Microsoft Corporation v Ben Zhong Fan - [2003] FCA 1026

FEDERAL COURT OF AUSTRALIA
Microsoft Corporation & Ors v Ben Zhong Fan [2003] FCA 1026
EVIDENCE – legal professional privilege at common law – dominant purpose - real prospect of litigation
PRACTICE AND PROCEDURE – whether discovery “necessary”
Evidence Act 1995 (Cth), s 119
Federal Court Rules, O15 r15
ACCC v Australian Safeways Stores Pty Ltd (1998) 81 FCR 526 not followed
Commissioner of Taxation v Pratt Holdings Pty Ltd (2003) 195 ALR 717 referred to
Commonwealth of Australia v Northern Land Council (1991) 30 FCR 1 referred to
Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 applied
Grant v Downs (1976) 135 CLR 674 applied
Hartogen Energy Limited v the Australian Gas Light Company (1992) 36 FCR 557 applied
Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 applied
Sparnon v Apand Pty Limited (1996) 68 FCR 322 referred to
Trade Practices Commission v CC (New South Wales) Pty Ltd and Ors (No4) (1995) 131 ALR 581 referred to
Trade Practices Commission v Port Adelaide Wool Company Pty Limited (1995) 60 FCR 366 applied
Ventouris v Mountain [1991] 1 WLR 607 referred to
MICROSOFT CORPORATION, MICROSOFT PTY LIMITED AND MICROSOFT LICENSING INC v BEN ZHONG FAN TRADING AS BIGBEN COMPUTER
N201 of 2002
JACOBSON J
10 OCTOBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 201 of 2002

BETWEEN:

MICROSOFT CORPORATION
FIRST APPLICANT

MICROSOFT PTY LIMITED
(ABN 29 002 589 460)
SECOND APPLICANT

MICROSOFT LICENSING INC
THIRD APPLICANT

AND:

BEN ZHONG FAN TRADING AS
BIGBEN COMPUTER
RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

10 OCTOBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

The notice of motion filed on 7 August 2003 is dismissed.

The Respondent pays the Applicants’ costs of the motion.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 201 of 2002

BETWEEN:

MICROSOFT CORPORATION
FIRST APPLICANT

MICROSOFT PTY LIMITED
(ABN 29 002 589 460)
SECOND APPLICANT

MICROSOFT LICENSING INC
THIRD APPLICANT

AND:

BEN ZHONG FAN TRADING AS
BIGBEN COMPUTER
RESPONDENT

JUDGE:

JACOBSON J

DATE:

10 OCTOBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
Introduction

In the principal proceedings, the Applicants (“Microsoft”) sue the Respondent for copyright infringement and infringement of Microsoft’s trademarks. The infringements are alleged to have occurred on or before 22 December 2001, that date being the date on which the Respondent sold a computer to Trade Mark Investigation Services (“TMIS”), a company retained by Microsoft to conduct investigations for its anti-piracy campaign. The computer is alleged to have contained an unlicensed copy of Microsoft’s computer program.
Microsoft filed a list of documents on 1 August 2002 in which it claims legal professional privilege for a number of documents produced in connection with the anti-piracy campaign. This list was then amended on 23 August 2002.
By a notice of motion filed on 7 August…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] FCA 1026
Decision Date: 10 OCTOBER 2003

CaseChat Overview and Summary

Microsoft Corporation sought to compel TMIS to disclose information relating to an investigation into the alleged infringement of copyright in software. The matter was heard in the Federal Court of Australia. The legal issue before the Court was whether a claim of legal professional privilege could be made in respect of the information that TMIS was directed to produce.

The Court found that there was no evidence that the information in question was prepared by a legal practitioner for the dominant purpose of using it for the purposes of litigation or other legal advice. The Court held that there was no evidence that the information was prepared for the purposes of seeking legal advice or that it was intended to be used in litigation. The Court further found that the information was prepared for the purposes of the anti-piracy campaign and was not prepared for the dominant purpose of using it for the purposes of litigation. The Court held that there was no basis for the claim of legal professional privilege.

The Court dismissed Microsoft's claim for an order compelling TMIS to produce the information in question. The Court further ordered that the respondent pay the applicant's costs of the motion.

Orders

Orders of the court

1. The notice of motion filed on 7 August 2003 is dismissed.

2. The Respondent pays the Applicants’ costs of the motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

This is because there is no issue in the principal proceedings that the computer was purchased by TMIS on 22 December 2001. The only issue for determination is whether the infringing software was reproduced on the computer prior to its sale.The evidence in support of the claim for privilege Microsoft’s evidence is contained in an affidavit of Ms S Kaisser dated 25 July 2003. She is a “paralegal” for Microsoft Pty Limited and has worked in Microsoft’s Law and Corporate Affairs Department since 22 September 1997. Although Ms Kaisser describes herself as a paralegal, it appears that her duties are more extensive than those which would usually be undertaken by persons of that job description employed by law firms. Ms Kaisser has been responsible for administering the enforcement of Microsoft’s intellectual property rights and the conduct of an anti-piracy campaign in Australia. She reports directly to the Asia Pacific Counsel for Microsoft. Microsoft’s anti-piracy campaign comprises investigative and legal action taken by Microsoft on a regular and on-going basis against Australian companies and individuals suspected or found to be infringing Microsoft’s copyright and trademarks through the manufacture or supply of counterfeit or unlicensed Microsoft software. Ms Kaisser has been closely involved in the conduct and management of the campaign since September 1997. She says that she has detailed knowledge of Microsoft’s practices in relation to infringers, including gathering of evidence, seeking of legal advice and instructing solicitors. Ms Kaisser’s affidavit refers in some detail to her knowledge of steps taken in the anti-piracy campaign. Microsoft relies on leads about suspected infringers, including leads obtained from its own general surveillance activities conducted by licensed private investigators such as TMIS. TMIS has been engaged by Microsoft since 1994 to conduct investigations of persons or companies suspected of infringement. As part of the investigation process, the investigator usually attempts to make a purchase of Microsoft software from a suspected infringer, either as a standalone product or as software installed on a computer. Ms Kaisser states that where Microsoft’s investigation processes are undertaken Microsoft instructs its investigators to conduct investigations of suspected infringers with a view to instructing its solicitors to commence legal proceedings unless the investigation does not support the commencement of a case or the infringer agrees to resolve the matter. Once Microsoft obtains the investigator’s report and confirms that it is consistent with infringement, Microsoft forwards the report to its solicitors with instructions to commence proceedings or send a letter of demand. Ms Kaisser states that in her experience many infringers against whom Microsoft takes legal action continue to infringe after the original action is resolved. She says that for this reason Microsoft often instructs its investigators to conduct a follow up investigation. The same procedures with respect to instructing solicitors are then followed. In most cases, reports are sent to Microsoft’s solicitors to examine the evidence and advise on the commencement of further action.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 201 of 2002

BETWEEN:	MICROSOFT CORPORATION FIRST APPLICANT MICROSOFT PTY LIMITED (ABN 29 002 589 460) SECOND APPLICANT MICROSOFT LICENSING INC THIRD APPLICANT
AND:	BEN ZHONG FAN TRADING AS BIGBEN COMPUTER RESPONDENT
JUDGE:	JACOBSON J
DATE OF ORDER:	10 OCTOBER 2003
WHERE MADE:	SYDNEY

JUDGE:	JACOBSON J
DATE:	10 OCTOBER 2003
PLACE:	SYDNEY