Motorola Solutions, Inc. v Hytera Communications Corporation Ltd
[2017] FCA 1506
•8 December 2017
FEDERAL COURT OF AUSTRALIA
Motorola Solutions, Inc. v Hytera Communications Corporation Ltd [2017] FCA 1506
File number: NSD 1283 of 2017 Judge: PERRAM J Date of judgment: 8 December 2017 Date of hearing: 8 December 2017 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and Associated Statutes Category: No Catchwords Number of paragraphs: 10 Counsel for the Applicant: Mr C Moore SC with Mr A Lang Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondents: Mr C Dimitriadis SC with Mr C Burgess Solicitor for the Respondents: Minter Ellison ORDERS
NSD 1283 of 2017 BETWEEN: MOTOROLA SOLUTIONS, INC.
Applicant
AND: HYTERA COMMUNICATIONS CORPORATION LTD
First Respondent
HYTERA COMMUNICATIONS (AUSTRALIA) PTY LTD ACN 165 879 701
Second Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
8 DECEMBER 2017
THE COURT ORDERS THAT:
1.The Applicant be granted leave under rule 16.53 of the Federal Court Rules 2011 (Cth) to amend its Statement of Claim dated 31 July 2017 and Reply dated 7 November 2017 in the manner shown in the draft Amended Statement of Claim and Amended Reply attached and marked as Attachments A and B (respectively) to the Applicant’s Interlocutory Application dated 4 December 2017 (Applicant’s Amended Documents).
2.Within 2 business days of the date of these orders, the Applicant is to file and serve the Applicant’s Amended Documents.
3.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
PERRAM J:
This is an application by the Applicant to amend its Statement of Claim and also its Reply. The proceedings are patent infringement proceedings, and the Applicant alleges infringement of three patents which I will refer to as the 355, the 960 and the 764 patents. In its Originating Application the Applicant seeks, inter alia, aggravated damages. In the last section of the current form of the Statement of Claim headed ‘C. Continuing Conduct and Relief’ are a series of allegations about relief. Paragraph 35 contains allegations which are pertinent to the claim for aggravated damages. For example, it includes allegations of flagrant infringement, knowing infringement and so on. One of those allegations is contained in paragraph 35(d) and concerns a contention that the Respondents infringed three patents ‘for their commercial benefit, and intending that the course of conduct pleaded in paragraph 35(a) above would be to their commercial benefit’.
Particulars are provided for the allegation in 35(d), and those particulars are presently as follows:
‘(i) The design, development, manufacture, importation, promotion, supply and sale of the Hytera Devices has taken place against the following background:
(A)the publication of the Patents in paragraph 35(b) above;
(B)current personnel of the first respondent, including at least G.S. Kok, Y.T. Kok and Samuel Chia, worked for the applicant during the development of the inventions the subject of the Patents;
(C)documentation regarding the inventions the subject of at least the 355 and 960 Patents was downloaded by the Hytera personnel listed in paragraph 35(d)(i)(B) above prior to them ceasing employment for the applicant and commencing employment with the first respondent.
(ii)The applicant reserves the right to provide further particulars (including following discovery and inspection).’
The Applicant now seeks to include a similar, although not identical, pleading as part of the infringement allegations for each of the three patents. It also seeks to include a reference to the same matter in part of its Reply which responds to the Respondents’ defence based upon FRAND and ETSI. It is convenient to confine attention principally to the 355 patent. Paragraphs 10 through to 16 of the Statement of Claim, as presently drafted, make allegations relating to infringement of the 355 patent. Paragraph 10, leaving aside the particulars, says as follows:
‘10. Each of the Hytera Devices is capable of being used:
(a)in a method, or in a system for performing a method, including the features of each of the claims of the 355 Patent listed for that device in Table 1 of Annexure C; or
(b)further or in the alternative, so as to cause or result in the use of such a method.’
