FEDERAL COURT OF AUSTRALIA

Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Late Evidence) [2020] FCA 904

ORDERS

THE COURT ORDERS THAT:

1.    The application to rely on Mr Grimmett’s affidavit be refused.

2.    The Respondents pay the Applicant’s costs of the application.

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

REASONS FOR JUDGMENT

PERRAM J:

1    Hytera seeks to rely upon the affidavit of Andrew Neil Grimmett affirmed 9 June 2020 at the upcoming hearing of Motorola’s claims for, amongst other things, copyright infringement. That trial is due to begin on 27 July 2020. These reasons assume a familiarity with the underlying issues in the litigation.

The Relevance of the Evidence and its Procedural Consequences

2    Mr Grimmett’s affidavit is said by Hytera to be relevant to its delay defence. That defence is raised in response to claims made by Motorola for species of relief which are in their nature discretionary, for example, its claim for an injunction. Hytera’s pleaded delay defence is that if Motorola had commenced its proceedings earlier then Hytera would have been able to commence rewriting the source code for its devices at an earlier time. If it had rewritten its source code at an earlier time then its exposure to Motorola for damages for copyright infringement would have been reduced; ergo, Motorola’s alleged delay has prejudiced Hytera’s monetary position and discretionary relief should be denied or some lesser relief given.

3    As it is presently pleaded, Hytera does not allege in its defence why Motorola delayed in commencing the proceedings, only that it did delay.

4    Hytera explained the relevance of Mr Grimmett’s evidence this way at §§2-3 of its submissions:

2. Grimmett relates to Hytera’s delay defence currently pleaded in its Fifth Further Amended Defence (5FAD), paragraphs 35B, 36(c) to 36(f) (the Delay Defence), and arises from Motorola’s discovery provided in respect of the Delay Defence. Grimmett gives evidence by reference to six documents discovered by Motorola. In general terms, his evidence and those documents are relevant to the Delay Defence because, among other things, they provide context to explain Motorola’s motivation in delaying giving notice to Hytera of its allegations that Hytera used the functionality of the alleged inventions claimed in the patents in suit and that Hytera had infringed Motorola’s copyright, as contended in the Delay Defence.

3. It appears from Motorola’s discovered documents that at the time that Motorola first became aware of the possibility that the ex-Motorolans had misappropriated Motorola source code and information and taken it to Hytera, Motorola wished to license its DMR Standard technology to Hytera. The discovered documents also suggest that the reason for this was that in order for the DMR Standard and Motorola’s DMR products to be successful in the market, Motorola considered that it required support from multiple vendors and interoperability across multiple vendors’ products, and further, that Motorola considered that certain third party products (Icom and Kenwood’s NXDN and dPMR Standard products) posed a competitive threat to its plans. Hytera will allege at trial (and as Motorola’s discovered documents also disclose) that Motorola delayed in notifying Hytera of its allegations that Hytera used the functionality of the alleged inventions claimed in the patents in suit and that Hytera had infringed Motorola’s copyright because it wanted Hytera to license its DMR Standard technology in order to address these concerns.

5    The last sentence of §3 says in terms that the reason Motorola delayed in commencing the proceedings was because it desired Hytera to licence its DMR standard technology. To give some context, (and as Hytera’s submission above notes) there were other standards being pursued by other digital mobile radio manufacturers known as dPMR and NXDN and Motorola was keen to see its DMR standard become the norm in the market place. It is said that it was useful for Motorola to persuade Hytera, a large Chinese manufacturer of digital mobile radios, to utilise the DMR standard in its products (rather than dPMR or NXDN). The case theory is therefore that Motorola held off suing Hytera over the alleged theft of its source code until such time as it had obtained Hytera’s support for the DMR standard.

6    Mr Grimmett’s evidence does not directly establish anything about Motorola’s reasons for not suing Hytera. Instead, it is evidence that Motorola did indeed desire that Hytera licence its DMR standard technology. Mr Grimmett’s evidence does not directly link Motorola’s alleged delay in suing Hytera with its desire to advance its DMR standard technology.

7    The last sentence of §3 of Hytera’s submissions therefore involves the drawing of an inference from Mr Grimmett’s evidence together with other documents which have been discovered by Motorola. These documents were set out in Hytera’s written submissions at §§21-23. It is not necessary to deal with them in any detail for the purposes of these reasons.

8    The point is that framed in that way, Mr Grimmett’s evidence is circumstantial. This is not a criticism of it but rather merely an identification of the kind of exercise of proof which is involved.

