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June & July 2014
Legislation
There was no new legislation introduced.
Litigation
Louis Vuitton Malletier, S.A. v. 2013lvshop.com, 2014 U.S. Dist. LEXIS 103291 (S.D. Fla. July 29, 2014). Synopsis: Federal district court grants Louis Vuitton a temporary restraining order and a domain name transfer order against dozens of websites purveying counterfeit Louis Vuitton products.
Tovey v. Nike Inc., 2014 U.S. Dist. LEXIS 93901 (N.D. Ohio July 10, 2014). Synopsis: Federal district court dismisses case in which plaintiff claimed that Nike's 2010 "Boom" footwear advertising campaign infringed upon his "Boom Yo!" trademark.
Gravity Defyer Corp. v. Under Armour, 2014 U.S. Dist. LEXIS 108669 (C.D. Cal. July 7, 2014). Synopsis: Federal district court denies Under Armour's motion to dismiss, finding that a trial is the appropriate place to decide whether Under Armour's "Micro G Defy" shoes violate plaintiff's trademark for "G Defy" shoes.
Coach, Inc. v. Weng, 2014 U.S. Dist. LEXIS 79005 (S.D.N.Y June 7, 2014). Synopsis: Federal district court grants Coach statutory damages and a permanent injunction, despite defendant store-owners' claim that, as uneducated immigrants, they were unaware of the concept of trademark protection.
USPTO
Utility patents issued in the months of June and July:
Pat. No. Entity Title 8,789,292 LaCrosse Footwear Footwear assemblies with reinforced insole 8,789,293 Nike, Inc. Differential-stiffness impact-attenuation members 8,789,294 Nike, Inc. Contoured fluid chamber with tensile structures 8,789,295 Wolverine World Wide Footwear and related method of manufacture 8,789,296 Nike, Inc. Self-adjusting studs 8,789,297 Doyle, Sean Disposable shoe cover for bowling 8,789,298 Nike, Inc. Article of footwear with ball control portion 8,782,924 Nike, Inc. Footwear with framework-chamber sole structure 8,782,925 Jennus Athletics Company Athletic shoe 8,782,926 Kabushiki Kaisha Kurebu Footwear having a lacing system 8,782,927 Red Wing Shoe Company Footwear tensioning system 8,782,928 Nike, Inc. Footwear with power kick plate 8,782,929 Taicher, Don Shoe outsole with cut-out heel region 8,789,253 Kilgore, Bruce J. Footwear including replaceable outsole members 8,782,814 Jibbitz, LLC System for securing accessories to clothing 8,778,251 Sakurai Sports Mfg. Co. Apparatus for making one-piece shoe shells 8,777,191 Spike Inc. Energy absorption and distribution material 8,776,403 Nike, Inc. Article of footwear with multiple cleat systems 8,776,402 RTC3 LLC Ankle inversion and eversion prevention shoe 8,776,401 Nike, Inc. Flex groove sole assembly with biasing structure 8,776,400 Nike, Inc. Flex groove sole assembly with biasing structure 8,776,399 Fusco Industrial Corp. Shoe insole 8,776,398 Summer Soles, LLC Absorbent footwear liner 8,776,397 Salomon S.A.S. Footwear with improved bottom assembly 8,776,396 Huynh, Chi Beach sandal 8,772,410 DuPont Polyolefin foams for footwear foam applications 8,769,846 Williams, Vernon Boot having skin-exfoliating means therein 8,769,845 Lin, Shu-Hua Shoe conveniently put on and taken off 8,769,844 Nike, Inc. Automatic lacing system 8,769,843 Nike, Inc. Article of footwear with two part midsole assembly 8,769,774 Nike, Inc. Belt and/or buckle assembly 8,769,751 Softspikes, LLC Method of attaching a traction cleat to receptacle 8,763,279 DashAmerica, Inc. Bicycling shoe and bicycling shoe components 8,763,278 Plantiga Technologies, Inc. Footwear assembly with integral footbed suspension 8,763,277 Stonefly S.p.A Footwear with shock absorbing sole 8,763,276 Nike, Inc. Removable outsole elements for articles of footwear 8,763,275 Shalom, Mor Talia Foldable footwear 8,763,210 GV Snowshoes (CA) Locking device for a buckle 8,758,273 University of Utah Devices for monitoring under foot load profile of patient 8,758,272 