Microsoft Corporation and Ors v CPL Notting Hill Pty Ltd and Ors (No.6)

This decision of the Federal Circuit Court of Australia concerned an application by the CPL parties for leave to proceed with a cross-claim and amended defence, which had been filed shortly before a case management hearing. The dispute arose within ongoing litigation between Microsoft Corporation and others (the Microsoft parties) and CPL Notting Hill Pty Ltd and others (the CPL parties), concerning alleged copyright infringement and related matters.

The primary legal issue before the court was whether the interests of justice warranted allowing the CPL parties to introduce a new cross-claim and amend their defence at this late stage of proceedings. This involved considering whether the factual and legal matters underpinning these proposed amendments could and should have been raised earlier in the litigation, particularly in light of the fact that the underlying end-user licence agreements (EULAs) were known to the parties and in evidence at a previous trial.

Judge Baird reasoned that the CPL parties had not provided a satisfactory explanation for why the matters now sought to be raised in the cross-claim could not have been included in their amended defence earlier. While the CPL parties argued that new counsel, with fresh eyes, had identified new arguments based on existing factual material, the court found that the proposed cross-claim sought significant relief, including declarations and claims for damages under the Australian Consumer Law, which extended beyond a purely defensive posture. The court noted that the question of the nature and scope of any licence to reproduce the software had been a central issue at the first trial, even if the legal conclusions now contended for were different.

Ultimately, the court rejected the CPL parties' application to proceed with the June cross-claim at that time. However, the court directed the CPL parties to file and serve any application for leave to proceed with the cross-claim, along with supporting affidavits and submissions, by a specified date, with any such application to be heard on a later date.