FEDERAL COURT OF AUSTRALIA

Attachmate Corporation v Commonwealth of Australia (No 2) [2014] FCA 853

THE COURT ORDERS THAT:

1.    The parties to provide short minutes of order to give effect to these reasons within seven days hereof.

2.    The matter be listed for directions on 21 October 2014 at 9:30 am.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The Commonwealth seeks further discovery from Attachmate. The background to the litigation is explained in Attachmate Corporation v Commonwealth (No 1) [2013] FCA 896 and these reasons assume a familiarity with those reasons.

2    The Commonwealth seeks discovery of 11 further categories. Treating them in order:

Category 1 – ‘All Attachmate Australia Price Lists that include any of the Extra products from January 1999 to date’.

3    Attachmate has agreed to provide documents falling within this category.

Category 2 – ‘All device based licence agreements or terms of supply for the Extra and/or e-Vantage software relating to approximately 12,000 or more units of that software throughout the world from January 1999 to date.’

Category 3 – ‘All user based licence agreements or terms of supply for the Extra and/or e-Vantage software relating to approximately 8,000 or more units of that software throughout the world from January 1999 to date.’

Category 4 – ‘All enterprise site licence agreements or terms of supply for the Extra and/or e-Vantage software throughout the world from January 1999 to date.’

4    Attachmate has agreed to provide the documents in categories 2-4 but only in relation to Australia.

5    The Commonwealth has retained Mr Napper to give expert evidence on the issue of the quantum of damages. By an affidavit dated 28 February 2014 Mr Napper indicated categories of documents that might, as he put it in a later letter of 6 May 2014, ‘add value to my analysis of a hypothetical license price and structure in this matter’.

6    In his letter of 6 May 2014 Mr Napper indicated that he believed that he needed access to the worldwide material and not just the Australian material because:

    he had seen no evidence to suggest that Attachmate priced its software differently internationally as opposed to Australia;

    the Extra! Software was not region specific;

    Attachmate’s licensing approach to client’s such as Defence would be more apparent looking at a global picture (i.e., there is only one Department of Defence in Australia, but there are many such departments overseas); and

    overseas experience would also show how Attachmate approached pricing of one type of customer (i.e., governments) as opposed to another (i.e., corporates).

7    I accept that these materials are sufficiently relevant for discovery purposes. I reject the contention that the reference to ‘Extra’ and ‘e-Vantage’ makes the claim too broad because these include products other than ‘e-Vantage Enterprise Client Access License 2.1’ and a component within it, ‘Extra Personal Client 6.5’ (the items involved in this case). They are all terminal emulation products and may well provide suitable comparators for the estimation process.

8    Attachmate submitted that it would be onerous for it to be required to search for this material. The evidence does not sustain that proposition. It maintained a transaction database back to 1997. This database does not contain the terms on which the products were kept although it did have a field for licence type. The actual licences are kept in a separate database in the legal department by customer name. This database is, however, incomplete because of the actions of two former employees. It will be, therefore, necessary to search the two employees’ email accounts too.

9    I reject the submission that this is too hard for Attachmate to do. It claims a very substantial sum in these proceedings. The required search process does not appear too onerous in view of the claim made.

10    In relation to category 4, Attachmate submitted that it could not interrogate its database in a way which would reveal whether any particular customer was ‘enterprise wide’. The evidence did not suggest that a manual search could not be done. The category will be discovered.

Category 5 – ‘All concurrent user based licence agreements or terms of supply for the Extra and/or e-Vantage software throughout the world from January 1999 to date.’

11    I accept this category’s relevance. Attachmate says that interrogating its database may not return very much on this issue. Attachmate does not say that it cannot have someone examine these issues manually or give any estimate of the costs of doing so. Discovery of this category will be granted.

Category 6

12    Category 6 was not pressed.

Category 7 – ‘The 1997 licence agreement between Attachmate and the Royal Australian Air Force.’

13    Attachmate agreed to give discovery of this category.

Category 8 – ‘All information and documents relating to royalty amounts paid by Attachmate to third parties in relation to the Extra software.’

14    Attachmate denied that this was relevant and submitted that because of a seven year document retention policy any search was likely to be unfruitful. I do not agree with the former and the latter is no reason not to grant discovery.

Category 9 – ‘All approved FASTPATH Forms (or equivalent documents) submitted by Attachmate Australia sales representatives from January 1999 to date.’

15    The debate here was whether this category should be limited to Attachmate’s narrower range of products. For reasons already given, it should not.

Category 10 – ‘All FASTPATH Consulting Addendums relating to the Defence Account.’

16    Attachmate agreed to give discovery of this category.

Category 11 – ‘Licence agreements executed by Attachmate or Attachmate Australia that include or included consulting services as part of the agreement.’

17    I am satisfied that this category is relevant to the process of ascertaining quantum. Attachmate’s expert thought that the licence in issue was significantly below market value because of consulting revenue. The Commonwealth is entitled to examine Attachmate’s consulting practices.

An affidavit of searches performed?

18    The Commonwealth submits that in light of Attachmate’s position on the present application as to what steps it has taken or will take, it should be ordered to file an affidavit setting out the electronic searches it ultimately carries out. In particular, it is submitted that the affidavit should explain:

(a)    the name and nature of each electronic database available to be searched;

(b)    the name of each electronic database in fact searched;

(c)    whether all the documents contained in each electronic database were word searchable and, if not, what steps if any were taken to make them so;

(d)    the search methodology employed for each electronic database including software used, search terms used and results of searches; and

(e)    the results of any hard copy searches instigated by the results of the electronic database searches.

19    I accept this submission. The filing of an affidavit of this kind will indicate whether Attachmate has conducted reasonable searches. Attachmate is to file such an affidavit within seven days of the completion of the discovery process.

Conclusion

20    The parties are to being in agreed short minutes of order to give effect to these reasons within seven days. Attachmate should pay the Commonwealth’s costs.

Associate:

Dated:    14 August 2014