Quanta Software International Pty Ltd v Computer Management Services Pty Ltd

Link copied
Case Copied 24 min read

FEDERAL COURT OF AUSTRALIA

Quanta Software International Pty Ltd v Computer Management Services Pty Ltd [2000] FCA 969

PRACTICE AND PROCEDURE – preliminary discovery – applicant distributor of software – respondent licensee of applicant – whether reasonable cause to believe applicant may have right to obtain relief in the Court for infringement of copyright – whether applicant made all reasonable inquiries by making requests of the respondent.

Evidence Act 1995 (Cth), Dictionary.
Copyright Act 1968 (Cth), ss 115, 119, 131C.

Federal Court Rules, O 15A r 6; O 1 r 4.

Hooper v Kirella Pty Ltd (1999) 96 FCR 1, cited.
W R Pateman Pty Ltd v Walker Corp Pty Ltd [1990] ATPR 41-106, cited.
London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932, cited.
Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (unreported, 24 May 1996, Lindgren J), cited.
Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728, cited.

QUANTA SOFTWARE INTERNATIONAL PTY LTD v COMPUTER MANAGEMENT SERVICES PTY LTD
N 516 of 2000

SACKVILLE J
21 JULY 2000
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 516 OF 2000

BETWEEN:

QUANTA SOFTWARE INTERNATIONAL PTY LIMITED
APPLICANT

AND:

COMPUTER MANAGEMENT SERVICES PTY LIMITED
RESPONDENT

JUDGE:

SACKVILLE J

DATE OF ORDER:

21 JULY 2000

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The respondent give verified discovery by 2 August 2000 of such of the following documents as are within its custody, possession or power:

(a)       all contracts relating to

(i)        UNISON software; or

(ii)any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules,

entered into during the period of three years preceding the date of these orders; and

(b)       all source codes in the possession of the respondent relating to

(i)        UNISON software; or

(ii)any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules.

“Document” has the meaning it bears in FCR O 15A r 6.

2.Subject to par 3, inspection of the documents referred to in par 1 shall take place within fourteen days of the date verified discovery is given by the respondent.

3.Inspection by the applicant of the documents referred to in par 1 shall be given subject to the following conditions:

(a)no more than two (2) copies of such documents or things shall be made without further order of the Court;

(b)access to the originals or copies of such documents will be confined to the following persons: Simon Allison and Andrew Clements of the applicant; the applicant’s legal representative, Terence Lee; and the applicant’s appointed expert, Graeme Harrison;

(c)access will be granted to each person named in sub-par (b) only upon each such person giving an undertaking in writing addressed to the respondent’s solicitors, or giving an undertaking to the Court, in the following terms:

(i)No further copies shall be taken of the copy documents or things provided, except with the written agreement of the respondent’s solicitors…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Quanta Software International Pty Ltd v Computer Management... and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2000] FCA 969
Decision Date

CaseChat Overview and Summary

In the case of Quanta Software International Pty Ltd v Computer Management Services Pty Ltd, the applicant sought an order for the respondent to make discovery of certain documents and source codes related to the distribution and use of the EUNICE software. The applicant alleged that the respondent had infringed the applicant's copyright by distributing the EUNICE software without permission. The court was required to determine whether the applicant had satisfied the requirements of FCR, O 15A r 6 to obtain the discovery order and whether any discretionary considerations should be taken into account. The court found that the applicant had made reasonable inquiries and had insufficient information relating to the quantum of its claim to make a decision whether to commence proceedings. The court also found that the applicant had allowed sufficient time for the respondent to respond to the request and that the application was not framed too broadly. The court made an order for the respondent to make discovery of certain documents and source codes within a specified timeframe and subject to certain conditions, including that the documents be inspected only by certain persons and that the contents be kept confidential. The court also ordered that the respondent pay fifty per cent of the applicant's costs of the application.
The court's decision provides guidance on the use of FCR, O 15A r 6 to obtain discovery of documents and source codes in cases of alleged copyright infringement. The court found that the applicant had satisfied the requirements of the rule and that the discovery order should be limited to the narrower categories specified in the alternative orders. The court also found that the respondent had not provided evidence to support a form of order which would provide that any documents produced by the respondent should be inspected only by an independent expert. The court's decision also highlights the importance of allowing sufficient time for the respondent to respond to a request for discovery and the need to consider discretionary considerations when making a discovery order.