University of Utah Devices for monitoring load profile of tibial fracture patient 8,758,207 APOS-Medical and Sports Proprioceptive/kinesthetic apparatus and method 8,756,993 Commissariat a l'Energie Atomique Shoe and apparatus provided with inertial tracking device 8,756,836 Rylo, Inc. Foot support 8,756,835 Strong, Finn Alexander Footwear having air-controlled active element 8,756,834 Heart and Sole USA, LLC Cushioned athletic cleat 8,756,833 Nike, Inc. Lacing closure system for an object 8,756,832 Nike, Inc. Article of footwear with multi-layered support assembly 8,756,831 Nike, Inc. Article of footwear 8,753,734 Ballet Makers, Inc. Tap for dance shoe 8,753,275 BioSensics LLC Device to monitor patients with footwear, walking aids 8,752,310 Smith, III, Roy Robert Internally illuminated footwear component 8,752,309 Stash Sporting Goods, Inc. Storage device for shoelace 8,752,308 Strong, Finn Alexander Footwear having air-controlled active element 8,752,307 Nike, Inc. Article of footwear with a midsole structure 8,752,306 Athletic Propulsion Labs Shoes, devices for shoes, and methods of using shoes 8,747,340 Nike, Inc. Ankle and foot support system 8,745,901 Nike, Inc. Article of footwear with tongue and heel openings 8,745,900 Speedplay, Inc. Aerodynamic bicycle shoe cover and pedal cover 8,745,899 Nike, Inc. Article of footwear including a sizing system 8,745,898 Sport Maska Inc. Skate boot with improved flexibility 8,745,897 LaCrosse Footwear, Inc. Traction enhancing devices for footwear assemblies 8,745,896 Nike, Inc. Footwear having an upper incorporating a knitted component 8,745,895 Nike, Inc. Footwear having flat knit upper construction 8,745,894 Spenco Medical Corp. Triple density gel insole 8,745,893 Gavrieli Brands LLC Split-sole footwear 8,745,892 Geox S.p.A. Waterproof and breathable sole for shoes 8,740,757 FioRito, Daniel P. Exercise attachment for a shoe and method of use 8,739,435 Salomon S.A.S. Footwear with improved sole assembly 8,739,434 Bishop, Felicia Hwang Footwear with toe aligner structure 8,784,939 Pics on Kicks, LLC System for printing customized graphics on footwear 8,769,750 Solemate AB Boot machine-device 8,755,925 Nike, Inc. Automated identification and assembly of shoe parts 8,747,593 Nike, Inc. Methods for making fluid chambers with spacer textiles
Patent applications published in the months of June and July:
Pub. App. No. Entity Title 20140208620 Damodar, Aashika Flat-to-Heel Convertible Outsole 20140208619 ExxonMobil Chemical Sole Comprising a Propylene-Based Elastomer 20140208618 Reuben, Ronie Article of Footwear 20140208617 Nike, Inc. Removable Spat for a Shoe 20140208616 Deckers Outdoor Footwear including Removable, Replaceable Liner 20140208615 Nikki Beans, LLC Elastic Closure for Footwear 20140208614 Wasp Pro Pads Inc. Comfort-Enhancing Footwear Insert 20140208613 Barr, Erik Rigid Shoe Insert with Raised Heel 20140208612 Nike, Inc. Sole with Portions that Cooperatively Define Chamber 20140208611 Titan Industries et al Composite Insole and Bottom Assembly 20140208610 Nike, Inc. Sole with Portions that Cooperatively Define Chamber 20140202045 Kindle Hill, LLC Universal Heeled Shoe Protector 20140202044 Nike, Inc. Ultralightweight Adaptive Heel Member 20140202043 Nike, Inc. Article of Footwear with Tongue Having Holes 20140202042 Nike, Inc. Cleated Footwear 20140202041 Kupferberg, Anthony Shoe with a Printed Design And Printing Process 20140202040 Easton Sports, Inc. Hockey Skate 20140202039 Red Wing Shoe Molded Insole For Welted Footwear 20140202038 Turner, Fredrick C. Shoe with Inserts 20140202037 Cross, Adam Paul Adhesive Protective Covering 20140202036 Ishikawa, Atsuhiro Footwear for Exercise 20140202035 Goldmill Enterprises Waterproof Footwear Covering, Carrier Bag 20140202034 Nike, Inc. Anti-Stretch Treatment of Leather for Footwear 20140202033 