The production of c and b quarks in $\mathrm{\gamma\gamma}$ collisions is studied with the L3 detector at LEP with 627 $\mathrm{pb^{-1}}$ of data, collected at centre-of-mass energies from 189 GeV to 209 GeV. Hadronic final states containing c and b quarks are identified by detecting electrons or muons from their semileptonic decays. The cross sections $\mathrm{\sigma(e^{+}e^{-}\rightarrow e^{+}e^{-}c \bar{c} X)}$ and $\mathrm{\sigma(e^{+}e^{-}\rightarrow e^{+}e^{-}b \bar{b} X)}$ are measured and compared to next-to-leading order perturbative QCD calculations. The cross section of b production is in excess of the QCD prediction.