FEDERAL COURT OF AUSTRALIA

Upaid Systems Ltd v Telstra Corporation Ltd (No 2) [2014] FCA 1377

THE COURT ORDERS THAT:

1.    Pursuant to s 17(2) of the Federal Court of Australia Act 1976 (Cth) and r 1.36 of the Federal Court Rules 2011 (Cth), the reasons for making Order 2 be published from Chambers.

2.    By no later than 4.00 pm on 18 December 2014, the parties are to bring in agreed draft orders giving effect to these reasons and providing for any other step required to be undertaken to bring the matter to readiness for the hearing of the respondent’s interlocutory application commencing on 11 March 2015.

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

REASONS FOR JUDGMENT

1    The applicant, Upaid Systems Ltd (Upaid), has alleged that the respondent, Telstra Corporation Ltd (Telstra), has infringed a number of claims of Patent No. 2008203853 (the 853 patent) and Patent No. 770646 (the 646 patent). Telstra has filed an interlocutory application seeking, amongst other things, summary dismissal of that part of Upaid’s case concerning the alleged infringement of claim 1 of each patent on the ground that Upaid has no reasonable prospect of successfully prosecuting that case: s 31A Federal Court of Australia Act 1976 (Cth). The hearing of that application has been listed for three days commencing on 11 March 2015.

2    At a directions hearing on 13 November 2014, Upaid raised its desire to obtain discovery from, and to interrogate, Telstra for the purpose of that application. At that time, I made directions for the service by Upaid of draft categories for discovery and draft interrogatories. This has resulted in some measure of agreement between the parties as to the appropriateness of some discovery being given and some interrogatories being administered, and for the leave of the Court to be granted accordingly.

3    In this connection, the parties have reached agreement in relation to categories 1 and 6 for discovery, and the following interrogatories: 2(b), 4(a)-(f), 5(a), 5(c)-(f), 6(a), 7(a), 8(d), 8(h)-(l) (in an amended form), 9(a)-(c), 9(l), 9(o)-(q), 10(a)-(b), 12(b)-(e), 14(b)-(c), 15(c)-(d), 16(a)-(b), 21(a)-(b), 23(a)-(b), 25(a), 26(a)-(c), 27(a)-(h), 31(a)-(e), 35(a), 37(a)-(d), 37(f)-(g) and 38(a)-(b).

4    Further, the parties have agreed that leave should be granted to administer the following interrogatories subject to Telstra making what the parties have termed the “System objection”: 1(a)-(b), 9(f)-(i), 19(a)-(b), 22(b)(iii), 25(b), 31(f)-(g), 32(f), 37(k) and 38(e). It is not necessary for me to detail the nature of the “System objection” in these reasons.

5    I should also record that Upaid no longer seeks leave to administer the following interrogatories: 11(a), 18(a)-(e), 29(c)-(e), 33(c)-(d) and 38(c).

6    In Upaid Systems Ltd v Telstra Corporation Ltd (2013) 220 FCR 182 at [9]-[25], I set out some background to Upaid’s claims when considering the adequacy of the particulars of infringement that it had, by that time, provided. I found that the statement of particulars was inadequate and should be struck out. I ordered Upaid to file an amended statement of particulars by 28 February 2014. As events transpired, the amended statement of particulars was only filed on 5 November 2014 pursuant to leave granted by me on 3 November 2014. The amended statement of particulars (which, for convenience, I will call the statement of particulars) is 171 pages in length. The reason for the delay in filing it was because there was much toing and froing between the parties about the adequacy of the particulars in that form. The adequacy of the particulars is still a matter of significant dispute between the parties and stands as another reason why Telstra argues that Upaid’s claim, at least so far as it concerns the alleged infringement of claim 1 of each patent, should be summarily dismissed.

7    Telstra has filed affidavit evidence in support of its application for summary dismissal. In these affidavits, Telstra advances a number of factual contentions as to why Upaid’s allegations of infringement in respect of claim 1 of each patent cannot be sustained.

8    Upaid argues that, in dealing with Telstra’s application for summary dismissal, it will advance a number of factual contentions which will include contentions based on inference. It wishes to bolster that part of its case by the discovery it now seeks and by the answers to interrogatories it wishes to administer.

9    Telstra’s objections to leave being granted in respect of the disputed categories of documents and disputed interrogatories centre on questions of relevance and matters of scope.

Discovery

Preliminary observations

10    Upaid has not as yet filed affidavit evidence in respect of Telstra’s interlocutory application. It resisted doing so at the directions hearing on 3 November 2014. Nevertheless, Upaid must be taken as having evidence of Telstra’s alleged infringements that would justify it commencing the present proceeding. Indeed, it has been able to provide the statement of particulars which, as I have observed, is 171 pages in length. The statement of particulars is obviously a document that has been produced after much consideration by Upaid and its legal advisers. The present proceeding was not preceded by any application for preliminary discovery.

