Spencer sez: “Recently, a friend of mine from Australia was attempting to sell some ugg boots (note that’s with a lowercase u) on eBay and received a note from them that she couldn’t use the word “ugg” anywhere in their title or description because the trademark owner had threatened them. Knowing that “ugg” is a generic Australian term for sheepskin boots and has been used for years (to the point that it’s in the dictionary), she was more than a little annoyed. We were inspired to do some research and discovered that the American company Deckers has been attempting to wrest control of the word “ugg” using legal threats for some time now.” Link
Grant Barrett, Assistant Editor, Lexical Reference and Project Editor, Historical Dictionary of American Slang for Oxford University Press sez: “The Macquarie Dictionary (‘Australia’s National Dictionary’) indicates that the Australian ug/ugh/ugg boots derive from a trademark. The OED concurs and defines them as ‘a proprietary name for a type of soft, sheepskin boot’ indicating that it is used in Australian and New Zealand. The original spelling appears to have been ‘Ugh.'”
Zara Baxter sez: “The Macquarie dictionary only lists UGG boot as a proprietary name because Deckers threatened to sue them – see here. There’s a big stink in Australia about it at the moment. Lots of media coverage. FWIW my (slightly older) macquarie lists it as a generic term.