…
30 Leah Farley first became involved in the distribution of UGG products in December 2005. She was contacted by Vladimir Vaysman (the Fifth Respondent and son of the Vaysmans). He wanted her to sell the UGG products on eBay. She agreed. Vladimir Vaysman provided her with stock. The boots and the boxes in which they were packaged bore the "UGG australia" logo. The soles of the boots contained the word "UGG" adjacent to the sun device. Initially the boots were delivered to Ms Farley by Vladimir Vaysman.
31 From about June 2007 Ms Farley attended on a daily basis at the Moorabbin factory to collect boots for sale on eBay. One or other of the Vaysmans would usuallyanswer the door when she attended. She observed the Vaysmans engaged in the manufacture of the boots, either operating machinery or gluing Ugg australia labels on the boots. She saw Polina Vaysman cutting sheepskin pieces on a cutting machine. She observed Polina Vaysman giving bags of bootsto persons who Vladimir and Polina had advised her were selling Ugg branded boots at the Victoria Market.
32 Gihan Ezzat was approached by Victoria Vaysman in 2005 and asked to offer UGG branded footwear on eBay using eBay trading names operated by Ms Ezzat. She agreed. Initially, she was not involved in the packaging and despatch of boots to purchasers. In late 2006 Vladimir Vaysman and Victoria Vaysman commenced delivering UGG boxed products to Ms Ezzat so that she could despatch them to purchasers. During 2007 Victoria Vaysman asked Ms Ezzat to box the boots and agreed to pay her for performing that service. Ms Ezzat agreed. About the same time Victoria Vaysman told Ms Ezzat that the business had become so busy that neither she nor Vladimir Vaysman was able to continue delivering boots to her home. Victoria Vaysman told her that she would have to pick up stock from the Moorabbin factory. When Ms Ezzat attended the factory she observed people engaged in the manufacturing of footwear. She met and spoke to the Vaysmans, Vladimir Vaysman and Victoria Vaysman during these visits to the Moorabbin premises.
33 Joanne Strickland became involved in the marketing of UGG products in about mid-2006 when she was approached by Ms Farley. Ms Farley invited her to sell boots on eBay during busy periods. She did so between July 2006 and September 2006 and again between July 2007 and November 2007. During 2007 she attended at the Moorabbin factory. She dealt with Vladimir Vaysman and observed Josef and Polina Vaysman engaged in the manufacture of footwear. She also saw and spoke to Polina Vaysman during some of these visits.
34 Dianne Sommer was approached by Victoria Vaysman early in 2006 and invited to sell "genuine 'UGG Australia' boots" on eBay. Ms Sommer agreed to do this. Initially, Ms Sommer was not responsible for the despatching of footwear which she had sold on eBay. She supplied a list of names and addresses of purchasers to Victoria Vaysman and the orders were met. Between March and August 2006 Ms Sommer did not seek to sell UGG products on eBay. In mid‑August 2006 she was contacted by Vladimir Vaysman and invited to resume offering UGG products on eBay using her eBay trading name. He told her that once a sale had been made it would be necessary for her to come to the Moorabbin factory to collect the footwear and send it to the purchaser. She agreed to do this. During her visits to the factory she met the Vaysmans and Vladimir Vaysman. In Vladimir's absence, Polina Vaysman provided Ms Sommer with the boxed footwear. Ms Sommer observed Polina Vaysman sewing UGG australia labels on the heels of the footwear.
35 In the agreed statement of facts, Victoria Vaysman agreed that she had recruited Ms Sommer and Ms Ezzat to "act as her agents in promoting, advertising, offering for sale and selling on the internet sheepskin footwear under or by reference to the names 'UGG Australia' and/or the UGG Logo … and/or the Sun Device … and personally delivered such footwear to them".
36 Mr Anthony Watson, a solicitor acting on behalf of Deckers, attended the Moorabbin factory on 13 November 2007 and 12 December 2007. He was involved in the execution of the search orders which had been made by the Court. During the 12 December 2007 search he observed that there were approximately 200 pairs of finished and partly constructed sheepskin footwear marked with the UGG logo, the word "australia" and the sun device on the premises. On the heels there was a cloth label on which the letters UGG appeared above the word "australia". On the soles the letters "UGG" appeared next to the sun logo. Adjacent to the letters "UGG" on both the heels and the soles appeared the symbol ®. This is the recognised symbol which the registered owner of a trade mark in Australia is entitled to place next to representations of its registered mark: cf s 151(5) of the Trade Marks Act.
