FEDERAL COURT OF AUSTRALIA

Dyno Nobel Inc v Orica Explosives Technology Pty Ltd (No 2) [2019] FCA 1552

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 190(3) of the Evidence Act 1995 (Cth), the application of the hearsay rule under s 59 of the Act is dispensed with in relation to paragraphs 6 to 11 of the affidavit of Christopher Butler affirmed on 2 July 2019 and the evidence annexed therein (the Wayback materials).

2.    The Wayback materials are admitted subject to a limitation pursuant to s 136 of the Act, namely that the use of the evidence is to prove the availability of website “i-konsystem.com” and of the contents of the particular pages, on particular dates. It does not extend to prove the truth of any fact referred to therein.

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

REASONS FOR JUDGMENT

BURLEY J:

1    The applicant, Dyno Nobel Inc, commenced proceedings against Orica Explosives Technology Pty Ltd for the revocation of Australian Patent No 2004293486 which is entitled “Method of blasting multiple layers or levels of rock” (486 patent). A cross-claim was then filed by the respondent and Orica International Pte Ltd (collectively, Orica) against the applicant and Dyno Nobel Asia Pacific Pty Ltd (collectively, Dyno) for the alleged infringement of a number of the claims of the 486 patent. On the first day of the hearing of the substantive application, I heard argument in relation to Orica’s objection to Dyno’s evidence of print-outs from the website called “the Internet Archive” and subsequently admitted the evidence. These are my reasons for doing so.

2    Christopher Butler is the office manager at the Internet Archive, an organisation based in California that operates a website called the “Wayback Machine”. Orica objects to paragraphs [6] – [11] of Mr Butler’s affidavit, which refer to and annex copies of print outs from searches completed using the Wayback Machine. Orica also objects to certain paragraphs of the affidavit of Michael Zammit, a patent attorney.

3    In his affidavit, Mr Butler explains that the Wayback Machine is a service provided free of charge by the Internet Archive to give access to a digital library of internet sites and other cultural artefacts in digital form. His evidence is that the Internet Archive has partnered with and receives support from various institutions and libraries, including the United States Library of Congress, to create a digital library of internet sites in digital form. The archived data was compiled using software programs known as “crawlers” that surf the World Wide Web and automatically store copies of website files, preserving them as they exist at the point of time of capture. The Wayback Machine makes it possible for internet users to surf more than 400 billion pages stored in the web archive by universal resource locator (URL), which is a website “address”. If archived records for a URL are available, the user may conduct a search and find a list of available dates, select one, and then begin viewing and browsing an archived version of the website. Mr Butler was cross-examined, and gave evidence that before 2009 it was not the Internet Archive, but a company called Alexa Internet Inc. which was founded by the same person, that contributed the majority of the archives to the Internet Archive. He was not challenged on his evidence as to the process by which the archived records were collected.

4    Mr Butler gives evidence that the Internet Archive assigns a URL on its site to the archived records in the format of “http://web.archive.org/web/[year in YYYY][Month in MM][Day in DD][Time code in HH:MM:SS]/[Archived URL], with the result that a user can identify the date assigned by the Internet Archive to the archived record, which correlates with the date upon which it was archived. That date applies to the HTML file, but not to image files that are linked, with the result that images that appear on a printed page may not have been archived on the same date.

5    In his paragraphs that are the subject of objection, Mr Butler first annexes a copy of a print out of a search result page from the Wayback Machine for the URL “i-konsystem.com” (i-kon website), displaying the dates for which captures are available at that URL for the year 2003. He then annexes printouts of the Internet Archive’s records for various specific pages (Wayback materials), containing extracts that may broadly be described as technical and promotional material about i-kon detonators promoted by Orica.

6    Other evidence in the proceedings indicates that the i-kon website is one that was operated on behalf of Orica before the priority date, which for the patent in suit is 23 November 2003. There is no dispute that the Wayback materials are potentially relevant to the obviousness case advanced by Dyno pursuant to s 7(2) of the Patents Act 1990 (Cth). They are relied upon to establish aspects of the common general knowledge as at that date. The evidence of experts, with qualifications that appear to qualify them as persons skilled in the art relevant to the patent, is that at least some of the extracts from the i-kon website included within the Wayback materials were generally consistent with their recollection of the nature and content of Orica’s promotional materials concerning its i-kon system and electronic detonator products.