Orders

Orders of the court

1. The respondent give verified discovery by 2 August 2000 of such of the following documents as are within its custody, possession or power:

(a) all contracts relating to

(i) UNISON software; or

(ii) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules,

entered into during the period of three years preceding the date of these orders; and

(b) all source codes in the possession of the respondent relating to

(i) UNISON software; or

(ii) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules.

“Document” has the meaning it bears in FCR O 15A r 6.

2. Subject to par 3, inspection of the documents referred to in par 1 shall take place within fourteen days of the date verified discovery is given by the respondent.

3. Inspection by the applicant of the documents referred to in par 1 shall be given subject to the following conditions:

(a) no more than two (2) copies of such documents or things shall be made without further order of the Court;

(b) access to the originals or copies of such documents will be confined to the following persons: Simon Allison and Andrew Clements of the applicant; the applicant’s legal representative, Terence Lee; and the applicant’s appointed expert, Graeme Harrison;

(c) access will be granted to each person named in sub-par (b) only upon each such person giving an undertaking in writing addressed to the respondent’s solicitors, or giving an undertaking to the Court, in the following terms:

(i) No further copies shall be taken of the copy documents or things provided, except with the written agreement of the respondent’s solicitors or further order of the Court.

(ii) The contents of the documents and things shall be kept confidential and not disclosed to any other person other than a person named in sub-par (b) without leave of the Court.

(iii) The information provided shall be used solely for the purposes of

(A) forming an opinion as to whether the respondent infringed the applicant’s asserted copyright in EUNICE software; and/or

(B) instituting and conducting proceedings against the respondent in respect of infringement of the applicant’s asserted copyright in EUNICE software.

(iv) Subject to any further order of the Court, all copies of documents and/or copies taken of the contents of such documents shall be delivered to the respondent’s solicitors at the conclusion of any proceedings initiated by the applicant against the Respondent following this discovery, or within thirty (30) days of inspection should there be no such proceedings initiated by the Applicant within that time.

4. Liberty to apply on 72 hours notice.

5. The respondent pay fifty per cent of the applicant’s costs of the application, as agreed or taxed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The word “document” is defined to include any record of any information which is a document within the definition contained in the Dictionary to the Evidence Act 1995 (Cth) and any other material, data or information stored or recorded by mechanical or electronic means: FCR, O 1 r 4. It follows that the Court has power pursuant to O 15A r 6 to order that a person make discovery of an electronic record of information, or indeed anything from which sounds, images or writings can be reproduced with or without the aid of anything else: see par (c) of the definition of “document” in Part 1 of the Dictionary to the Evidence Act.The Evidence The applicant filed two affidavits in advance of the hearing. Both were sworn by Mr Allison, the applicant’s Company Secretary. These affidavits were duly read. Mr Allison was not cross-examined on them. The respondent filed no evidence in advance of the hearing. At the hearing itself, however, Mr Gelbart sought leave to file and read an affidavit by Mr Morton, an officer of the respondent. The main point of Mr Morton’s affidavit was to authenticate a letter dated 18 July 1996 which, according to Mr Gelbart, constituted a licence by the applicant to the respondent to use the EUNICE software as part of the respondent’s software. Mr Lee initially objected to Mr Morton’s affidavit being read on the ground that it had been filed late and required an answer. Ultimately Mr Lee withdrew his objection. He did so on the basis that he would be permitted to read a further affidavit from Mr Allison explaining the context in which the letter had been written and to tender additional correspondence. In the result, the affidavits of Mr Morton and Mr Allison were both filed in Court and read. The additional correspondence was admitted into evidence. Neither Mr Morton nor Mr Allison was cross-examined on the affidavits filed in Court.The Course of Events By an “Exclusive Perpetual Software License Agreement” dated 2 February 1991, between Quanta Holdings Ltd, a New Zealand company, and the applicant, the latter was granted an exclusive perpetual licence to use, copy, publish, translate and sub-licence rights to the EUNICE software system, with respect to all countries other than New Zealand. By a Dealer Agreement dated 12 November 1992, the applicant appointed the respondent a non-exclusive “Dealer of Licensed Programs” upon the terms and conditions specified therein (cl 2). The term “Licensed Program” was defined to mean: “The computer software specified in Schedule 1 together with such other computer software as are from time to time made available or supplied by [the applicant] to the [respondent] pursuant to the terms of this Agreement but excluding such computer software as may be notified by [the applicant] to the [respondent] from time to time” (cl 1.2.2).Clause 8.1 of the Dealer Agreement provided as follows:“Development Code purchased by [the respondent] must only be used for Development Purposes”.“Development Code” was defined to mean“the source computer programs from which the licensed programs are derived”.“Development Purposes” was defined to mean“modify, enhance or add to the functionality of a licensed program already supplied to an end user”.The Dealer Agreement could be terminated on written notice by the applicant, effective immediately in the event of the respondent breaching the agreement and failing to remedy the breach within fourteen days after written notice thereof (cl 13.4(i)).