11    It is trite that a party to a proceeding in this Court does not have a right to discovery. An applicant should not, therefore, commence a proceeding in the expectation that the Court will make an order for discovery as a matter of course. Proceedings commenced for patent infringement do not stand in some special position in that regard.

12    Discovery will only be ordered where a suitable application for discovery is made and where an order for discovery will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible: see r 20.11 Federal Court Rules 2011 (Cth). The agreement of the parties to give discovery is not a decisive factor, as r 20.12 recognises.

13    The resolution of which r 20.11 speaks in the present case is the resolution of Telstra’s interlocutory application, which, on one limb, will only succeed if Telstra can satisfy the Court that Upaid has no reasonable prospect of successfully prosecuting that part of the proceeding to which Telstra’s application is directed, namely the alleged infringements of claim 1 of each patent.

14    The present application for discovery is not made in the context of the trial of the action or of the determination of a separate question. It is sought by Upaid to assist it in resisting Telstra’s application for summary dismissal – in other words, to assist Upaid to positively demonstrate that it has a case that has sufficient prospects of being successfully prosecuted. One might have thought that such a case could be demonstrated without the need for any extensive discovery or, indeed, for discovery at all. As I remarked at the directions hearing on 3 November 2014, one would think that the role for discovery in the present circumstances must be limited.

15    As a general rule, the Court will not grant an application for discovery where to do so would permit “fishing” in the sense explained in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 at 254; see also in this regard the observations of Lockhart J in W A Pines Pty Ltd v Bannerman (1980) 30 ALR 559 at 574-576. Thus, the Court will not order discovery simply to allow a party to “fish” for evidence to support a claim or a defence which is, essentially, speculative in nature.

16    It is also noteworthy that Upaid has not relied on evidence specifically directed to supporting the discovery it seeks. Thus, where there is a contest between the parties, particularly as to the scope of the documents sought, Upaid has relied, substantially, on argument, not evidence, to seek to persuade the Court that the discovery it wants should be granted.

The categories

17    Eight categories of documents have been sought. Two categories (categories 1 and 6) are agreed. Category 1 concerns certain agreements relating to the provision of MOG Services. MOG is a subscription service that provides music streaming. Category 6 concerns “interface specifications and architecture/solution definition documents” relating to certain described interface communications or notifications.

18    The categories in dispute are categories 2, 3, 4, 5, 7 and 8 which, with currently agreed amendments, are as follows:

2    All Documents recording or evidencing:

(a)    any agreement between Telstra and a Financial Provider; or

(b)    any procedures or protocols,

relating to authorising, charging, verification or settling transactions involving:

(i)     a User or Users who purchase, subscribe to or use MOG Services;

(ii)     Daisy, LLC or any other party involved in the provision of MOG Services;

(c)    the payment of a Telstra bill by a User subscribed to a Post-Paid service;

(d)    the purchase of a Pre-Paid Credit.

3    All Documents recording or evidencing any interface, communication, notification, functionality, exception handling, transaction record, reconciliation method, process, rule or procedure relating to MOG Services, between any or all of:

(a)     the BigPond Music Platform and the MOG Platform, as described in paragraphs 11 and 16 of the Verhein Affidavit;

(b)     the SDF and ESS, as described in paragraph 9 of the Thiruvengadam Affidavit;

(c)     the SDF and BigPond Music Platform, as described in paragraph 8 of the Thiruvengadam Affidavit;

(d)     ESS and ONDB, as described in paragraph 9 of the Loader Affidavit;

(e)    ONDB and each of the Billing Systems, as described in paragraphs 11 and 12 of the Wong Affidavit;

(f)     each of the Billing Systems and BigPond Music Platform, as described in paragraph 16 of the Verhein Affidavit, paragraph 10 of the Loader Affidavit, paragraph 11 of the Pickering Affidavit and paragraph 9 of the Thiruvengadam Affidavit;

(g)    the Billpay System and BigPond Music Platform, as described in paragraph 22 of the Verhein Affidavit;

(h)    the Systems mentioned in the Process of Purchasing MOG Flowchart and the Systems in Telstra’s Communications Network;

(i)    the Billpay System and each of the Billing Systems,

whether or not those interfaces, communications, notifications, functionalities, exception handlings, transaction records, reconciliation methods, processes, rules or procedures, occur via another System or Systems.

4    Documents recording or evidencing any interface, communication or notification between the BillPay System and any Financial Provider, as described in paragraph 13 of the Arora Affidavit and paragraph 17 of the Pickering Affidavit, whether or not that interface, communication or notification occurs via another System or Systems.

5    Documents recording or evidencing the means or process by which any System determines whether or not to meter a data session relating to the purchase, subscription or use of MOG services.

