How Ugg Boots Work

While the UGG Australia brand gained a foothold in the U.S. around the turn of the century, an entire mom-and-pop industry in Australia continued to churn out small batches of rustic ugg boots. And that didn't sit well with Deckers Outdoor Corp. executives, who were making diligent efforts to shift the UGG Australia image to one of luxury and refinement. No longer did the company cater indiscriminately to discount retailers and drug stores. Instead, its marketing efforts targeted high-end boutiques and celebrities, all in hope of creating consumer demand [source: Conley].

As part of its brand recognition and expansion strategy, Deckers Outdoor Corp. began purchasing ugg-related trademarks throughout the world and sending out cease-and-desist letters to Australian-based manufacturers of ugg boots, some of which had been in business for decades. It was a move that led to contentious legal battles over trademarks and intellectual property in Australia, which eventually resulted in a favorable ruling for the country's ugg cottage industry: Ugg was deemed a generic term and not a brand name in Australia and New Zealand, and multiple manufacturers have the right call their products uggs, too [source: Australian Sheepskin Association Inc].

Ugg boots made by companies based in Australia and New Zealand, such as Blue Mountains Ugg Boots or Mortels Sheepskin Factory, can be purchased online and shipped to the United States and other countries. And plenty of competing brands produce non-sheepskin boots that mimic the look of uggs. However, some companies attempt to pass these boots off as UGG Australia-brand products to cash in on the company's success.

Deckers Outdoor Corp., which in 2010 garnered 87 percent of its overall revenue from the UGG brand alone, turned its attention to retailers selling counterfeit UGG Australia boots. Although the company owned hundreds of ugg and ugg-related trademarks in more than 100 countries, it faced increasing competition from low-priced knockoffs.

The company claims that with the help of customs agents, attorneys and private investigators, it stops more than 60,000 fake UGGs from making it through U.S. customs each year. Unfortunately, this means some consumers receive, instead of the boots they purchased, a letter from customs officials and Deckers Outdoor Corp. stating that the patent-infringing item they'd ordered had been seized and was slated for destruction. And, because the fakes hadn't been purchased from UGG Australia, they wouldn't be receiving a refund, either [sources: Conley; Kemp].