9    I do not accept that this case is presently encompassed in Hytera’s defence. A party must plead a fact if a failure to plead it may take another party by surprise: Federal Court Rules 2011 (Cth) r 16.03. The contention that Motorola deliberately delayed the commencement of the proceeding so as garner Hytera’s support for its DMR standard would be a significant surprise. Hence, it must be pleaded.

10    If Hytera now pleaded such a case Motorola would be entitled to seek to prove that the reasons for its delay in suing Hytera were not connected with its desire to advance its DMR standard. The appearance of that debate in the proceedings at this late stage therefore is likely to have significant knock-on effects.

11    In its oral submissions, Hytera naturally sought to limit the scope of those knock-on effects. It eschewed obtaining any benefit from the deliberate nature of the alleged decision by Motorola to delay the commencement of the proceedings because of the DMR issue. What was said to be important was that the alleged decision by Motorola not to sue Hytera because of its concern about DMR would demonstrate only when the decision was made. On this view, it was a minor question of chronology. Hytera suggested it might be willing to submit to an order that the evidence of Mr Grimmett only be used for that chronological purpose.

12    I do not accept that this would solve the problem. If Hytera wishes to prove that the decision by Motorola happened at time t0 because that is when it says that Motorola decided not to sue Hytera because of the DMR standard then it must be open to Motorola to say that the decision not to sue Hytera earlier than it did had nothing to do with any desire on its part to advance its DMR standard technology. Consequently, the question of Motorola’s motivations cannot be excised from the case just because Hytera says that it does not wish to make any point about them.

13    Having determined the scope of the debate that would be opened up by Mr Grimmett’s evidence it is then necessary to explain how Mr Grimmett’s evidence came into existence.

The chronology leading to Mr Grimmett’s evidence

14    It is useful first to note that Mr Grimmett’s evidence is really just an interpretation for lay people of the meaning of six documents dealing with Motorola’s desire to advance its DMR standard technology. It follows that if the use of the six documents was itself something which ought to be permitted, Mr Grimmett’s evidence would stand in the same position.

15    The evidence about Mr Grimmett’s affidavit and how the six documents came to be discovered was set out in the affidavit of Ms Sue Gilchrist of 15 June 2020 (her 27th affidavit in this proceeding) and of Mr Mark Vincent of 17 June 2020 (his 34th affidavit in this proceeding). Ms Gilchrist is Motorola’s solicitor and Mr Vincent is Hytera’s solicitor. Both were cross-examined on the present application. I accept the evidence of both.

16    Hytera first sought by interlocutory application to raise the delay defence in its current form (which did not include any reference to the DMR issue) in July 2019. I refused leave to Hytera to raise that defence on 9 August 2019: Motorola Solutions Inc v Hytera Communications Corporation (Amendment and Interrogatories) [2019] FCA 1237.

17    On 11 October 2019 the Court made the following order:

7. To the extent that a party fails to file evidence in compliance with the dates set out in orders 5 and 6 above, that party cannot rely on that evidence in these proceedings.

18    This was a guillotine order which has the effect that any of Hytera’s evidence in answer to Motorola’s copyright case had to be filed by 6 December 2019 otherwise it could not be relied upon at trial. The effect of that order is that Hytera presently needs to be dispensed from the operation of order 7 if it is to rely upon Mr Grimmet’s affidavit.

19    Relevant also for present purposes is the fact that by November 2019 there had begun in the US District Court for the Northern District of Illinois, a trial of parallel allegations in related proceedings. That case is known as Motorola Solutions Inc & anor v Hytera Communications Corporation Ltd & anor (No.17 CV 1973). On 7 November 2019, Hytera’s counsel in that trial was in the course of opening before the jury. During that opening at p.76 its counsel said this:

Mr. Alper didn't let you know that there was a competitor to the DMR technology, something called dPMR. We'll talk about this in more detail, but they were basically two competitor, two competitor standards. Nobody in the industry knew which standard would prevail or whether they would both prevail.

20    At pp.82-83 this was then said:

We will present to you the evidence showing that they could have absolutely and should have brought this case a long, long time ago, but they didn't do that, and they didn't do it on purpose. They turned a blind eye to what was going on because they needed Hytera to help them get the standard they were pushing. And had they brought this case then, there's no damages, no damages at all.

21    This makes clear that the DMR issue was advanced by Hytera in the US proceeding. This transcript was not subject to the protective order which has prevented many of the discovered documents in the US proceeding from being discussed with the Australian lawyers.

22    Meanwhile, Hytera sought leave to appeal from my decision not grant it leave to raise the delay defence. The Full Court heard that application on 25 November 2019. At that time, Hytera told the Full Court:

In short, your Honours, the proposed amendments involved the proposition that Motorola delayed in bringing forward its allegations regarding the conduct of its former employees. And that had Motorola brought forward those allegations at an earlier stage, Hytera would have been in a better position to respond, including by, without admission, taking steps to remove or rewrite the impugned functionality or source code, and otherwise in its ability to conduct its defence of those allegations.