…

7    All Documents recording or evidencing any interface, communication or notification between any System and any Financial Provider’s System relating to any or all of:

    (a)    the purchase of or subscription to a MOG Service;

    (b)    the payment of a bill by a User subscribed to a Post-Pay Service Plan; or

    (c)    the purchase of Pre-Paid Credit.

8    All Documents recording or evidencing the means or process by which Telstra determines credit card and transaction processing fees payable in relation to:

    (a)    the purchase of, subscription to or use of MOG Services;

    (b)    the payment of a bill by a User subscribed to a Post-Paid Service Plan; or

    (c)    the purchase of Pre-Paid Credit.

Telstra’s position

19    In relation to category 2(b), Telstra submits that the documents should be “interface specifications and architecture/solution definition documents”. It submits, in effect, that the description “any procedures or protocols” is vague and unclear.

20    I have been taken to a description of the kinds of documents covered by the expression “interface specifications and architecture/solution definition documents”. The documents are said to include a description of the business requirements and solution for Telstra’s BigPond Music platform in relation to the purchase of a MOG subscription using a Telstra mobile account, including, for example, user interaction flow, and changes required to Telstra’s “network, charging, billing and accounting systems”. Documents of this nature also include those which are said to describe the BigPond Music “platform architecture, interfaces, functional requirements, content delivery mechanisms, account management and billing features”.

21    Telstra has already provided a number of documents of this nature to Upaid. There may be other such documents, which Telstra has agreed to provide by way of discovery.

22    In relation to categories 2(c) and (d), Telstra submits that the description of the documents should be qualified by the addition, in each case, of the words “by credit card using Telstra’s on-line service at www.Telstra.com.au/myaccount”.

23    In relation to category 3, Telstra submits that, once again, the documents should be “interface specifications and architecture/solution definition documents”. It also submits that the documents should be those “relating to the purchase of a MOG subscription by a User”. Further, it objects to the rider “whether or not those interfaces, communications, notifications, functionalities, exception handlings, transaction records, reconciliation methods, processes, rules or procedures, occur via another System or Systems”. It submits that this rider is unnecessary because there are interrogatories directed to whether there are other systems involved in the relevant processes. Telstra also objects to category 3(h) in its entirety. It submits that it is not relevant to any pleaded issue.

24    Telstra’s objections to the category 4 documents are similar to those arising in relation to the category 3 documents. In particular, it submits that the documents should be confined to relevant “interface specifications and architecture/solution definition documents”. It also submits that the category should not be qualified by the rider “whether or not that interface, communication or notification occurs via another System or Systems”.

25    With respect to category 5, Telstra submits that the documents should be “interface specifications and architecture/solution definition documents” relating to the means or processes by which any system determines whether or not to meter a data session relating to the purchase, subscription or use of MOG services.

26    With respect to category 7, Telstra submits that these documents are redundant in light of the category 2 documents.

27    With respect to the category 8 documents, Telstra objects to these documents to the extent that they travel beyond the category 2 documents. It submits that the category is irrelevant as “credit card and transaction processing fees” are not relevant to the pleaded case.

Consideration

28    With respect to category 2(b), Upaid submits that documents limited to “interface specifications and architecture/solution definition documents” will not provide all details of the transaction chain, specifically, the information exchanged in relation to the transactions involving users who purchase, subscribe to or use MOG Services, and Daisy, LLC (which provides MOG) or any other party involved in providing MOG Services.

29    There is no dispute about the relevance of the documents being sought, only whether the documents in this category should be as Telstra has described them or as Upaid has described them. It is not clear to me what the words “procedures” or “protocols” would add to the general description “interface specifications and architecture/solution definition documents”. I would expect that Telstra’s description of “interface specifications and architecture/solution definition documents” would itself cover the subject matter specified in category 2(b) to the extent required to address the level of generality at which the methods claimed in claim 1 of each patent have been expressed.

30    I am not persuaded, therefore, that Upaid’s description usefully adds to Telstra’s description, for relevant purposes. I also bear in mind that Upaid seeks to interrogate on the subject matter of this category. Therefore, the category 2(b) documents should be for “interface specifications and architecture/solution definition documents” relating to the described subject matter.

31    With respect to categories 2(c) and (d), Upaid accepts Telstra’s qualification, with the further qualification that the payment or purchase referred to should be extended to payment or purchase by debit card or via an application on a mobile device or handset. I am not persuaded that, in these categories, the further qualification should be made. In its pleaded case, Upaid draws no distinction between debit and credit card facilities provided by financial providers or payments or purchases made via an application or a mobile device or handset. Therefore, the category should be confined as Telstra submits in this regard.

32    With respect to category 3, Upaid submits that documents described as “interface specifications and architecture/solution definition documents” will not provide sufficient information. It submits that such documents will not provide details of “the end-to-end functionalities of Telstra’s systems” and how they operate from a network point of view as opposed to a user-interface point of view.

