2 years gaol for contempt

The Full Federal Court has reduced Mr Vaysman’s punishment for contempt from 3 years to 2 years imprisonment for repeatedly breaching injunctions not to infringe trade mark and copyright.

In 2003, Deckers Outdoor Corporation (the owner of the UGG Australia trade mark) sued Mr Vaysman, members of his extended family and various companies they operated through for infringing its trade mark and copyright. Those proceedings were settled by consent. Injunctions against trade mark infringement and copyright infringement had been ordered.

In 2004, Deckers Outdoor Corporation again sued Mr Vaysman, members of his family and the companies through which they operated for breach of the terms of settlement reached in 2003. Those proceedings were also settled by consent.

In 2007, Deckers Outdoor Corporation sued Mr Vaysman, members of his family, their companies and a number of others for the third time: for infringement of its trade marks and copyright and breaches of the prior terms of settlement.

Essentially, notwithstanding the two sets of earlier proceedings, the undertakings not to infringe and the injunctions against infringement, Mr Vaysman et al. had continued with their infringing activity making counterfeit UGG boots unabated at all. The proceedings involved two main aspects: the civil claims for infringement of trade mark and copyright and contempt charges for breaches of court orders made in both the earlier proceedings and also the 2007 proceedings (e.g. continuing the infringing activity in defiance of an interlocutory injunction).

Before the contempt charges were heard and the punishments handed down, there had been judgment against the Vaysman parties on the civil claims for infringement including an order for the corporate vehicle and Mr Vaysman jointly and severally to pay $3 million in compensatory damages and for the corporate vehicle to pay $3.5 million in additional damages pursuant to s 115(4) of the Copyright Act. (The corporate vehicle was by this stage being wound up.)

In relation to the most serious contempt, charge 18, the trial judge had found:

Charge 18 – Between December 2005 and (at least) November 2007 Mr Vaysman caused and encouraged the use of a factory in Roper Street Moorabbin for manufacturing and selling counterfeit footwear.  He did so contrary to consent orders to which he was a party which were made by the Court on 12 March 2004.  During this period, as I found in Deckers Outdoor Corporation Inc. Farley (No 5) [2009] FCA 1298 (“Deckers (No 5)”) at [84]-[92], over 30,000 pairs of counterfeit boots were sold with the profit on those sales amounting to over $3 million.

As Mr Vaysman was found to be in overall control of the whole operation, the trial judge sentenced him to 3 years’ imprisonment for this contempt. (Other charges of contempt were also established, but received much lighter punishments to be served concurrently with the punishment on charge 18.

By the time the contempt charges came to be heard in 2010, Mr Vaysman was no longer in Australia.

After the punishments for contempt were imposed, Mr Vaysman’s father, a 74 year old in ill-health and found by the Court to be of previously unblemished character, successfully appealed a sentence of a term of 18 months’ imprisonment. Gray and Bromberg JJ, considering imprisonment very much a last resort, imposed a fine of  $50,000, but ordered that the roughly 2 months or so he had already served in prison stand in lieu of the fine. Besanko J agreed that the sentence needed to be reduced, but would have reduced the sentence to a term of 12 months.

Mr Vaysman returned to Australia in June 2013. He was imprisoned pursuant to the contempt order. He sought leave to appeal (a long time out of time).

Besanko J, with whom Siopis J agreed, granted leave and considering the 3 year sentence manifestly excessive having regard to other sentences for contempt, ordered the sentence be reduced to two years. Besanko J did not consider that Federal Court sentencing practices needed to be adjusted for consistency with State court sentences. Nor did his Honour think any discount should be made having regard to the award of additional damages.

Dowsett J took a different approach.

His Honour considered that, to the extent that Federal Court sentences for contempt, were more lenient than comparable State courts, the Federal Court standard should be lifted. Focusing on the punitive nature of awards of additional damages, however, his Honour considered there an element of double counting or double jeopardy in not taking into account the additional damages award when fixing the contempt penalty. Dowsett J would have reduced the prison sentence from 3 years to 2 years and 3 months.

Vaysman v Deckers Outdoor Corporation Inc [2014] FCAFC 60

Dr Gurry re-appointed

Last week, 8 May, WIPO’s General Assembly re-elected Dr Francis Gurry to a second 6 year term, beginning 1 October 2014 as Director-General of WIPO.

Congratulations, Dr Gurry!

In his acceptance speech, Dr Gurry highlighted the challenge facing WIPO:

I believe that the fundamental challenge that we face as an Organization is to achieve a shared understanding of the contribution and value of intellectual property to economic, social and cultural development. This is by no means an easy task. Many obstacles lie in the path – different competitive interests in an economy in which knowledge- and technology-intensive industries account for an increasing 30% share of global economic output; asymmetries of wealth, opportunity and knowledge; historical and contemporary trust deficits; and the reality of a multi-speed and multi-tiered world in which multilateralism, while being the highest expression of inclusiveness and legitimacy, is nevertheless the slowest solution.