37 Mr Josef Vaysman admitted in cross-examination that he was in charge of the Moorabbin factory when Mr Watson attended. Mr Vaysman also admitted that UGG branded footwear was manufactured at the Moorabbin factory. He specifically admitted gluing soles bearing the UGG branding on one pair of boots and to providing footwear products to a man who was later observed to be conducting a stall at the Victoria Market at which boots bearing the UGG mark were being offered for sale. Mr Vaysman also admitted that he knew that boots bearing the UGG labelling were being provided to various people (including Farley and Sommer) who were then selling them on the internet. He further admitted knowing the approximate prices at which the boots were sold on the internet.
38 This evidence satisfies me, beyond reasonable doubt, that the Vaysmans were actively involved in the manufacture, packaging and distribution of boots which had on their heels the "UGG australia" label and on their soles had embossed the letters "UGG" and the sun device. They packed the boots in boxes which had on one panel the "UGG australia" logo and, on an adjacent panel, the sun device. The boxes contained pamphlets and care labels which had on them the "UGG australia" logo.
…
46 Having regard to the whole of the circumstances (including a visual comparison of the registered trade mark with the devices appearing on the products manufactured and/or distributed by the Respondents), I am left in no doubt that there exists a real likelihood of confusion and deception as to the provenance of the boots. There is a remarkable visual similarity between the lettering and other parts of the registered trade mark and the marks used by the Respondents. The impression created and, in my view, intended to be created, is that the boots were manufactured by Deckers, the owner of the registered trade mark. This conclusion is further supported by the use of the symbol ® next to the letters UGG. This is plainly an attempt to suggest that the boots had been manufactured by the owner of the registered trade mark.
…
58 The pleadings and the evidence establish, in my view, that the Respondents have no reasonable prospects of defending Deckers' trade mark infringement claim.
59 Deckers is entitled to summary judgment on its claim that Hepbourne Pty Ltd, Vladimir Vaysman, the Vaysmans, Victoria Vaysman and Samba Enterprises Pty Ltd infringed its trade mark numbered 785466 on multiple occasions in 2005, 2006 and 2007."
…
65 Deckers supports its application for summary judgment on the copyright aspects of its case by reference to the affidavits of Robert Bergstrom and Cristina Trayfors and the statutory declaration of Constance Rishwain. None of these witnesses was cross-examined.
66 Ms Rishwain has been employed by Deckers since January 1995. She has held various senior management positions. She deposed that the sun device was created by an employee of Deckers' predecessor during the course of that employee's employment, in 1996. Despite searches she has been unable to discover the original drawings and she was unable to discover the name of the employee who created the sun device.
67 Ms Rishwain recalled that an employee of Deckers created the logo which contains the three elements. The drawing was created during the course of the employee's employment by Deckers. Again, she has been unable to find the original drawings and does not know the identity of the employee who created the logo.
68 Mr Bergstrom deposed that he wrote the text which appears on the "UGG australia" care instruction card in 2004. He also wrote the text which appears in the "UGG australia" information booklet (save for some passages which appear on page 7). He did so in 2006. He wrote both texts whilst employed by Deckers and in the course of his employment by Deckers.
69 Ms Trayfors is a freelance photographer who was engaged, in 2004 and 2008, by Deckers to take a number of photographs featuring its UGG australia footwear range. These photographs were used by Deckers to advertise and promote its UGG australia footwear. She took the photographs which appear in the "UGG australia" information booklet. She had assigned all of her copyright rights in the photographs to Deckers.