33    It is not clear to me why this is so. Upaid’s submission is not supported by any technical (or, indeed, other) evidence explaining why “interface specifications and architectural/solution definition documents” will not provide adequate discovery, seen, once again, against the generality in which claim 1 of each patent is expressed, but also against the evidence proposed to be given by Telstra’s witnesses on this subject (which, at this stage, Upaid has not sought to answer), and the interrogatories that Upaid seeks to administer. It seems to me that Upaid’s requested category is in the nature of “fishing”.

34    Moreover, the words “All Documents recording or evidencing …” are problematic when sought to be applied to “any interface, communication, notification, functionality, exception handling, transaction record, reconciliation method, process, rule or procedure …” relating to the particular subject matter identified in category 3. The words “recording or evidencing” are of great breadth and no proper foundation has been laid for discovery of that breadth. In oral submissions, Upaid suggested that the words “recording or evidencing” could be replaced with “describing”. I would expect that this substitution would certainly cut down the number of documents that might be caught, but, even so, I am unpersuaded that the discovery which Telstra has proposed is inadequate or that Upaid has laid any proper foundation for any broader discovery. Therefore, category 3 should be for “interface specifications and architecture/solution definition documents”.

35    Upaid accepts that the category 3 documents should relate to the purchase of a MOG subscription. However, it submits that the category should also include “the use of MOG Services”. It says that this should be so because, with respect to the infringement of claim 1 of the 646 patent, it has particularised three types of infringement (types 1, 4 and 5) in respect of which it has alleged that Telstra has adjusted an associated user account for usage charges associated with the request and provision of a product, using rating engines for dynamically calculating usage charges. This allegation relates to the “charging” step referred to in claim 1 of the 646 patent. Upaid alleges that the usage charges are adjustments for amounts of value, time, data, volume or other adjustments which are made in accordance with Telstra’s terms applying to the provision, use or the provision and use of products. In light of this allegation, it seems to me that the category 3 documents should also encompass those relating to the use of MOG Services, as Upaid seeks.

36    As to the rider that Upaid seeks with respect to the category 3 documents, I am not persuaded that Telstra should be put to the trouble of discovering documents when Upaid has sought to interrogate on whether other systems (i.e. beyond those about which Telstra’s witnesses propose to give evidence) are involved in the relevant processes. To the extent to which those interrogatories have been allowed, they should provide the information to which Upaid is entitled. To the extent the interrogatories have not been allowed, it is because they travel beyond the pleaded case and are “fishing”. Thus, to that extent, the discovery of documents would not be permitted in any event.

37    I do not propose to allow discovery in respect of the category 3(h) documents. I am unable to see how this category is directly relevant to the issues raised by the pleadings. Upaid submits that category 3(h) is relevant to determining whether any of the systems mentioned in the Process of Purchasing MOG Flowchart (provided by Telstra) interact with any other systems which are not described in the affidavits of Telstra’s proposed witnesses. In my view, expressed at that level of generality, both Upaid’s submission and, consequently, category 3(h) smack of “fishing”.

38    With respect to category 4, the documents should be “interface specifications and architecture/solution definition documents”, for the reasons I have given with respect to my ruling in relation to the category 3 documents. Similarly, the category 4 documents should not be subject to the rider concerning whether an interface communication or notification occurs via another system or systems, given, once again, that appropriately allowable interrogatories will be directed to that issue.

39    With respect to category 5, the issue between the parties is, once again, one of scope. Upaid submits, as it did with the category 3 documents, that “interface specification and architecture/solution description documents” will not provide details of “the end-to-end functionalities of Telstra’s systems”. It submits that it requires all documents describing information exchanged between Telstra systems in relation to metering. I am unable to accept that submission. Once again, I have not been provided with any sound reason or basis for concluding that “interface specification and architecture/solution description documents” of the kind referred to by Telstra will not provide adequate discovery in relation to the means or process by which any relevant system determines whether or not to meter a data session relating to the purchase, subscription or use of MOG services by a user. It seems to me that, once again, Upaid’s request is in the nature of “fishing”.

40    With respect to category 7, Upaid disputes that the category is redundant in light of the documents it has sought in category 2. The reason that Upaid argues that category 7 is not redundant is that, according to Upaid, category 7 goes to “the interactions between the systems of Telstra and financial providers”. It says that these interactions may not be recorded or evidenced in “overarching documents” dealing with the relationship between Telstra and a financial provider. It says, however, that it will not press this category if Telstra confirms that there are no documents caught by category 7 that would not also be caught by category 2.

