The Federal Court has sentenced a man who sold millions of dollars worth of Ugg boots to three years jail after he repeatedly ignored court orders to stop with the fake boot operation.
Vladimir Vaysman, a director of Melbourne-company Hepbourne, sold more than 30,000 pairs of fake Ugg boots between 2003 and 2007, in an operation that is believed to earned as much as $10 million.
The rights to the name “Ugg Australia” and the stylised sun logo, is owned by US company Deckers Outside Corp.
Last year, Federal Court judge Justice Richard Tracey awarded Deckers $3 million in damages for lost profits and a further $3.5 million for the flagrancy of the copyright breach. The defendants, Hepbourne and Vaysman, were also ordered to pay $1 million in costs.
But in a judgement handed down in Melbourne yesterday, Justice Tracey also slammed Vaysman, his sister Victoria Vaysman and another man, Leonid Mykhalovski, for ignoring previous Federal Court orders made from 2004 onwards preventing them from selling the fake boots.
Vladimir Vaysman was sentenced to a total of five-and-a-half years jail on a total of 10 charges, although as the sentences will be served concurrently the total time in jail will be three years.
His sister Victoria was sentenced to 12 months in jail (although 10 months will be suspended), and Mykhalovski will serve three months.
It is believed the sentence for Vladimir is a record for contempt proceedings.
“This is one of the worst cases of contempt to have come before the Court,” Treacy said in a stinging judgement.
“Mr Vaysman has deliberately and repeatedly contravened undertakings given by him to the Court and orders of the Court over a four year period. The need for both personal and general deterrence ranks highly in the sentencing process.
“Not only have [Deckers’] rights been seriously infringed, the authority of the Court has been severely undermined. Mr Vaysman’s conduct falls within the most serious category of criminal contempt cases. Although a sentence of imprisonment is a last resort, nothing less would be appropriate in the circumstances of the present case.”
While the sentences have justified Deckers’ long pursuit of the Hepbourne and Vaysman, the company’s chances of recovering its lost profits look slim.
Hepbourne was in liquidation before last year’s $7.5 million damages judgement, and Tracey said yesterday that Vasysman has been declared bankrupt.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