Nike, Inc. Protective Member For An Article Of Footwear 20140202032 Alas, Angelica Shoe Comfort Strap Devices 20140202031 Seo, Woo Seung Sole with Shock Absorption, Rebound Elasticity 20140202030 Uei Long Enterprise Co. Flip-Flop 20140196321 High State Industry Co. Waterproof and Breathable Shoe 20140196320 Sure Foot Corp. Anti-Slip Overshoe with Flexible Cleats 20140196319 Rupprecht, Gabriela High-Heeled Shoe 20140196318 Verheem, Johann B. Footwear with Interchangeable Electronic Faces 20140196317 Ektio Inc. Athletic Shoe 20140196316 Nike, Inc. Article of Footwear Incorporating Braided Tensile Strands 20140196315 Nike, Inc. Spacer Textile Material with Intersecting Tensile Strands 20140196314 Nike, Inc. Spacer Textile Material with Tensile Strands 20140196313 Nike, Inc. Easy Access Articles of Footwear 20140196312 Shimano Inc. Lacing Cord and Shoes Using the Same 20140196311 Nike, Inc. Spacer Textile Material with Channels, Tensile Strands 20140196310 Nike, Inc. Spacer Textile Material Non-Linear Tensile Strands 20140196309 G-Form, LLC Vibration and Pressure Reducing Cycling Shoe Innersole 20140196308 Nike, Inc. Footwear Formed with Gas-filled Pockets or Chambers 20140196307 Fremming, James Device for Coupling a Shoe Upper and Shoe Sole 20140196306 Innover Limited Foot Protector 20140190042 Scolari, Nathan Shoe with Resilient Heel 20140190041 Wu, Yu-Te Shoe Sole 20140190040 Yang, Ya-Chi Elastic Structure And Shoe Thereof 20140190039 DM3, Inc. Expandable Footwear for Children 20140190038 Stratten, Ronald James Weighted Shoe Insole and Method for Making the Same 20140189964 Jen Yuan Plastics Co. Shoes of Automated Process Production 20140182171 Modine, Matthew Athletic Footwear with Toe Protection 20140182170 New Balance Customized Footwear 20140182169 Mack, Michael Articles of Footwear Having Lines of Flexion 20140182168 Nike, Inc. Interchangeable Insert System With Sleeve Member 20140182167 Nike, Inc. Article Of Footwear Having Adjustable Sole Structure 20140182166 Anatomic Research, Inc. Midsole Structures with Computer-Controlled Pressure 20140182165 Lee, Byung Hun Sole with Ventilation Function, Double-Landing Function 20140182164 Krupenkin, Thomas Apparatus For Regulating Footwear Temperature 20140182163 Krupenkin, Thomas Apparatus For Providing Internal Heating Of Footwear 20140182162 Footbalance System Oy Insole with Heating Element 20140182049 Raft Global, LLC Cushion Items with Flexible Contouring 20140180460 Seiler, Brock Maxwell Vibrating Footwear Device and Entertainment System 20140174969 Wright, Ronald Maceo Disposable Footwear 20140174205 SmartMove, Inc. Insole for Measuring Information from Foot of a User 20140173945 Lin, Kou-Bin Footbed and Method for Making the Same 20140173944 Edison Nation LLC Fastener for Childrens Footwear 20140173943 Nike, Inc. Article of Footwear for Soccer 20140173942 Terry Electronics (S.Z) Light-Emitting Shoe 20140173941 Ariat International, Inc. Footwear with Expandable Entry and Exit Feaure 20140173940 DM Systems, Inc. Heel-Suspending Protective Boot 20140173939 Nike, Inc. Article of Footwear for Snowboarding 20140173938 Nike, Inc. Footwear with Harness and Fluid-filled Chamber 20140173936 Nike, Inc. Color Change System for Footwear 20140173935 Sabbioni, Luca Upper with Perforated Sole for Ventilated Bottoms 20140173934 Nike, Inc. Woven Planar Footwear Upper 20140173933 Nike, Inc. Woven Footwear Upper With A Lockout Assembly 20140173932 Nike, Inc. Woven Footwear Upper With Lockout 20140173931 Kruglov, Sergey V. Adjustable Spring Device for Walking and Running 20140171895 Kimberley-Clark Laminate and Process For Making Same 20140165429 5.11, Inc. Footwear Patch for Identifying Blood Type 20140165428 Freschi, Christian Shoe Having Improved Cushioning and Propulsion 20140165427 Nike, Inc. Electronically Controlled Bladder Assembly 20140165426 Chapin, Lisalyn