Particulars are presently provided to paragraph 10 which go to that point. What is now sought to be done is to add a new particular 10(b)(ii) in the following terms:
‘(ii) The applicant relies on conduct by the respondents which involved knowing and intentional copying and misuse of information and documentation relating to the applicant’s digital mobile radio devices:
(A)current personnel of the first respondent, including at least G.S. Kok, Y.T. Kok and Samuel Chia (Hytera Personnel), worked for the applicant during the development of the inventions the subject of the Patents;
(B)documentation regarding the invention the subject of the 355 Patent was downloaded by the Hytera Personnel prior to them ceasing employment for the applicant and commencing employment with the first respondent; and
(C)the documentation was downloaded by the Hytera Personnel for purposes including implementing inventions the subject of the 355 Patent for the commercial benefit of the respondents.’
Mr Moore SC, who appeared for the Applicant, submitted that this pleading was relevant to a contention that infringement would be more readily inferred in circumstances where the material had been taken from the Applicant. That is a familiar style of reasoning in intellectual property cases and, in principle, I accept it. Against that, Mr Dimtriadis SC, who appeared for the Respondents, made a number of points.
The first was to point to the fact that paragraph 10, in fact, was an allegation about capability rather than an allegation of infringement. I was initially impressed by that, but a closer analysis reveals the point to be incorrect. If the Hytera devices are capable of being used, it is really a statement about what the Hytera devices, in fact, do, and it seems to me that that allegation is capable of being supported in the manner for which Mr Moore contends by the new particular 10(b)(ii). As a result, I reject the argument.
There were then raised a series of arguments about the inadequacy of the provided particulars. It was said, for example, that the information which was referred to in new particular 10(b)(ii) had not been identified, that it was not alleged that the information was being used in any particular Motorola device, that the reference in new particular 10(b)(ii)(A) to the word ‘including’ was inappropriate because it left open the possibility of other employees subsequently being identified, and as an omnibus submission, that new particular 10(b)(ii)(C) really needed to go a little bit further and identify an allegation which involved the Respondents. I do not accept these submissions. Effectively, the same pleading, subject to one matter to which I return, appears already in paragraph 35(d) which I have set out above at [2] and to which no objection is taken. That rather undercuts the significance of the particularisation point which has been taken. In any event, it seems to me that the matters which are raised are really, essentially, matters which go to the evidence which is put in support of the allegations rather than to their adequacy as particulars.
Accordingly, I propose to allow the proposed amendment to the particulars to paragraph 10 in the form which has been handed up to me by the Applicant. I grant leave also in relation to the 960 patent allegations in paragraph 17 of the Statement of Claim. In relation to the 764 patent allegation at paragraph 24 of the Statement of Claim, there is a slight difference. Unlike paragraphs 10 and 17, the positive particulars for paragraph 24 do not link the documentation which is alleged to have been taken from the Respondents, to the 764 patent. However, the way in which the argument for its relevance has been developed, it seems to me that, although that relevance is perhaps a little diminished where that allegation is made, it does not mean that the allegation does not still work potentially, although perhaps not as strongly as it does in the other two. I therefore propose to allow the amendment to paragraph 24 as well.
Turning then to the Reply, the Defence which has been put on by the Respondents currently pleads at paragraph 36 and following, a long-form response to why the Applicant should not have the relief to which it claims it is entitled. The principal basis upon which that is put is that the Applicant failed to disclose, or the Applicant should have disclosed, the three patents as essential intellectual property rights to ETSI, and that is said to be a discretionary matter supporting the refusal of injunctive relief. The Applicant now says that if one gets down into that kind of debate, which would involve a weighing of discretionary considerations, it should be entitled to put into the mix, as it were, the fact that the Respondents’ employees had downloaded and taken this information from the Applicant.
On its face, that seems to me to be correct. Mr Dimitriadis submitted that I should not embrace that idea, however, because on the hypothesis at which one would have arrived at that time, it would have followed that the patents were essential to one or more of the ETSI DMR standards. That is a rather complicated debate and I do not think it is apt to be resolved in an interlocutory dispute such as the present. In those circumstances, I propose to allow the amendments to the Statement of Claim and to the Reply, and the formal order I will make is that the Applicant have leave to file the Amended Statement of Claim and Amended Reply in the form attached to the Interlocutory Application dated 4 December 2017.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 13 December 2017
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