DECKERS OUTDOOR CORP

As part of our global policing program to protect our intellectual property rights, from time to time, we file lawsuits in

various jurisdictions asserting claims for alleged acts of trademark counterfeiting, trademark infringement, patent

infringement, trade dress infringement, and trademark dilution. We generally have multiple actions such as these

pending at any given point in time. These actions may result in seizure of counterfeit merchandise, out-of-court

settlements with defendants, or other outcomes. In addition, from time to time, we are subject to claims in which

opposing parties will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of

certain of our intellectual property rights, including allegations that the UGG brand trademark registrations and

design patents are invalid or unenforceable. Furthermore, we are aware of many instances throughout the world in

which a third-party is using our brand trademarks within its internet domain name.

From time to time, we are involved in various legal proceedings, disputes, and other claims arising in the ordinary

course of business, including employment, intellectual property, product liability, and breach of contract claims.

Although the results of these ordinary course matters cannot be predicted with certainty, we currently believe that

the final outcome of these ordinary course matters will not, individually or in the aggregate, have a material adverse

effect on our business, results of operations, financial condition, or cash flows. However, regardless of the merit of

the claims raised or the outcome, these ordinary course matters can have an adverse impact on us as a result of

legal costs, diversion of management’s time and resources, and other factors.

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