Convertible Footwear 20140165425 Byam, Monique Shoe to Boot Conversion System 20140165424 Pearl Izumi USA, Inc. Adjustable Sole Support System 20140165423 Pride Manufacturing Co. Traction Cleat and Receptacle 20140165422 W. L. Gore Monofilament Footwear Lining 20140162048 Cal Tech Multi-Layer Liquid-Diode Fabric and Products 20140157632 Kim, Jill Illuminated Shoe 20140157631 Pinwrest Development Footwear Impact Distribution 20140157630 Gemmen, Greg Footwear Device 20140157629 Nike, Inc. Footwear Incorporating Floating Tensile Strands 20140157628 Nike, Inc. Linked Articles 20140157627 Nike, Inc. Article Of Footwear With Adjustable Stiffness 20140157626 Bell Sports, Inc. Controlled Release Buckle 20140157625 Nike, Inc. Article With Adjustable Stiffness Tongue 20140157624 Salomon S.A.S. Covering Device for an Article of Footwear 20140157623 Nike, Inc. Upper Bonded with Inner and Outer Reinforcing Strips 20140150301 Jennings, Richard Boot Wear Protector 20140150300 Salomon S.A.S. Adaptable Sports Footwear 20140150299 Entler, Therese Leigh Canine Protective Boot 20140150298 SR Holdings, LLC Articles of Footwear 20140150297 Nike, Inc. Article of Footwear 20140150296 Nike, Inc. Footwear with Knitted Component with a Tongue 20140150295 Nike, Inc. Footwear with Flat Knit Upper Construction 20140150294 Nike, Inc. Article Of Footwear Having A Textile Upper 20140150293 Millar, David J. Mine Resistant Combat Boot, Blast Mitigating 20140150292 Nike, Inc. Article Of Footwear Incorporating A Knitted Component 20140150291 Larsen, Scot K. Impact Resistant Running Shoe Insert 20140150290 Yang, Sai-Wei Walking Device for Patient with Knee Osteoarthritis 20140150289 Williams, Shayla Reusable Shoe Cover 20140150170 Applied FT Composite Variably-Tensed Composite Cushioning Material 20140189965 Nike, Inc. Footwear with Slots and Method of Making 20140182069 Tsai, Yin-Hua Method for Forming a Shoe Vamp Integrally 20140174205 SmartMove, Inc. Insole for Measuring Information from Foot 20140173837 Ka Shek Lee, Neville Method for Sole for Bending-Actuated Aerated Footwear 20140165304 Nike, Inc. Footwear with Foam-Filled Elements
Design patents issued in the months of June and July:
Pat. No. Entity Title D709,676 Strategia Societa Ornamental design for a shoe D709,677 Crocs, Inc. Ornamental design for footwear D709,678 J. Choo Limited Ornamental design for footwear D709,679 Winskowicz, Robert Ornamental design for a shoe sole D709,680 adidas AG Ornamental design for a shoe D709,681 Nike, Inc. Shoe Midsole D709,682 Taylor Made Golf Golf shoe outsole D709,683 Sookdeo, Lolita Shoe heel D709,684 Montrail Corporation Footwear D709,685 Sorel Corporation Footwear D709,686 J. Choo Limited Footwear
Trademarks published in the months of June and July:
BLICHÉ SETH MORRISON PERSIAN BEAST EMPIRE LLC CLEANER BRIGHTER SOURCE360 SOCAL OVERLAND BRAIN MATTER CLOTHING ALEEZA YOUNG CHAMPIONS CHEER AMERICA TIME FOR S-MOTION TECHNOLOGY SOLVANG SUNSMILE HEATLIFER CRUISE CLUB HECKANASTY PRONOIA PREGNANT NOT POWERLESS LD PUCK ROCKER SSLR MOXEAY SVN BY ALEXANDRA FANSEDGE BUZZWORTHY CHASINGJESUS SAN ANTONIO SHOEMAKERS SAS LANDFILL DZINE LIFE UNCAGED WE ARE A CHRISTIAN FAMILY APOLLO AT ROSECRANS BILLIONAIRE GRIND HAWICO MILLIONAIRE GRIND SICK INDIVIDUALS I LOVE YOU TO THE MOON AND BACK HNWI NINI NINI NEW YORK A + U EVERYDAY SOLDIER DRIVERWEAR NATIONAL ANTHEM TRUMPET A + WINTHROP & CHURCH FOR FANS BY FANS MEDI-FIT ULTRAFLECT HOOTKID M3 INC. NIKE AIR VAPORMAX W 1WOMAN FOUNDATION LEMONPOP ACTIVE STABILIZATION FIGUERAS NACHO FIGUERAS IGNACIO FIGUERAS
General News
Luxury Brand LVL XIII Takes Legal Action Against Fashion Brand Louis Vuitton International Business Times (India) August 7, 2014 By Indu PS
Fashion industry's emerging firm LVL XIII, has initiated legal action against one of the largest fashion brands Louis Vuitton for Trademark violation.