70 The Vaysmans, Victoria Vaysman and Samba Enterprises Pty Ltd accept that the evidence of Mr Bergstrom establishes that Deckers owns the literary works comprising a majority of the information booklet and the care instruction card. They contend, however, that Deckers has failed to establish its ownership of the copyright subsisting in the other works and, in particular, the sun device and the logo. As a result, they contend that there is a factual dispute as to the ownership of the copyright works. Deckers acknowledges that its evidence on this point would be stronger if it were able to identify the employees whom it is said created the sun device and the "UGG australia" logo. It, nonetheless, submits that the affidavit evidence is the best evidence available to it and that it goes sufficiently far as to establish that the material subject to the copyright claim was created by persons employed by it in the course of their employment. Deckers also relies on the failure of the Respondents to suggest that they would be in a position to contradict this evidence in any way.
71 Were the "ownership" issue the only factual dispute involved in the copyright claims, I would be disposed to make an order under s 31A of the Federal Court Act. Ownership of the literary works is not disputed. The evidence that employees of Deckers created the artistic works in the course of their employment would be sufficient even though Deckers is unable to identify them. There are, however, other issues which, in my view, give rise to factual disputes which should be resolved at trial.
No challenge was made by Hepbourne to the evidence on which these findings were based.
22 I adhere to the view that Deckers is the owner of the copyright works identified above at [15]. Hepbourne has not sought to challenge the evidence of Ms Rishwain, Mr Bergstrom and Ms Trayfors which was summarised in Deckers (No 2) at [66]-[69]. Hepbourne has not made the concession in relation to the ownership of the literary works which was made by some of the other respondents: see Deckers (No 2) at [70]. It is, therefore, necessary to return to the evidence on which Deckers relies.
23 Ms Rishwain's evidence relates to the ownership of the copyright subsisting in the sun device and the logo which contains the sun device and the other two elements. Although she is unable to recall the names of the specific employees who created these works, she does depose that they were created by employees of Deckers' predecessor in the course of those employees' employment. That evidence is sufficient, in my view, to render Deckers the owner of the copyright in those works pursuant to s 35(6) of the Act: see Victoria University of Technology v Wilson (2004) 60 IPR 392 at 422. Ms Rishwain's inability to identify the particular employees is not an obstacle to the making of this finding.
24 Mr Bergstrom deposed that he was the author of the text appearing on the "UGG australia" care instruction card and most of the "UGG australia" information booklet. He wrote both texts whilst employed by Deckers and in the course of his employment by that company. Deckers thereby became the owner of the copyright in these literary works pursuant to s 35(6).
25 Ms Trayfors took the photographs which appear in the "UGG australia" information booklet. She did so pursuant to a contract for services with Deckers. She was the "author" of those photographs: see s 10 of the Copyright Act. She was, therefore, initially the owner of the copyright in the photographs. Her undisputed evidence is, however, that she assigned all of her rights in the photographs to Deckers. Deckers thereby became the owner of the copyright in those works.
26 One of the reasons that I declined to grant summary judgment against Hepbourne and some of the other respondents on Deckers' copyright claims in Deckers (No 2) was that some of those other respondents put in issue the question of whether copyright could subsist in the sun device and the UGG australia logo. It was said to be arguable that they lacked sufficient substance to constitute a work in which copyright could subsist for the purposes of s 32 of the Copyright Act.
27 As already noted, Hepbourne, in its defence to the amended statement of claim, specifically pleaded that copyright does not and cannot subsist in the sun device.
28 In my opinion the sun device is of sufficient complexity to attract copyright protection: see Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 at 114‑115 and the authorities there cited. The device was "plainly drawn with care, to obtain an effect." It is certainly as complex (if not more so) than the two devices which, in Roland Corporation, would have been accorded protection but for a defence which was not relied on by Hepbourne in the present proceeding.
29 Sections 36 and 38 of the Copyright Act identify some of the circumstances in which an infringement of copyright may occur. They provide:
"36 (1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
(1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
(2) The next three succeeding sections do not affect the generality of this section.
…
38 (1) Subject to Division 3, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, in Australia, and without the licence of the owner of the copyright:
(a) sells, lets for hire, or by way of trade offers or exposes for sale or hire, an article; or
(b) by way of trade exhibits an article in public;
if the person knew, or ought reasonably to have known, that the making of the article constituted an infringement of the copyright or, in the case of an imported article, would, if the article had been made in Australia by the importer, have constituted such an infringement.