Your Honours, the significance of the proposed amendments for Hytera is illustrated by the fact that when Motorola did bring forward its allegations of knowing and flagrant conduct in these proceedings, Hytera did, in fact, take steps to, without admission, remove the impugned functionality from its devices and rewrite parts of its source code alleged to have been copied. We respectfully submit, your Honours, that if liability for patent or copyright infringement is established, contrary to Hytera’s case, the matters sought to be raised by the proposed amendments will be relevant to the exercise of the court’s discretion in relation to additional damages, but also in relation to the grant and quantification of other relief for copyright infringement. And we submit that there is sufficient time for the matters to be dealt with at the hearing before the primary judge which commences on these issues – or some of them, at least – in May 2020. And that there has been no material delay for Hytera, and there would be no relevant prejudice to Motorola by reason of these matters being raised.

23    At the same time Hytera informed the Full Court that Hytera’s evidence on the delay defence would be filed in accordance with the current timetable, that is to say, in accordance with the guillotine order made on 11 October 2019 which, it will be recalled, required Hytera to file its lay evidence on the copyright issues by 6 December 2019. Senior Counsel told the Full Court:

[T40.13-23] Hytera’s evidence in the proceedings, your Honours, in answer, is due to be completed by early next month. It’s not on. Some is on, but not all of it. And that evidence, Hytera intends, will deal with the matters sought to be raised by the proposed amended defence, and that is the first time that the matters in question would be required to be raised in the proceedings because they are matters of defence that go to Hytera’s response to Motorola’s allegations. There was no form of prejudice asserted by Motorola arising out of the allowance of these amendments other than issues related to discovery. It wasn’t suggested, and it still isn’t suggested before your Honours, that the matters sought to be raised by the proposed amended defence would be incapable of being dealt with by the primary judge as part of the May 2020 hearing.

…

[T43.24-27] The evidence wasn’t on and wasn’t complete in-chief at the time of the amendment application. And Hytera’s evidence in answer, which is the evidence that would deal with the proposed amended defence, is not due to be filed now until early next month.

24    The Full Court delivered its reasons on 29 November 2019: Hytera Communications Corporation Ltd v Motorola Solutions Inc [2019] FCAFC 210. It granted leave to Hytera to include the delay defence. At [35] it noted what Senior Counsel for Hytera had told it:

We also wish to record that, under current case management orders, Hytera is required to file its evidence in answer to the copyright claim and on the question of additional damages in the coming month. Hytera informed the Court that it anticipates that this evidence will address the steps that Hytera would have taken had Motorola not (allegedly) delayed in notifying Hytera of its allegations of knowing and intentional copying and misuse of information and documentation relating to Motorola’s digital mobile radio devices. Motorola’s responsive evidence is to be filed in March 2020.

25    It is apparent that the Full Court was to an extent persuaded that granting Hytera leave to raise this defence would not disturb the trial dates (which were then scheduled for May 2020).

26    On 18 December 2019, pursuant to the grant of leave by the Full Court, Hytera filed its third further amended defence which contained the delay defence §§35B and 36. These paragraphs are quite long and it is not useful to set them out. However, at no point in the defence is there any allegation that Motorola delayed in suing Hytera because it wished to persuade Hytera to use its DMR standard rather than the competitor standards.

27    On 13 December 2019 the parties began to communicate about the scope of discovery that would be required from each in relation to the delay defence.

28    Mr Vincent says that it was between December 2019 and February 2020 that he received tranches of the transcript of the US proceeding. However, as I explain below it was not until late February or March that Mr Vincent says in his affidavit that he became aware of the fact that Hytera was asserting before the US District Court that Motorola had delayed in commencing its proceeding so as to obtain the support of Hytera for the DMR standard. Despite that, Mr Vincent also said under cross-examination that he was aware in late 2019 that Hytera had a suspicion or perspective (his words) that Motorola had delayed in bringing its case so as to obtain Hytera’s co-operation in relation to the DMR standard. He also understood that if that defence was to be pursued he would need to obtain documents from Motorola on discovery.