LVL XIII claims that the Chief Executive Officer (CEO) Antonio Brown had created a front toe plate, on 12 October 2012, into the outsole specifically to distinguish the company's sneakers from other competitors in the market.
The company alleges that the defendant Louis Vuitton, known to have vast resources and market presence, has copied the toe plate and used a version on its own shoes and seeks to compete with those sold by LVL XIII as to pricing, channels of trade and customer base.
"The company filed a case in the United States District Court against Louis Vuitton's version of the toe plate, which was launched in March of 2014 in the US marketplace," LVL XIII publicist Lamont Johnson said in a written mail.
In the complaint against the renowned French fashion house, Brown claims of trademark infringement and unfair competition.
According to the young fashion designer, his brand was the first to adopt a distinctive rectangular metal plate in the front of the shoe but Louis Vuitton launched similar designs in its summer/spring 2014 collection to mislead the consumers, reported The Fashion Law.
Meanwhile, the lawsuit also alleges that Louis Vuitton's infringement of LVL XIII in their new collection will cause "reverse confusion" and that it will wipe out the hard-earned toehold of LVL XIII.
LVL XIII is a new luxury brand founded by Brown that specialises in shoes, including sneakers. In little more than a year, the LVL XIII toe plate has become widely recognised and its designs have been popular among the likes of Chris Brown, rappers Nas and Jim Jones, Chris Brown and many more celebrities.
The new brand has also been featured in various publications, including Footwear News, Good Morning America and The Examiner with metal plate represented as the aesthetic of the sneaker by LVL XIII.
However, with this issue, Louis Vuitton have nearly destroyed the CEO's hope and dreams of sustaining his company in the apparel and footwear industry.
Adidas Has OK to Cover Trademark Swooshes at Nike's Hometown Track Field During Meet FoxBusiness.com/Associated Press July 23, 2014
EUGENE, Ore. - Adidas has invaded the birthplace of Nike.
Crews preparing for this week's world junior track championships at Hayward Field covered the Nike swooshes and pinned Adidas posters to the fence alongside the track, The Register-Guard newspaper reported (http://is.gd/m4SjuJ ).
Adidas can take that action in Nike's hometown because of its sponsorship deal with the International Association of Athletics Federation.
As part of the sponsorship, the German multinational receives a "clean venue" at Hayward Field, free of its rivals' logos.
The agreement does stop short of throwing a paper bag over the statue of Bill Bowerman, the Nike co- founder and legendary University of Oregon track coach.
Athletic clothing and shoe companies spend a lot of money to sponsor sporting events, where their brands are seen by fans in the stadium and the broader television audience.
"It's a normal branding policy that you see at all major events," said Vin Lananna, the former University of Oregon track coach who is now president of TrackTown USA, the local organizing committee.
As lead sponsor of the U.S. Olympic Track & Field Trials in Eugene in 2008 and 2012, the Nike swoosh reigned supreme at Hayward Field. Nike's rivals weren't even allowed in the gates of the Fan Festival area set up near the track.
Matt Powell, a footwear industry analyst, said Phil Knight, the Nike co-founder and major University of Oregon benefactor, probably is not pleased with the current turn of events.
