A Sydney Ugg boot-maker is suing the US footwear giant Deckers in a bid to cancel the US trademark that prohibits Australian companies from selling Ugg boots overseas.

Earlier this year Deckers began action in the US District Court against Australian Leather, arguing it had illegally sold Ugg Boots in the US.

But Australian Leather owner Eddie Oygur is counter-suing, on the grounds the trademark registration was based on a falsehood.

Despite its Australian origin as a generic term, the word Ugg was registered as a brand in the US in 1985 by Australian entrepreneur Brian Smith, who later sold the trademark to Deckers.

Ever since, Australian boot-makers have been banned from exporting if they use the word Ugg, making it difficult to compete against Deckers' global Ugg Australia brand.

Deckers sells around $1 billion in Ugg boots a year worldwide and routinely sues any company that breaches its rights by using the word 'Ugg' overseas.

"They have got it registered in about 130 countries around the world," Mr Oygur said.

"No one can sell Ugg boots into the US or anywhere else."

Businessman's book 'contradicts trademark claim'

If Mr Oygur's counter-suit succeeds, the trademark will become invalid, opening the US market to all Ugg boot-makers for the first time in decades.

Australian Leather owner Eddie Oygur is counter-suing US footwear giant Deckers. ( ABC News )

His lawyer, Michael Terceiro, believes it is a strong case.

"Deckers allege that Eddie breached the trademarks in the US," he said.

"What we're alleging now is that the trademarks in the US are actually invalid, that they have been obtained through alleged fraud.

"If we can establish that case, then we are going to be seeking an order from the court that they be invalidated."

Australian Leather's case relies on the actions of Mr Smith when he registered the trademark.

In his 1985 application to the US Patent and Trademark Office, Mr Smith declared there was "no significance of the term Ugg in the relevant trade or industry".

Mr Oygur's lawyer said Mr Smith's 2014 autobiography, The Birth of a Brand, contradicted his 1985 claim. ( ABC News )

Yet the word Ugg was indisputably a household name in Australia by the 1970s, and Australian companies were exporting Ugg boots to the US well before the application was lodged.

Mr Terceiro said Mr Smith's 2014 autobiography, The Birth of a Brand, contradicted his 1985 claim.

"He talks about the fact that he knew quite well that the word Ugg was big in Australia at the time. That everybody in Australia owned these sheepskin boots," he said.

"There were a number of companies selling in America at the time that Mr Smith applied for his trademark."

Old surfing magazines have been found for use as evidence to help prove Ugg boots were already big by 1970, and not only in Australia.

"The more we can show that people in America were using the word Ugg in a generic sense, the better our case," Mr Terceiro said.

"What we've been trying to do is [use] Mr Smith's book to identify particular places and times that Ugg boots were advertised in a generic sense and getting copies of those things, those advertisements."

Clipping from surfing magazine in 1970 advertising Ugg boots. ( Supplied )

My father named Ugg boots: Aussie manufacturer

Australians have been making Ugg boots for half a century.

Graeme Spencer, who runs Huggy's Ugg boot in South Australia, said it was his father Charlie Spencer who made the first Ugg boots and came up with the word Ugg.

"A customer of his came in and said they are the ugliest boots she had ever seen ... And he just came up with U-G-G," Mr Spencer said.

Neither Deckers nor Mr Smith would answer questions from the ABC but in court documents Deckers argues the word 'Ugg' has never been a generic term anywhere.

The company said the fraud claims have been raised before but lack merit.

If Australian Leather wins Eddie Oygur is hoping the Ugg name will be open for all boot-makers to use overseas.

Australian companies would be able to export Ugg Boots for the first time in decades and Deckers would no longer have the right to exclude competitors who use the word 'Ugg' in the US.

The first court hearings are likely to take place in Chicago next year.