to the US "would be misled into thinking that there is only one brand of ugg-style sheepskin boots available in this country."

Ultimately, a court in the US will look to the US marketplace and US consumer perception as determinative.