Decision

Reasons for decision

SACKVILLE J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: SACKVILLE J

None of this is intended to imply that FCR O 15A r 6 can be used as a matter of course to obtain preliminary discovery of documents relevant to the quantum of a particular claim. Each case must depend on its own circumstances. There may be cases, however, in which an applicant, after making the reasonable inquiries, has insufficient information relating to quantum to enable it to make a decision whether to commence a proceeding in the Court. In such instances the requirements of O 15A r 6(b) may well be satisfied.Discretionary Considerations The respondent argued that it had been given insufficient time to respond to the request made by the applicant. As events transpired, sixteen days elapsed between the initial request (3 May 2000) and the commencement of proceedings (19 May 2000). I think that this was sufficient time for the respondent to formulate a considered response to the request. Even if the period allowed by the applicant were unreasonably short, I would not necessarily regard that as a ground for withholding relief to which the applicant was otherwise entitled, although the failure to allow sufficient time might have been relevant to costs. As I have indicated, the applicant in effect conceded its application was framed too broadly. Mr Lee did not argue in support of pars 1 and 3 of the categories of documents identified in the schedule to the application. I think that orders should be limited to the narrower categories specified in the alternative orders reproduced earlier in this judgment, subject to one qualification. It does not seem to me to be necessary or appropriate for the applicant to have access to contracts between the respondent and its customers going back six years. Three years is an adequate period to allow the applicant to ascertain whether the respondent’s contracts with its users contemplate infringement of copyright and, if so, whether this occurred on a substantial scale. In my opinion, contrary to the respondent’s submissions, the evidence does not support a form of order which would provide that any documents produced by the respondent should be inspected only by an independent expert. That course was adopted by Burchett J in Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728, at 734, but his Honour did so in consequence of an agreement between the parties. Here the respondent adduced no evidence as to the confidential nature of its records. While I am prepared to infer from the fact that it produces and distributes software that it is entitled to some protection, I do not think that a stringent order of the kind proposed by Mr Gelbart is appropriate. Finally, the respondent argued that it should be required only to make discovery of printed versions of the source codes, and not the electronic versions. In the absence of evidence supporting such a limitation, I am not prepared to restrict the order for discovery in this manner.Costs The respondent argued that the applicant should pay the respondent’s costs of furnishing discovery in accordance with the orders of the Court. Such an order is sometimes made (see W R Pateman Pty Ltd v Walker Corporation Pty Ltd, at 51,300). In my opinion, however, there is nothing in the present circumstances that warrants such an order. There is no evidence, for example, that compliance with the orders will be especially costly or inconvenient. Moreover, the applicant has established that it is entitled to inspect the documents, having satisfied the requirements of FCR, O 15A r 6 and overcome any objections on discretionary grounds.