41    It seems to me that the category 2 documents do go, in terms, to the relationship between Telstra and a financial provider. Upaid has not advanced a sufficient reason for seeking the category 7 documents over and above the category 2 documents. Once again, category 7 appears to be in the nature of “fishing”. Moreover, I do not think that Telstra should be embarrassed by placing upon it the obligation to discern differences between categories 2 and 7 when such differences are not manifest. I am not persuaded, therefore, that discovery should be ordered in respect of the category 7 documents.

42    With respect to category 8, Upaid submits that payments by credit card are clearly relevant to its pleaded case. It argues, therefore, that credit card and transaction processing fees are relevant documents to be discovered because, it says, Telstra will only authorise a transaction to proceed if the applicable credit card surcharge is paid.

43    Although in its written submissions Upaid submits that this category is relevant to claim 1 of each patent, in fact the only submissions it advances are with respect to claim 1 of the 853 patent. It submits that category 8 is relevant to the integers of determining the payment rule and applying the payment rule for authorising the transaction.

44    I am not satisfied that the payment rule contemplated, for example, by paragraphs 1.7, 1.8 and 1.9 of Upaid’s statement of particulars with respect to the alleged infringement of claim 1 of the 853 patent does comprehend a rule that is not just for payment of the product itself but also for payment of credit card fees which Telstra might seek to pass on to its customer. This is because paragraph 1.8A of the statement of particulars speaks of Telstra verifying with a financial provider that the amount owed to Telstra – meaning the amount owed to Telstra by application of the payment rule – will be paid by the financial provider. Paragraph 1.9 speaks of charging the authorised user’s account in accordance with the payment rule. Paragraph 1.11 of the statement of particulars speaks of Telstra settling charges to the authorised user’s account by recording that the obligation to pay Telstra will be discharged by the financial provider. Those particulars do not contemplate any payment rule or settlement rule that concerns an amount other than an amount that a financial provider will pay to Telstra or an obligation to pay that will not be discharged by the financial provider. Thus, the particulars do not contemplate a credit card fee which Telstra is charged by a financial provider and which Telstra seeks to pass on to its customer.

45    For these reasons, it seems to me that the documents sought by category 8 do go beyond Upaid’s pleaded case, as Telstra has submitted. I do not propose to allow category 8.

Interrogatories

Preliminary observations

46    The preliminary observations I have made concerning the discovery of documents (see [10]-[16]) apply in a similar vein to Upaid’s application to administer interrogatories. There are, however, some additional observations that I should make.

47    An interrogatory will only be allowed where it relates to a matter in question. Generally speaking, a party will be entitled to interrogate on facts that tend to support that party’s case or impeach the opposite party’s case – meaning, the pleaded cases – but not as to facts that support the opposite party’s case: Kennedy v Dodson [1895] 1 Ch 334 at 340-341, 341-342; Hooten v Dalby [1907] 2 KB 18 at 20, 21.

48    One manifestation of this objection is that an interrogatory cannot be used to obtain access to another party’s evidence or witnesses or to cross-examine. In this latter regard, a question put to an opposing party in cross-examination may be a perfectly legitimate and admissible question for that purpose, but not necessarily so when sought in the form of an interrogatory. One way to test the matter is to ask whether the interrogatory could properly be asked of the opposite party in examination in chief, if called as a witness in the interrogating party’s case: Dunbar v Perc [1956] VLR 583 at 590-591.

49    It is to be remembered that, in the substantive proceeding, Upaid bears the onus of establishing that Telstra has infringed the relevant claims of the 853 and 646 patents. Telstra bears no onus in that regard. Telstra’s affidavits, to be read in support of its interlocutory application, are directed to establishing certain factual matters which it would raise defensively to show that it has not infringed claim 1 of the 853 patent and claim 1 of the 646 patent as Upaid has pleaded.

50    Of course, Telstra does bear the onus of persuading the Court that Upaid’s case, to the extent presently challenged, should be summarily dismissed. But this does not change the character of Telstra’s affidavit evidence, which, when read, will stand as its responsive case, for present purposes, to Upaid’s pleaded case of infringement. It will be a matter for Upaid as to whether it wishes, in the context of Telstra’s interlocutory application, to rely on evidence to support its allegations of infringement. As I have noted, so far Upaid has not filed any affidavit evidence of that kind.

51    As a general observation, Upaid’s draft interrogatories are directed to certain statements in the affidavits that Telstra proposes to read in support of its interlocutory application. Drafted in this way, and viewed globally, these interrogatories might be seen to have the character of cross-examination. If so, the interrogatories would be bad in form. However, Telstra has not made this objection. For one thing, Telstra has already indicated its preparedness to answer interrogatories in this form: see [3]-[4] above. Further, as explained below, Telstra objects to answering a number of the proposed interrogatories – and therefore submits that leave to administer them should not be granted – on the basis that a statement or statements made in an affidavit or affidavits already provide or provides an exhaustive answer on the particular matter to which the statement or statements relate. So expressed, this objection appears to go more to a question of oppression, rather than the more fundamental question of whether the interrogatory is, at the outset, a proper one as a matter of form.