7    The objection taken is that the Wayback materials are hearsay documents that do not qualify for any exception in the Evidence Act 1995 (Cth). Orica submits that the Wayback materials are not admissible as business records within s 69 of the Evidence Act because they are not documents of either Orica or Dyno, and because they are the product of the business of the Internet Archive, rather than business records. Furthermore, it submits that the courts have repeatedly held that flyers, media advertisements or website publications extolling the virtues of a business are not business records. It submits that the business of the Internet Archive is storing records from the internet to make them publicly available, and that as a result the archived records are the products of the business.

8    Dyno submits that the Wayback materials should be admitted; first, because Mr Butler’s evidence establishes that they comprise the business records of the Internet Archive within s 69 of the Evidence Act. Secondly, by operation of s 147 of the Evidence Act, and thirdly, by reason of s 190(3) of the Evidence Act, because the material is either not seriously in dispute or the application of the hearsay rule would involve unnecessary expense or delay.

9    Insofar as the Wayback materials include the content of archived web pages, they are hearsay. Each page is a digital copy of a page said to have been present on the i-kon website. The representation made to those using the Wayback Machine is that the Internet Archive copied the webpage into its archive and recorded the date on which it did so, and that the webpage which appears in its archive is the webpage that existed on that date. Dyno wishes to adduce the Wayback materials as evidence that those pages were in fact in that form on those dates. It submits that the use of the evidence is to prove the availability of the website (and the contents of the particular pages) on a particular date. It does not seek to use the documents to prove the truth of any fact referred to in them. The dates applied by the Internet Archive are not hearsay, as they were created by the organisation itself.

10    As a consequence, subject to any exercise of discretion under s 190(3) of the Evidence Act, in order for the Wayback materials to be admitted they must satisfy the requirements of s 69, which provides:

69 Exception: business records

(1)    This section applies to a document that:

(a)    either:

(i)    is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or

(ii)    at any time was or formed part of such a record; and

(b)    contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.

(2)    The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:

(a)    by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or

(b)    on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

(3)    Subsection (2) does not apply if the representation:

(a)    was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding; or

(b)    was made in connection with an investigation relating or leading to a criminal proceeding.

(4)    If:

(a)    the occurrence of an event of a particular kind is in question; and

(b)    in the course of a business, a system has been followed of making and keeping a record of the occurrence of all events of that kind;

the hearsay rule does not apply to evidence that tends to prove that there is no record kept, in accordance with that system, of the occurrence of the event.

(5)    For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person’s knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).

Note 1: Sections 48, 49, 50, 146, 147 and subsection 150(1) are relevant to the mode of proof, and authentication, of business records.

Note 2: Section 182 gives this section a wider application in relation to Commonwealth records.

11    The only point taken by Orica is that the Wayback materials do not fall within the description in s 69(1) as business records. Otherwise, it is not disputed that the requirements of the balance of the section are satisfied.

12    In Roach v Page (No. 15) [2003] NSWSC 939, Sperling J said at [5]:

The records of a business are the documents (or other means of holding information) by which activities of the business are recorded. Business activities so recorded will typically include business operations so recorded, internal communications, and communications between the business and third parties.

On the other hand, his Honour said at [6]:

…where it is a function of a business to publish books, newspapers, magazines, journals (including specialised professional, trade or industry journals), such publications are not records of the business. They are the product of the business, not a record of its business activities. Similarly, publications kept by a business such as journals or manuals (say, for reference purposes) are not records of the business.

13    His Honour observed that it cannot have been intended by s 69 that newspapers, magazines and journals (publication of any kind produced and / or received in the course of a business undertaking) would be evidence of whatever was stated in them (at [8]).

14    In Australian Competition and Consumer Commission v Air New Zealand (No 5) [2012] FCA 1479 at [13], Perram J said (on rejecting the tender of certain parts of magazines produced by Singapore Airlines and Cathay Pacific to prove the truth of the statements contained therein) in considering Sperling J’s observations in Roach, that:

The critical feature in this reasoning is the distinction it draws between the documentary products of a business (such as magazines and journals) and records which record the business’ activities. (This distinction has also been drawn in relation to the statistics published by the Australian Bureau of Statistics, which Glynn J found were not the business records of the Bureau in Murray v Rentworks Ltd (No 5) [2003] NSWIRComm 54 at [39]-[48]).