"This is the birthplace of Nike, right? I'm sure it does stick in his throat," he told the newspaper. Nike and Adidas "compete in the business world and on the field every day," he added. "You can count on them keeping score of who wins."
Although Adidas' partnership with IAAF removes the Nike logo off the video board and other fixtures at Hayward Field, it doesn't control what the athletes wear. Teams have various contracts with sponsors and so do individual athletes.
Skechers Sues Fila Saying Shoe Model Infringes Design Patents Bloomberg.com July 11, 2014 By Victoria Slind-Flor
Skechers U.S.A. Inc. (SKX), a maker of casual footwear, sued Fila U.S.A. Inc. of Hunts Valley,Maryland, for patent infringement.
The lawsuit involved Fila's Amazen Memory Moc, a shoe Skechers says infringes two design patents and the trade dress of its Skechers Go Walk slip-on shoe.
Skechers, based in Manhattan Beach, California, said in its complaint that it sent a cease-and-desist notice to Fila in July 2013 and Fila agreed to quit making the offending shoe.
Fila continues to infringe the patents and trade dress "willfully, wantonly and deliberately" and to compete unfairly, Skechers claims.
The Skechers claim is without merit and Fila will defend the suit, Fila spokesman Sean Lynch said in an e-mailed statement.
The case is Skechers U.S.A. Inc. v. Fila U.S.A. Inc., 14-cv-05123, U.S. District Court, Central District of California (Los Angeles).
Taking on the Mighty UGG Boot from a Tiny Corner of Cornwall Telegraph.co.uk July 27, 2014 By Rebecca Burn-Callander
The sleepy seaside town of Newquay, Cornwall, is known for its surfing, cream teas and pasties but on a small industrial estate just outside of town, a small manufacturing company is slowly building up an international brand that could have Australian footwear giant UGG quaking in its boots.
Celtic & Co has been making the "ugg" - the name was once just a generic term for the style of sheepskin boot - for 25 years. Unlike its rival, which is owned by the US shoe corporation Deckers, each and every boot is handmade using traditional artisan techniques.
The boots are crafted using only British sheepskin, and double stitched for durability. Because of the way the skins are treated, Celtic's boots are also unique in that they are machine washable.
"They were designed for the British weather," explains Celtic & Co co-founder Kath Whitworth, 49. "Uggs were surfer boots. They would wear them to the beach, so they had to be washable to get the sand and tide marks off."
Customers can choose from 16 colours, make special orders, and each pair is made bespoke. Celtic has spent two decades streamlining the process so that the factory can make hundreds of boots a day. "If the Queen wanted some red boots, we could have them for her in one hour," says Whitworth's husband Nick, 55.
The boots are a favourite with Pippa and Kate Middleton, as well as Tess Daly - "her whole family wears them," says Kath. And now Celtic is keen to extend their brand beyond the traditional "outdoorsy" demographic and tap into a global market, to steal market share Celtic's relationship with UGG is a complicated one. Twenty years ago, the Cornish business was called the Original UGG Company and the Whitworths owned the UGG trademark in the UK.
"I bought it for £500," says Nick. "That was a lot of money back in the nineties but it was the best thing I ever did. There are still surfers walking around the town in the original boots featuring the old label."
When Deckers bought UGG Australia from Brian Smith in 1995, it began registering the trademark all around the world. But when its lawyers tried to take the name in this country, its application was blocked. The Whitworths agreed to license the trademark to the American company, with the option to buy it wholesale after seven years.
The deal allowed Celtic to buy a brand new factory and double the size of the business in a single year. The Whitworths won't reveal the terms of the deal, however: "We've never told anyone," says Nick. "But I will say that we invested every penny back into the business."
The pair's chagrin would be understandable, given that Deckers now turns over $1.56bn: revenues that the company stated were "driven by the UGG" in its 2013 annual report. But the Celtic bosses still feel they made the right decision selling up the brand name. "We've been surfing the back of its wave," explains Nick. "They were up there spending millions and millions on marketing and we climbed up behind them."
"UGG made these boots wardrobe staples," adds Kath. "They did a very good job for us. And UGG wasn't UGG as you know it now back then. People had only just started hearing about the company over here."