52    In response, Upaid has said that if, after making due inquiries, Telstra is of the view that its affidavit evidence exhaustively describes a particular matter, Telstra “may indicate this in its answer”. Upaid’s response appears to address, at least to some extent, the oppression which Telstra seeks to raise.

53    I wish to make clear that I propose to resolve this particular part of the present dispute on the basis on which the parties have presented it, rather than embark upon a question of form which the parties have not raised.

Telstra’s position

54    Putting to one side the proposed interrogatories noted in [3]-[4] above, Telstra’s objections to the interrogatories can be grouped into three categories.

First, Telstra submits that the following interrogatories are irrelevant to the pleaded case and/or the issues arising on its application for summary dismissal and are, in effect, no more than “fishing”: 1(c), 3(a)-(b), 4(g)-(i), 5(b), 5(g)-(h), 6(b)-(c), 8(e), 9(d)-(e), 9(j)-(k), 13(a)-(b), 20(a)-(b), 23(c)-(f), 23(i)-(k), 24(a)-(b), 25(c)-(f), 26(d)-(e), 28(a)-(d), 32(a)-(d), 34(a)-(i), 36(a)-(b), 37(e) and 37(h)-(j).

55    Secondly, Telstra submits that the following interrogatories are answered by the affidavit evidence on which it proposes to rely in support of its interlocutory application which is, on its face, an exhaustive answer for the purposes of that application: 14(a), 15(a)-(b), 17(a)-(b), 20(c), 32(e) and 38(d).

56    Thirdly, Telstra accepts the possibility that, in relation to some statements made in the affidavits, it may not be perfectly plain that the description given is “relevantly exhaustive”. Telstra says that, in such cases, it is prepared to offer confirmation on oath that the statements made are “relevantly exhaustive”.

57    In this connection, Telstra says that:

    in respect of the following interrogatories, its affidavit evidence is an exhaustive answer in relation to systems involving charging or settling the user’s account as alleged: 2(a), 2(c)-(d), 12(a) and 22(a)-(b).

    in respect of the following interrogatories, its affidavit evidence is an exhaustive answer in relation to charging using rating engines for dynamically calculating usage charges as alleged in relation to claim 1 of the 646 patent: 7(b)-(d), 8(a)-(c) and 30(a)-(c).

Nevertheless, it will provide sworn confirmation to that effect.

Consideration

Telstra’s second and third categories

58    It is convenient to commence with the second and third categories of interrogatories noted above.

59    With regard to the interrogatories falling into the third category, in light of Telstra’s preparedness to offer confirmation on oath that the statements made are relevantly exhaustive, so as to address Upaid’s concerns in that regard, I can see no reason why, in the interests of justice and the efficient administration of the proceeding, that offer should not be acted upon, even though, generally speaking, that is not the way an interrogatory should be answered as a matter of form. The benefit of such an answer in the present case is that it should eliminate any argument about the intended purport of the evidence to be given. Thus, in my view, leave to administer the interrogatories falling into the third category should be given in the special circumstances of this case.

60    With regard to the interrogatories falling into the second category, the debate between the parties appears to be one centring on the question of whether it would be oppressive for Telstra to be required to answer these interrogatories when Telstra contends that it has given an exhaustive statement on the matter to which the interrogatory is directed. Upaid disputes that proposition, but says, as it does with respect to the interrogatories falling into the third category, that Telstra can indicate in its answers that the statement is relevantly exhaustive.

61    When dealing with the question of whether leave to administer interrogatories should be given, I do not think that the Court should be drawn into a debate between the parties about the scope and sufficiency of intended evidence upon which the Court is not presently called upon to adjudicate. Indeed, at the present time, the evidence has not been tendered and I have no way of resolving any such debate. The question is whether, in circumstances where it says that the statement is exhaustive with respect to the subject matter of the interrogatory, it would be unduly burdensome for Telstra to make that position clear, even though it says that the position is already clear.

62    This, it seems to me, is a debate without substance. I cannot discern any material difference between the interrogatories in this category and the interrogatories in the third category, apart from Telstra’s greater conviction that the statement, on its face, is exhaustive of the subject matter to which the interrogatory is directed, and Upaid’s unpreparedness to act on that conviction.

63    Where the debate is not about the form of the interrogatories, but is directed to whether, accepting their form, it would be unduly burdensome for Telstra to answer them, I do not see how these interrogatories fall outside those covered by the third category, which Telstra is prepared to address. In the particular circumstances of this case, I do not think it would be unduly burdensome for Telstra to answer them. Once again, permitting them to be administered should eliminate any argument about what Telstra says is the intended purport of the affidavits in any event. Accordingly, leave should be granted to Upaid to administer the interrogatories in the second category.

