Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Lay Opinion Evidence)
[2020] FCA 1129
•5 August 2020
FEDERAL COURT OF AUSTRALIA
Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Lay Opinion Evidence) [2020] FCA 1129
File number: NSD 1283 of 2017 Judge: PERRAM J Date of judgment: 5 August 2020 Catchwords: EVIDENCE – opinion – whether evidence lay opinion for purposes of s 78 of Evidence Act 1995 (Cth) (‘the Act’) – whether evidence can be relied upon as evidence of witness’s state of mind – relevance under s 55 of the Act Legislation: Copyright Act 1968 (Cth) s 115(4)(b)
Evidence Act 1995 (Cth) ss 55, 76, 78, 79, 136
Cases cited: Makita v Sprowles [2001] NSWCA 305; 52 NSWLR 705
Lithgow City Councilv Jackson [2011] HCA 36; 244 CLR 352
Date of hearing: 28 July 2020 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 32 Counsel for the Applicant: Mr C A Moore SC with Mr A R Lang and Ms P Arcus Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondents: Mr C Dimitriadis SC with Mr J Cooke and Mr C Burgess Solicitor for the Respondents: Shelston IP Lawyers REASONS FOR JUDGMENT
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
PERRAM J:
On 28 July 2020 objection was taken by Motorola to certain parts of the affidavit of Mr Yu Yang dated 1 December 2019 (CB5.05). On 29 July 2020 I informed the parties of the rulings. These are the reasons for those rulings. The rulings are of significance to the flow of the trial. The effect of these reasons is that I will not permit Hytera witnesses to give evidence in a conclusory form about the state of advancement of the Hytera DMR products at the relevant time. They must either give their evidence in the form of an admissible expert opinion or they must say precisely what they saw, heard or perceived.
BACKGROUND
It is necessary to begin with some background. Mr Yu Yang joined Hytera in April 2005 as a software engineer and holds a master’s degree in electronics and communications engineering. He is presently Hytera’s deputy director in the Dedicated Engineering Department. When he started in April 2005 Mr Yu Yang conducted research on the DMR standard. In around October or November 2005 he began to work on a project to develop DMR products including portables.
There is an issue in the proceeding as to when it was that Hytera would have succeeded in bringing its DMR products to market. Motorola alleges that Hytera used Motorola’s software to hasten the development of its DMR products and therefore derived benefits from its allegedly infringing conduct. The extent of any benefit derived by Hytera from its use of Motorola’s source code is legally relevant to Motorola’s claim for additional damages: Copyright Act 1968 (Cth) s 115(4)(b)(iii).
Mr Yu Yang’s evidence is, in part, directed to that issue (‘the Benefit Issue’). His evidence is that the DMR project within Hytera was well underway even without the Motorola source code. If accepted, this evidence tends to suggest that the benefit derived by Hytera from its use of Motorola’s source code is less than Motorola submits and, therefore, that any award of additional damages should be adjusted accordingly.
Mr Yu Yang also gives evidence that he was unaware that the Malaysian software engineers who had come across from Motorola and who were working on the DMR project had been copying the Motorola source code. Hytera says that this evidence (and other evidence to similar effect) is also relevant to Motorola’s case on additional damages. Its relevance is to confine the wrong-doing to the Malaysian software engineers and thereby to give a clean bill of health to the rest of the Hytera management structure (‘the Knowledge Issue’). The Knowledge Issue is legally relevant because of s 115(4)(b)(i) of the Copyright Act 1968 (Cth).
Mr Yu Yang’s evidence about the Knowledge Issue is of no relevance to the Benefit Issue and his evidence about the Benefit Issue is of no relevance to the Knowledge Issue. Whether Mr Yu Yang knew about the misadventure on which the Malaysian software engineers appear to have embarked is not logically connected to the question posed by the Benefit Issue which concerns instead the extent to which Hytera was able to hasten the development of its own DMR products. So too, the question of just how far Hytera’s development of its own DMR products had progressed, has no bearing on the extent to which Hytera management knew about the activities of its Malaysian engineers.
PARAGRAPH 6: LAST SENTENCE
The objection now raised by Motorola is to the last sentence of paragraph 6 which is as follows (emphasis added):
By September 2007, my colleagues and I working in Sun PengFei's team had conducted compatibility testing on a prototype DMR terminal that we had developed using a Motorola DMR radio that we had purchased for that purpose. At that time, our prototype DMR terminal comprised three processors (namely, a DSP, a host processor and an FPGA chip) as well as an RF unit on circuit boards. The boards were connected to an antenna unit (to exchange signals with the Motorola radio) and also connected to a personal computer. In this testing, my colleagues and I demonstrated that the prototype DMR terminal that we had developed (including the software we had written to implement the DMR protocol stack) was capable of exchanging voice and data communications with the Motorola DMR radio, in accordance with the DMR standard.
The objection is that the last sentence contains inadmissible opinion, implicit hearsay and impermissible evidence of the contents of the document. This is denied by Hytera but, if the contention is found to be correct, it then submits that the sentence should be admitted but only as evidence of Mr Yu Yang’s own belief or state of mind.