15    Dyno seeks to distinguish this line of authorities, and relies on a later passage in Air New Zealand where his Honour said at [15]:

...It may be admitted that it may be possible, at the level of theory, to imagine a document appearing to have the qualities both of a recording of the information of a business and also of a publication and that, in such cases, some care may be required. Compare, for example, (a) the status of a copy of the accounts of a company sent from an email account maintained by the company with (b) a copy of a publication such as a magazine, in pdf or similar format, sent by similar means: see Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) at [53]-[60]. The answer to that conundrum may not be straightforward. In any event, generally speaking, the published output of a business by way of journal, website or other literary form will not be a business record.

16    In this regard, it is instructive to note the reasoning of Middleton J in Hansen Beverages v Bickford [2008] FCA 406; 75 IPR 505:

[131]    In my view, s 69(1) was drafted deliberately broadly, with the rationale being to allow as an exception to the hearsay rule the tender of documents which, by virtue of the fact they are kept as records of the business, should be assumed to be accurate.  However, a document created to be sold as part of a business should not be considered to be a record kept in the course of or for the purposes of the business, just because there is reason to believe that the document is to be regarded as reliable and accurate.  One has to determine whether the document is in truth a record of the type described in s 69(1). 

[132]    In my view the documents sought to be tendered as the three exhibits are not to be regarded as documents which are or form part of the ‘records’ of OzTAM.  Merely describing the documents as the ordinary stock in trade of a business, or the produce of the core business activities of a business, does not necessarily mean that such documents form part of the records of a company in the course of, or for the purposes of its business within the meaning of s 69(1). 

[133]    The records referred to in s 69(1) of the Evidence Act are the documents a business generates in the course of, or for the purpose of the business, not documents which it may have or keep as the product of that business.  The concept of a business record is an internal record, kept in an organised form accessible in the usual course of business, actually recording the business activities themselves and does not include the product of the business itself: see Sperling J in Roach v Page [2003] NSWSC 939; ASIC v Rich (2005) 216 ALR 320 at [180]-[182] per Austin J. 

17    As Dyno puts it, the Wayback materials are business records of the Internet Archive website, which is the business operated by the Internet Archive organisation. It seeks to distinguish Hansen Beverages because in that case the hearsay evidence was of records sold as part of its business. Dyno says that the Internet Archive is a form of digital library and the digital record of the date on which the Wayback materials became available is analogous to the date stamp that a librarian might put on a library book when the book was received as party of the library’s collection.

18    However, the “business” of the Internet Archive is nevertheless to collect and maintain a digital archive, in a manner that is only partly analogous to the collection and maintenance by a library of hard copy books. Unlike books, which could be tendered as to the fact of their contents, the content of the Wayback materials are representations of digital copies captured by the Internet Archive. They are hearsay representations of the content of the i-kon website at the particular point in time when the crawlers copied the materials. Furthermore, it is not apparent that the dates and content of the i-kon website in the Wayback materials are, or form part of, the records kept by Internet Archive in the course, or for the purposes, of a business. In my view, it does not fall within the concept of an internal record, kept in an organised form accessible in the usual course of business, actually recording the business activities themselves which does not include the product of the business itself; Hansen Beverages at [133]. The content of the archive is the output of the Internet Archive. As a consequence, s 69 of the Evidence Act is not satisfied.

19    That conclusion also serves to address the argument advanced by Dyno that s 147 of the Evidence Act applies. As Dyno accepts, even were the Wayback materials not to contain hearsay representations, s 147(2)(a) also requires that the document be part of the records, or kept for the purposes, of a business.

20    However, s 69 is not the end of the matter. Dyno also relies on s 190 of the Evidence Act, which relevantly provides:

190 Waiver of rules of evidence

(1)    The court may, if the parties consent, by order dispense with the application of any one or more of the provisions of:

(a)    Division 3, 4 or 5 of Part 2.1; or

(b)    Part 2.2 or 2.3; or

(c)    Parts 3.2 to 3.8;

in relation to particular evidence or generally.