Telstra’ first category

64    There are a relatively large number of interrogatories captured by Telstra’s first category. No useful purpose will be achieved by setting them out in the body of these reasons. Telstra was given leave to file a written outline of submissions supplementing its oral submissions at the hearing. Annexure “A” to that outline is a table which identifies all the interrogatories that Upaid wishes to administer and the current status of Telstra’s objections. I will mark that table for identification: MFI-1.

65    It is convenient to deal with these interrogatories in groups, as Telstra has done in its written outline.

66    Interrogatories 1(c) and 25(c) concern an aspect of establishing an account with Telstra. Despite Telstra’s objection on the ground of relevance, I propose to grant leave to Upaid to administer those interrogatories. I am satisfied as to their relevance.

67    The next group of interrogatories are directed to whether certain process steps apply if payment for a MOG subscription is made by credit card. Telstra submits that these interrogatories are outside the pleaded case because payment for a MOG subscription by credit card is not a pleaded type of infringement. It also submits that the charging step pleaded by Upaid is the charging of a user’s account, not a credit card. Upaid submits that payment by credit card is part of its pleaded case, having regard to the identification of financial providers in Part C of Schedule 1 to its statement of particulars and the verification step referred to in, for example, paragraph 1.8A and the settlement step referred to in paragraph 1.11 thereof.

68    I will grant leave to Upaid to administer the following interrogatories: 3(a)-(b), 4(h)-(i), 13(a)-(b), 23(c), 23(f), 23(j)-(k), 24(a)-(b), 28(a)-(d), 32(a)-(d), and 36(a)-(b). I am satisfied as to their relevance.

69    I will not grant leave to Upaid to administer the following interrogatories, which seem to me to travel well beyond its pleaded case and to constitute “fishing”: 23(d)-(e) and 23(i).

70    The next group of interrogatories are directed to aspects of authorising, calculating and charging credit card processing fees. Upaid submits that these interrogatories are relevant to the question of whether, in respect of the alleged infringements of claim 1 of the 853 patent, Telstra determines a payment rule and applies a payment rule to authorise a transaction. For the reasons given in [44] above, it seems to me that these interrogatories travel well beyond Upaid’s pleaded case and constitute “fishing”. Therefore, I will not grant leave to Upaid to administer the following interrogatories: 37(h)-(j).

71     Interrogatory 4(g) concerns “merchant accounts” as identified in a Telstra document. Upaid submits the interrogatory is relevant to the question of whether Telstra performs “settling” in the manner pleaded with respect to the alleged infringement of claim 1 of the 853 patent and, in particular, paragraph 1.11 of the statement of particulars. I am unable to see the relevance of this interrogatory to Upaid’s pleaded case. In my view, the interrogatory has the character of “fishing” and I will not grant leave to administer it.

72    Interrogatory 5(b) concerns whether there is an expiry date for pre-paid credit. Upaid submits that the interrogatory is relevant to the question of whether, in respect of the alleged infringement of claim 1 of the 853 patent, Telstra determines a payment rule and applies a payment rule to authorise a transaction. I am satisfied as to its relevance and will grant leave to Upaid to administer it.

73    With respect to interrogatories 5(g)-(h) and 37(e), Telstra says that its objection will be overcome if the words “or any other account in Telstra’s Systems” are removed. This is because, it submits, those words result in these interrogatories travelling beyond Upaid’s pleaded case. Upaid submits that these interrogatories are relevant to the question of whether Telstra performs “settling” in the manner pleaded with respect to the alleged infringements of claim 1 of the 853 patent.

74    Paragraph 1.11 of the statement of particulars exemplifies Upaid’s pleaded case in this regard. That paragraph is concerned with “settling” charges by making a record in the user’s account with Telstra, not some other account in Telstra’s Systems. For that reason, these interrogatories, in the present form, travel beyond Upaid’s pleaded case. I will not grant leave to Upaid to administer them. However, if Upaid wishes to amend these interrogatories by removing the words “or any other account in Telstra’s Systems” then I will grant leave to administer them in that form.

75    Interrogatories 6(b)-(c) are directed to Telstra’s bank account. Once again, Upaid submits that these interrogatories are relevant to the question of whether Telstra performs “settling” in the manner pleaded with respect to the alleged infringement of claim 1 of the 853 patent. In particular, Upaid argues that, if money coming from a financial institution does not appear in Telstra’s bank account instantly, Telstra must necessarily keep a record of that money. It then argues that, so that money coming from a financial institution can be appropriately allocated, Telstra must record this is in an account associated with the user making the payment. If so, Telstra is, according to Upaid, “performing settlements as pleaded”.