In the last sentence Mr Yu Yang says that to his knowledge the prototype DMR terminal that he and his colleagues had built had two qualities:
·It was capable of communicating with a Motorola DMR radio; and
·It did so in accordance with the DMR standard.
These both involve expressions of opinion and are therefore inadmissible under s 76 of the Evidence Act 1995 (Cth) (‘the Act’). There is an exception in s 79 for witnesses who have specialised knowledge based on the witness’s training, study or experience. It is likely that Mr Yu Yang is qualified under s 79 of the Act to express opinions on these two propositions having regard to his training and experience.
Hytera did not submit, however, that his evidence should be received as expert evidence under s 79 and that exception may be put aside. If Hytera relied upon Mr Yu Yang’s evidence as expert opinion it would fall foul of the principle in Makita v Sprowles [2001] NSWCA 305; 52 NSWLR 705. It requires that an expert opinion must explain how it is arrived at so that it can be understood and challenged. An asserted conclusion without an examinable chain of reasoning leading to it, is inadmissible. Mr Yu Yang does not engage in such a process. His evidence does not explain why the prototype DMR radio has the capability he asserts and he does not explain what he means when he says this capability was in accordance with the DMR standard.
The issue which then arises is whether Hytera can evade that prohibition by repackaging Mr Yu Yang as a lay witness. To succeed in that endeavour it is necessary for Hytera to bring Mr Yu Yang’s evidence within the principles which permit lay witnesses to give opinion evidence. Those principles are located in s 78 of the Act and permit a lay witness to give evidence of an opinion which is based on what the witness saw, heard or otherwise perceived about a matter or event but only if evidence of the opinion is ‘necessary’ to obtain an adequate account or understanding of the person’s perception of the matter or event. One example of this would be evidence that a person appeared old.
There is no evidence that Mr Yu Yang is unable to give evidence about the capability of the prototype to communicate with a Motorola DMR radio or how its actions in so communicating were in accordance with the DMR standard. Since there is no evidence to that effect, it cannot be ‘necessary’ for him to give his evidence in the form of an opinion: Lithgow City Council v Jackson [2011] HCA 36; 244 CLR 352 at 373 to 374 [48]. The perception that a digital mobile radio prototype was capable of communicating with a Motorola device in accordance with the DMR standard is not like evidence that a person is a drunk. In the absence of any evidence to the contrary, I would infer that Mr Yu Yang could explain how the prototype communicated with the Motorola device and in what sense that communication was in accordance with the DMR standard.
Having drawn that inference it follows that it cannot be ‘necessary’ for him to give evidence in the form of an opinion with the consequence that the exception in s 78 cannot be engaged.
The last sentence of [6] is therefore inadmissible under s 76 of the Act.
Next Hytera submitted that the sentence should be received as evidence of Mr Yu Yang’s state of mind. Here the argument was that Hytera was entitled to seek to prove that, the Malaysian engineers apart, Hytera was unaware that the Motorola source code was being copied (ie the Knowledge Issue). If the last sentence of [6] were received as evidence of Mr Yu Yang’s state of mind it was to be seen as relevant to that issue.
I reject this argument. The last sentence of [6] is directly relevant in the s 55 sense to the Benefit Issue but it is inadmissible for that purpose because of the opinion rule in s 76. I accept that Mr Yu Yang’s state of mind could, in principle, be relevant to the Knowledge Issue but to be so his state of mind would have to concern his knowledge of what the Malaysian engineers were doing. The last sentence of [6] has nothing to do with that issue. Proving that Mr Yu Yang believed that Hytera’s DMR project had reached a certain stage of development passes the question of whether he knew about the activities of the Malaysian engineers like ships passing in the night.
Accordingly, having rejected the last sentence of [6] as lay opinion evidence under s 78, I decline to admit it as evidence of his state of mind because it does not pass the threshold relevance requirement in s 55.
PARAGRAPH 8: WHOLE
Paragraph 8 is in these terms:
By around early 2008, my colleagues and I working under the supervision of Sun PengFei anticipated that Hytera's first DMR terminal would be ready for commercial launch around the first quarter of 2009.
The objection is that this is an inadmissible opinion. The word ‘anticipated’ may tend to cloud the paragraph somewhat but the substance of [8] is that Mr Yu Yang thought Hytera’s DMR terminal would be ready for commercial launch in the first quarter of 2009. This is opinion evidence of the same kind involved in the last sentence of [6]. I reject it for the same reasons. For the same reasons as those which obtain in the case of the last sentence of [6], I decline to admit it as evidence of his state of mind.
PARAGRAPH 18: FIRST AND LAST SENTENCE
Paragraph 18 which is as follows (emphasis added):
Around July 2008, an announcement was made within Hytera that the FPGA chip would be removed from the design for Hytera's DMR subscriber units. It was my understanding at that time that this decision had been made by the Malaysian engineers. Based on that announcement, I understood that the Malaysian engineers' reasons for removing the FPGA chip from Hytera's DMR terminal design included to reduce the costs of, and reduce power consumption by, those devices.