When the Whitworths bought their Newquay factory as a defunct shell for £15,000 back in 1990, they never expected the Ugg boot to become a global phenomenon, gracing the feet of countless celebrities. The company's previous surfer owners had run the business into the ground, according to Nick. "When the surf was up they'd disappear. They'd sell a pair of boots to keep them going a couple of days, but it was a lifestyle business."
After seeing an ad in the paper, the retired air force engineer and his wife, who was born and bred in Newquay, found themselves in a garage with a couple of sewing machines, seven pairs of boots, no staff and no accounts.
Over the next decade, the fledgling entrepreneurs found out everything they could about sheepskin and the boot trade. The learned that British skins were the best raw material for their boots: "The skins here are thicker and denser than skins from around the world," says Kath.
The company has become a champion of British manufacturing while giving a much-needed boost to Britain's sheep farming industry.
"We're buying a by-product of the British meat industry," says Kath, explaining that if the skins aren't sold to by the abattoirs, the farmers have to pay for them to be incinerated.
"Since the foot and mouth outbreak, the rules have become much more stringent. Sheepskin isn't flammable, so you have to burn them at incredible temperature which is terrible for the environment and extremely expensive."
For years, Celtic worked with a tannery in Bridgewater, the last remaining factory of its kind in the UK, to treat the skins. But the company closed in 2010 due to the meteoric rise of the Chinese tanning giants. "The workforce was ageing, there was no one there under 60," adds Nick. "Young people don't want to work in smelly factories any more. They want office jobs."
This means that today, Celtic has to send its British skins over to Turkey for tanning, which then sends them back to the UK for the 11-stage manufacturing process to produce a single boot. "We were thinking of opening our own tannery, and have been in talks with the Royal Sheepskin Association," says Nick. "But you need about £30m to get one going and who would work there?"
Sourcing the sheepskin becomes more and more challenging for the business each year, especially as it is a commodity that is subject to huge price fluctuations, and millions of skins can be bought in a single deal by China. Nonetheless, the company has maintained its commitment to quality.
"It's been one of the best ways to differentiate our brand from UGG," says Kath. "We don't make our boots in China. We're working here in Cornwall with the best raw product on the market."
Today, Celtic generates 75pc of its £6.2m turnover from online sales, with a small percentage from phone sales and the 20pc from trade. The company is primarily a mail-order business, sending out its catalogues at the start of each season.
To try and balance out the seasonality of the business, Celtic introduced clothing back in 2006, focusing only on natural fibres and styles that weren't available on the high street. Its entrepreneurial rigour drew the attention of private equity firm Piper in 2011.
Piper took a stake in the business for an undisclosed sum and began bulking out the catalogue, introducing a new range of summer clothing and investing heavily in the database. Within 18 months, Celtic, which has been profitable since inception, had racked up debts of £2m.
The Whitworths came to the rescue of their brand, buying it back for around £60,000 after taking the company through pre-pack administration. The company made 16 redundancies and rapidly downsized its catalogue, taking a back to basics approach. Piper, in a move that is "unheard of" in the industry, according to sources close to the deal, wrote off its entire investment. "It didn't want the business to fall over because it would have meant everyone lost their job," says Nick. "I've never known of an equity company doing the honourable thing like that. 90pc of our supplier invoices were settled."
Celtic is a prime employer in the Newquay area, with up to 60 people on the payroll during the winter months when demand for boots is at its highest. In an economy that relies so heavily on summer tourism, winter jobs are scarce and Celtic has become a lifeline for many locals. "It's great to support a town that relies very much on its summer business," says Kath.
Piper did leave one asset behind, managing director Emily Bates, who is now tasked with working out why its ambitious expansion strategy failed. "I think it was too much, too fast," she says. "Now we're focusing on what we're good at. We're looking at overseas markets as Celtic is already very popular in Japan and the US. But the plan is to expand profitably."
The company's "Made in Britain" branding will be crucial to its future success, she adds. "It's not that people from other countries think it's better quality so much," says Emily, "It's that when it comes to products like sheepskin, they think that we know about how to handle bad weather - which we do!" At the moment, just 8pc of sales come from exports, but Bates and the Whitworths are hoping to change all that.
Their strategy?
"We're a winter brand, so rather than try and be something we're not, why not chase winter around the globe?" says Kath.
Barnes & Thornburg LLP. If you have questions regarding any article, would like further information, or have suggestions about future articles, please contact David Spooner at [email protected]
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