76    In my view, that submission eloquently demonstrates that these interrogatories are no more than “fishing”. They travel well beyond Upaid’s pleaded case that “settling” occurs by making a record in the user’s account with Telstra that the obligation to pay Telstra will be discharged by the financial provider: once again, see, for example, paragraph 1.11 of the statement of particulars. I will not grant leave to Upaid to administer these interrogatories.

77    Interrogatories 8(e), 9(d)-(e), and 9(j)-(k) are directed to the metering of data used for refreshing webpages and in respect of advertisements appearing on webpages. Upaid submits that these interrogatories are relevant to the alleged infringements of claim 1 of the 646 patent and, in particular, whether Telstra meters date usage on MOG webpages which Telstra says are unmetered. In this connection, Upaid submits that Telstra’s own website, when explaining what the unmetered symbol on a webpage means, states that data used for advertisements sitting on an unmetered page may count toward the user’s data usage allowance. Hence, in determining whether a user’s use of MOG is, according to Upaid, “truly unmetered”, the question of advertisements appearing on MOG webpages is relevant to the dynamic calculation of usage charges by rating engines. I will grant leave to Upaid to administer these interrogatories.

78    Interrogatories 25(d)-(f) are directed to how Telstra establishes creditworthiness for its customers. Upaid submits that these interrogatories are relevant to the question of whether Telstra utilises a financial network when it performs “charging” and “settling” as pleaded with respect to the alleged infringements of claim 1 of the 853 patent. Upaid argues that Telstra would only want to allow users to make purchases if they can pay for them. It argues that this requires Telstra to ensure its users are creditworthy. It then submits that the frequency of creditworthiness checks is relevant to whether Telstra communicates with a financial provider each time a purchase is made.

79    So far as I can see, there is nothing in Upaid’s pleaded case concerning the alleged infringements of claim 1 of the 853 patent that deals with determining a user’s creditworthiness. In paragraph 1.8A of its statement of particulars, Upaid does refer to Telstra verifying with a financial provider that the amount owed to Telstra will be paid by the financial provider. Upaid then says that this information is used in the “charging” and “settling” steps: see, for example, paragraphs 1.9 and 1.11 of the statement of particulars. As particularised, these steps concern the financial provider’s preparedness and commitment to pay Telstra, not the user’s “creditworthiness” which, presumably, might be a matter of concern for the financial provider, but not for Telstra. Therefore, the interrogatories in this group fall outside Upaid’s pleaded case. I will not grant leave to Upaid to administer them.

80    Interrogatories 34(a)-(i) are directed to certain Telstra systems identified in one of Telstra’s affidavits intended to be read in support of its interlocutory application. The interrogatories ask what each system is, and what customer information the system records. The interrogatories then go on to ask whether the system interacts with other Telstra systems and, if so, which other systems.

81    Upaid submits that these interrogatories are relevant to the type 1, 3 and 5 infringements pleaded with respect to claim 1 of the 853 patent. It argues that its pleaded case “encompasses all Telstra systems which are engaged in exploiting the invention as claimed”.

82    In my view, these interrogatories are unfocused and constitute “fishing”. I will not grant leave to administer them.

83    Interrogatories 20(a)-(b) and 26(d)-(e) are directed to where, in Telstra’s systems, a record of the fact of purchase of a MOG subscription is made. I am satisfied as to their relevance. I will grant leave to Upaid to administer these interrogatories.

General comments

84    In respect of some of the interrogatories for which I have indicated leave will be granted, Upaid has indicated its agreement to administer the interrogatory in an amended form. In each such case, the leave granted is for the interrogatory in that amended form: see MFI-1.

85    Although, in its written outline, Telstra identified an objection to interrogatories 8(f)-(g), 9(m)-(n), 23(g)-(h), 29(a)-(b) and 33(a)-(b) on the ground of relevance, this was expressed to be on the basis that the interrogatories had not been limited to the purchase of a MOG subscription. Upaid has indicated that this limitation was intended and accepts that it should be imposed. This will overcome Telstra’s particular objection. I will grant leave to Upaid to administer these interrogatories in the proposed amended form.

86    There is a dispute between the parties concerning whether Upaid’s pleaded case in relation to the infringements of claim 1 of the 853 patent and claim 1 of the 646 patent reads onto those claims. The leave I have granted, over Telstra’s particular objections to relevance, should not be understood as dealing, in any way, with that aspect of the dispute between the parties.

Disposition

87    The parties are to bring in agreed draft orders giving effect to these reasons and providing for any other step required to be undertaken to bring the matter to readiness for the hearing of Telstra’s interlocutory application as appointed.

88    The draft orders must specifically identify the categories of documents for discovery and the precise form of the interrogatories in respect of which I have indicated that leave will be granted. The draft must be provided by no later than 4.00 pm on 18 December 2014.

Associate:

Dated:    16 December 2014