It would appear this means continued development of the international agenda on specific issues.

Press Release

Acceptance Speech

Plain Packaging: WTO dispute panel appointed

Five countries have brought WTO Complaints against Australia’s plain packaging rules for tobacco products.

On 25 April 2014[1], the Dispute Settlement Body under the Dispute Settlement Understanding established panels to determine the complaints brought by Cuba, the Dominican Republic, the Ukraine, Honduras and Indonesia.

On 5 May[2], the Director-General formally announced the 3 member Panel who will hear the disputes:

In addition to the 5 complainants, some 25 other polities have “reserved their third party rights”:

Argentina, Brazil, Canada, Chile, China, the European Union, Guatemala, India, Japan, Korea, Malaysia, Mexico, New Zealand, Nicaragua, Norway, Philippines, the Russian Federation, Singapore, Chinese Taipei, Thailand, Trinidad & Tobago, Turkey, the United States, Uruguay and Zimbabwe

Typically, there should be a decision within 6 months (but there is also an appeal process). Typical timeline


  1. Not sure if that is an auspice.  ?
  2. Another date freighted with history.  ?

Abstract principle, fine art or just unknowable

Mr Lisica applied for a patent, claim 1 of which reads:

An auscultative method that expounds upon the Natural Harmonics Series (NHS) and Mr Svetko Lisica’s Scientific Theory for Music’s decipherability and attunement, from the Invention’s Programmatic Specificity in a soniferous or visual realm for a new, useful, innovative and original Composition Engine and via its computations, providing the compositional harmonic materials that are put in the states of being manifested by the Invention’s unprecedented and original Musical Instrument and Sonic Biodynamical Brain Entrainment Bridge for Binaural Beats, into a stable unit of measure in exactitude for a tuning medium, herewith this Invention is the state or fact of existence, a practical Universal Intonation System that belongs with Music, The Absolute and The Beyond.

(The other claims are all dependent.)

Despite submissions to the Examiner, the Delegate at a hearing and an appeal to the Court, no-one (apart from Mr Lisica) really has any idea what the claimed invention is.

The Delegate rejected Mr Lisica’s application on the grounds that it was not a manner of manufacture and contravention of s 40(2) – the old form.[1]

Jessup J found only one objection was necessary: non-compliance with s 40(3) (in its old form):

The claims are, of course, critical to the exercise in which the court is now involved. It is here that the applicant encounters what is, for a court operating without the assistance of expert evidence, a fundamental difficulty. In my view, Claim 1, set out above, is not clear and succinct, as required by s 40(3) of the Patents Act. As a statement marking out the area of the public monopoly which the applicant seeks, the claim falls well short of the standard of clarity required. The ground of objection referred to in s 59(c) is substantiated in relation to the claim. I do not, therefore, consider that there is no lawful ground of objection of the kind referred to in s 49(1)(b). I would exercise the discretion arising under s 49(2) adversely to the applicant.

The Commissioner (or, rather, her officers) were a bit naughty. Mr Lisica had submitted 6 files in support of his application. The Examiner and the Delegate only opened and read 2 of them. Apparently, the other files were in SCM format, which the Patent Office couldn’t open.[2]

The naughty bit: no-one told Mr Lisica that the Patent Office didn’t read the files (because they couldn’t open them) until everyone got to Court for the trial. As Jessup J explained:

It may have required a modicum of ingenuity to open the SCM files – in a demonstration in court, the applicant himself did so. But the troubling aspect of the omission referred to above is not whether it was reasonable of the applicant to have expected the examiner and the delegate to open the files, but that the applicant was never informed of the difficulty which they were, apparently, experiencing, nor invited to remedy it. The examiner’s report was supplied to the applicant in the normal course, and it gave him no reason to suspect that four out of the six files which he had submitted had not been viewed or considered for such assistance as they may have provided in conveying the nature of the invention and how it was best performed. In that state of ignorance, the applicant made his submissions to the delegate, and he too dealt with the problems which the application involved without viewing all the files which constituted the application.

(His Honour did note that he was not suggesting any different result might have occurred if the correct process had observed.) Jessup J seems to be contemplating not allowing the Commissioner her costs:

In the orders which accompany these reasons, I shall lay out a timetable for the making of written submissions on costs. I shall, of course, consider any submission which the Commissioner makes in that regard, but I think I should say at this stage that one issue upon which I would expect to be addressed in that submission is whether the circumstances most recently discussed above in these reasons should be considered relevant to such entitlement to costs as the Commissioner might otherwise have as the successful party in this appeal.

Lisica v Commissioner of Patents [2014] FCA 433


  1. Relying amongst other things on Research Affiliates.  ?
  2. His Honour drily noted, even a file in .doc format does not comply with the Commissioner’s requirements.  ?