(2)     ...

(3)    In a civil proceeding, the court may order that any one or more of the provisions mentioned in subsection (1) do not apply in relation to evidence if:

(a)    the matter to which the evidence relates is not genuinely in dispute; or

(b)    the application of those provisions would cause or involve unnecessary expense or delay.

(4)    Without limiting the matters that the court may take into account in deciding whether to exercise the power conferred by subsection (3), it is to take into account:

(a)    the importance of the evidence in the proceeding; and

(b)    the nature of the cause of action or defence and the nature of the subject matter of the proceeding; and

(c)    the probative value of the evidence; and

(d)    the powers of the court (if any) to adjourn the hearing, to make another order or to give a direction in relation to the evidence.

21    The evidence of Mr Butler explains the mechanical process by which the Wayback materials are collected. It operates to capture and date the ephemera of the internet. I accept that the Wayback materials are likely to be a reliable indication of the content of the i-kon website at different points of time. Furthermore, Dyno relies on paragraphs of an affidavit sworn on 10 May 2019 by Mr Ian Pascarl, the solicitor on the record for Orica, in which he says that in the period from 2001 – 2003, Orica’s i-kon electronic detonator marketing portfolio, including the i-kon website, was managed for Orica by a third party called the Ran Group located in the United States. Two Notices to Admit have been served by Dyno on Orica with respect to materials from the i-kon website, one 19 months, and the other 4 months, before the trial. Each was the subject of a blanket non-admission on the basis that Orica could not find within its own records copies of the Wayback materials and so was “unable to verify” the content. Discovery sought by Dyno also failed to yield copies of the documents. No argument has been advanced by Orica to suggest that the Wayback materials are not accurate captures of the i-kon website, or that the dates attributed to them are incorrect. Having regard to the process by which the Wayback materials are collected and retrieved, and in the absence of material pointing to inaccuracy or other reasons why they should not be accepted, it seems to me that the objection advanced by Orica is purely technical in nature, and is not based on an absence of probative value or relevance of the materials concerned. Such an approach is not to be encouraged. After all, the i-kon website was one operated on behalf of Orica itself. If there were a basis upon which it may be said that the Wayback materials were inaccurate, one would expect it to have been put forward.

22    Furthermore, there appears to be other evidence in the proceedings that tends to support the accuracy of the Wayback materials. In particular, in a joint expert report four experts agree that by the priority date of the patent, each of four extracts within the Wayback materials “would have been generally known” to drill and blast engineers skilled in the art. Other contemporaneous publications of Orica, that were produced in discovery, appear to provide a measure of support for the contention that it is likely that the Wayback materials are accurate representations.

23    Section 190(4) of the Evidence Act states that when considering to exercise the power conferred by s 190(3), the Court must take into account the importance of the evidence in the proceeding, the nature of the proceeding, the probative value of the evidence, and the power to adjourn the hearing to make another order or give a direction in relation to the evidence. I am persuaded that I should admit the evidence, subject to limitations and subject to consideration of the weight to give to it. In this regard, I bear in mind that the i-kon website was maintained on behalf of Orica, and that it is the absence of its own records that has led to its apparent inability to verify its contents. Nevertheless, the content of the website is something about which it must have been aware. The evidence on the current application indicates that there is no genuine dispute as to the accuracy of the contents of the Wayback materials. Furthermore, in the proceedings, Orica is defending the validity of a patent for which it has been granted a 20 year monopoly under the Patents Act. There is a public interest in ensuring that relevant and probative evidence is before the Court. I regard the Wayback materials to be both.

24    Accordingly, on the basis of s 190(3)(a) of the Evidence Act, I order that s 59 of the Evidence Act (the hearsay rule) be waived in respect of the Wayback materials annexed to the affidavit of Mr Butler. No specific argument was addressed to the evidence of Mr Zammit, and I will address it separately, should the need arise. The Wayback materials are admitted subject to a limitation pursuant to s 136 of the Evidence Act, namely:

that the use of the evidence is to prove the availability of the i-kon website (and of the contents of the particular pages) on particular dates. It does not extend to prove the truth of any fact referred to in the particular pages.

Associate:

Dated:    23 September 2019