The objection to the first sentence was that it was hearsay. I do not accept this submission. A person who perceives an announcement may give evidence that there was an announcement and this does not involve hearsay unless it is led to prove the truth of the announcement. However, the first sentence of [18] does not do this. I admit the first sentence.
If the last sentence were to the effect that Mr Yu Yang understood that the reasons the Malaysian engineers wished to remove the FPGA chip was because of cost and power consumption it would be inadmissible (subject to an argument of Hytera’s to which I will shortly come). Mr Yu Yang’s understanding is not relevant to any fact in issue. Does it become more admissible because it was ‘based on that announcement’? It seems to me that the only way those words add anything to the relevance of Mr Yu Yang’s understanding is by means of the proposition that the understanding reflected what had been said in the announcement or had been derived from it. Consequently, the evidence involves the witness in giving evidence about something said by another person in the announcement. A third party statement is therefore by this method secreted within the sentence.
It does not follow that the evidence is hearsay. For example, it might be that the relevance of the material was not the fact that the removal of the FPGA chip was for reasons of cost and power consumption. It may instead be to the fact that the Malaysian engineers were saying this. Whether it was admissible on that basis would depend on whether what the Malaysian engineers were saying, as opposed to the truth of what they were saying, was relevant to an issue in the proceeding. I did not apprehend, however, on the hearing of the present argument that Hytera was contending that the last sentence was relevant for that kind of non-hearsay purpose.
Hytera did submit that the sentence was admissible to prove Mr Yu Yang’s state of mind. This is a different non-hearsay use to the one just discussed. As I understood the argument it went as follows: The Malaysian engineers misled the rest of Hytera by concealing their true reason for removing the FPGA chip. In truth, it was not for reasons of cost or power consumption but for some other reason. The fact that Mr Yu Yang believed that the FPGA chip had been removed because of concerns about cost and power consumption showed that he could not have been aware of what the Malaysian engineers were doing.
I accept that this is relevant within the meaning of s 55 of the Act. Consequently I will admit the last sentence of [18] but confine it pursuant to s 136 so that it is only evidence of what Mr Yu Yang thought and not the truth of what he thought.
PARAGRAPH 19: FIRST SENTENCE
Paragraph 19 is as follows (emphasis added):
As of July 2008, and subsequently, I understood the Malaysian engineers' reasoning that removing the FPGA chip from the design for Hytera's DMR terminals would reduce costs and reduce power consumption. On the other hand, I considered that a disadvantage of removing the FPGA chip from Hytera's DMR terminal design was that those products would require more time, and more human resources, to develop, delaying their launch.
I will admit this on the same basis as the last sentence of [18] as evidence of Mr Yu Yang’s state of mind and I will direct pursuant to s 136 of the Act that it not be used for any other purpose.
PARAGRAPH 22: WHOLE
Paragraph 22 is as follows:
Because of the Malaysian engineers' decision to remove the FPGA chip from Hytera's DMR terminal design, the launch of Hytera's first DMR products was delayed until March 2010, which was approximately one year later than had been planned when Sun PengFei was leader of the DMR Project.
The objection was that this was opinion evidence. I accept this submission. Mr Yu Yang is expressing the view that but for the removal of the FPGA chip the Hytera product would have been ready in around March 2009. For the reasons I have already given this is opinion evidence and inadmissible under s 76 of the Act in circumstances where Hytera does not – and could not – submit that it was admissible expert opinion under s 79. For the reasons I have already given it is not admissible as lay opinion evidence under s 78 and it is not admissible as evidence as to his state of mind. That Mr Yu Yang thought the Hytera product would be ready in March 2009 does not bear on whether he knew about the activities of the Malaysian engineers.
PARAGRAPH 24: FIFTH AND SIXTH SENTENCE
Paragraph 24 is as follows (emphasis added):
When I learned of Motorola's claims, I was in a state of disbelief. During my time working with the Malaysian engineers on Hytera's DMR Project, I had thought that the Malaysian engineers were capable and professional. I could not understand why any of the Malaysian engineers would have taken Motorola code and made use of it at Hytera. Apart from being very wrong, in my view there was no need to have used any Motorola code in the development of Hytera's DMR products. As I have explained in section A, above, the development of the software required for Hytera's DMR products was already well advanced by the time that the Malaysian engineers joined Hytera. By that time, I and the other software engineers who had worked on the DMR Project under the supervision of Sun PengFei had developed a protocol stack which successfully implemented core functions of tier 2 of the DMR standard. While a number of tasks remained to complete the software required for Hytera's first DMR products, in my view those tasks were more straightforward than developing the protocol stack itself. I considered that, by early 2008, the main challenges that needed to be addressed in developing software for Hytera's first DMR products had already been overcome.
The objection was that the evidence was inadmissible opinion under s 76. I accept this submission for the reasons I have given above. I decline to admit either sentence as evidence of Mr Yu Yang’s state of mind for the reasons stated above.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 5 August 2020
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