(2) For the purposes of the last preceding subsection, the distribution of any articles:
(a) for the purpose of trade; or
(b) for any other purpose to an extent that affects prejudicially the owner of the copyright concerned;
shall be taken to be the sale of those articles.
(3) In this section:
article includes a reproduction or copy of a work or other subject-matter, being a reproduction of copy in electronic form".
30 As already noted, s 14 of the Act provides that a reproduction of a substantial part of a copyright work is sufficient to constitute an infringement of that work.
31 The evidence which was accepted in Deckers (No 2) establishes that, between 2005 and 2007, footwear which resembled that manufactured by Deckers and which bore the "UGG australia" logo was manufactured at the Moorabbin factory owned by Hepbourne. On the soles of the footwear there appeared the letters "UGG" adjacent to the sun device. The footwear was manufactured by members of the Vaysman family and others. Vladimir Vaysman was regularly observed to be on the premises. The footwear was placed in boxes which had, on one panel, the "UGG australia" logo and on the adjacent panel, the sun device. The boxes contained pamphlets and care labels which had on them the "UGG australia" logo. The care instruction card was in the same terms as the one produced by a Deckers employee (Mr Bergstrom) for use with the genuine product. The information booklet was in substantially the same terms as the one produced by Mr Bergstrom and distributed with Deckers' products. The footwear was placed in boxes either at the Moorabbin factory or at other premises pursuant to arrangements made by Vladimir Vaysman. Most of the counterfeit products were offered for sale and sold using the facilities of E-bay. The offers were made and the sales effected by a network of persons who were recruited and directed by Vladimir and Victoria Vaysman. Once a sale had been made the footwear was despatched from either the Moorabbin factory (or the other premises arranged by Vladimir Vaysman) to the purchaser.
32 This evidence satisfies me that Deckers' copyright in the works was infringed by the various acts described in the preceding paragraph. The copyright works were offered for sale, sold and distributed by way of or for the purposes of trade.
33 It remains to determine whether Hepbourne can be held responsible for these infringements. As s 36(1) makes clear, a person may be liable for an infringement of copyright if it performs one or more of the infringing acts or if it authorises the performance by others of infringing acts. In my view, Hepbourne is liable on both bases. The footwear was manufactured in and distributed from premises owned and controlled by Hepbourne. Hepbourne acted, at relevant times, through its only director and shareholder, Vladimir Vaysman. He was regularly in attendance at the Moorabbin factory. When Court orders were executed at the factory his father insisted on him being advised and called to the premises. Vladimir Vaysman was also actively involved in managing the distribution of footwear which had been manufactured at the premises. In doing so, it may readily be inferred, he was acting for and on behalf of Hepbourne.
34 Vladimir Vaysman also knew, for the purposes of s 38(1), that the making of the footwear which bore some of the copyright works, which was distributed in containers which bore one of the copyright works and which had some of the printed works attached to them, constituted an infringement of Deckers' copyright. He knew this because of the earlier proceedings which were compromised by him personally and by him on behalf of Hepbourne on terms which included a restraint on the repetition of the identical infringing conduct.
35 Furthermore, it may readily be concluded that Hepbourne, acting through Vladimir Vaysman, authorised the infringing conduct in the sense as provided for in s 36(1A) of the Copyright Act. Hepbourne had control of the Moorabbin factory. It could have, had it wished to do so, prevented the manufacture and distribution of the infringing articles by refusing entry to those who were involved in the infringing conduct. Vladimir Vaysman's knowledge of the fact that the infringing conduct was taking place in the factory may be attributed to Hepbourne. There is no evidence to suggest that Hepbourne took any steps to prevent or avoid the infringing conduct which took place at the Moorabbin factory. The contrary is true. Hepbourne, acting through Vladimir Vaysman and others recruited by him, undertook, procured and oversaw the infringing conduct. His conduct therefore passed well beyond "mere inactivity or indifference": he clearly sanctioned, approved and countenanced the infringement of Deckers' rights: see The University of New South Wales v Moorhouse (1975) 133 CLR 1 at 12 (per Gibbs J), 20 (per Jacobs J); Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380 at 408, 410-1 (per Kenny J).