29    As will be seen Mr Vincent’s knowledge in late 2019 about Hytera’s suspicion or perspectives raises questions which Hytera’s evidence on the present application does not resolve. From whom, for example, did Mr Vincent obtain his knowledge of Hytera’s suspicions? Mr Vincent was very clear that Hytera’s US attorneys did not communicate to any great extent with its Australian attorneys because of the protective order. As I shortly explain, it is clear that Mr Vincent himself only read the relevant portions of the US transcript in late February or March 2020. The inference I draw is that someone within Hytera told Mr Vincent at some point after 7 November 2019 that Hytera believed that Motorola had delayed its commencement of the proceeding to garner Hytera’s support for the DMR standard. This inference is unsurprising. Hytera was Mr Vincent’s client. Although its attorneys in the US appear to have been tied up by the protective order, I find it impossible to accept that Hytera itself was unaware that its defence in the US trial included the proposition that Motorola’s delay had been brought about by a desire to keep Hytera on the DMR standard.

30    Pointedly, there was no evidence on the present application from any of Hytera’s employees with responsibility for the litigation in the US or Australia.

31    On 12 February 2020 this Court made orders providing for discovery in relation to the delay defence. The Court was informed at that time that the parties had agreed that discovery by Motorola would be limited to the trial exhibits in the US proceeding. Hytera proposed that discovery should be ordered by categories and such an order was made. The categories ordered were defined by reference to a letter from Hytera’s former solicitors dated 29 March 2019. On the topic of the delay defence those categories were as follows:

32    It will be seen that these categories did not include any relating to the DMR issue. It seems to me that this may be significant. Mr Vincent’s evidence under cross-examination was that he was aware by the end of 2019 of the DMR issue and that it would require discovery from Motorola. When the discovery categories were ordered on 12 February 2020 it would have been appropriate to seek discovery in relation to the DMR issue even on what Mr Vincent then knew. But this was not done.

33    On the other hand, as I explain shortly, whilst Mr Vincent had some kind of understanding that Hytera thought that Motorola had decided not to sue Hytera so as to advance its DMR standard, he had not yet seen the transcripts and his understanding of the topic was, I accept, probably less than full. I cannot say that about Hytera’s knowledge of the issue since Hytera has led no evidence about what it knew of the DMR issue, when it knew of the issue, when it gave instructions to the US lawyers about the issue, who gave those instructions, who gave the instructions in the Australian proceedings, whether those were the same people, when those people knew about the DMR issue and so forth. Hytera’s evidence on the present application about its own state of mind is absent.

34    At the hearing on 12 February 2020 Hytera indicated that it would not object if its categories were not used and if Motorola simply discovered all of the trial exhibits. Motorola did not wish to engage in the work which would be necessary to do a relevance review and therefore elected to discover the full set of trial exhibits. This may turn out to have been a false economy. It would appear that if discovery by category had occurred the six documents in question may not have been discovered and the present debate would not have arisen (although I do not need to resolve that issue and express that view only tentatively).

35    Discovery was due to be given by 4 March 2020 under the Court’s orders made on 12 February 2020.

36    The next day, 13 February 2020, Hytera made its closing remarks to the jury in the US District Court for the Northern District of Illinois. At p.5864-5865 its counsel said this:

The other reason though that they didn't file it back in 2010, you heard all the evidence on DMR and dPMR. Motorola backed DMR, put a lot of money into that standard. There was a competing, dPMR. And you've got to get people on the standard. The other manufacturers have to get on and make DMR products, or if they don't, that technology goes by the wayside.

This is a red team document where Motorola says in 2009: We're worried, we're worried that dPMR might become the de facto standard, because we're the only ones pushing DMR, but there are already two manufacturers pushing dPMR.

And guess what? Who weighed in? Who was the first company to join Motorola on DMR? Hytera. Hytera was the first company to join Motorola.

They negotiated a license. They paid for the license. And the whole time this is going on, 2008, '9, '10, they are negotiating this DMR license. Motorola doesn't want to upset that apple cart.

It believed at the time that its business was better served by keeping Hytera focused on DMR, because if you say: Hey, Hytera, your whole DMR is infected with trade secret information, then they'd just say, Well, we've got a dPMR prototype. We'll launch dPMR. And if they do that, then there are no DMR sales. And maybe the de facto standard today would be dPMR, not DMR.

37    Mr Vincent says in his affidavit that during the second half of February 2020 and during March 2020 he reviewed the transcript of the US proceeding which was approximately 6000 pages in length. But he did not identify when he read the parts dealing with the DMR issue. Under cross-examination Mr Vincent said that he became aware of the DMR issue from the transcripts in late February or March 2020. The US transcripts also showed that Mr Grimmett had given evidence in the US proceedings on this issue. Although Mr Vincent had become aware of the DMR issue from the transcripts in late February or March 2020 (and that he understood the issue existed in December 2019), he did not notice that Mr Grimmett had given evidence about the topic.

38    The documents which underpinned Hytera’s defence in the US proceeding include, as I understand it, the six documents about which there is now debate. Those documents were subject to a protective order in the US which prevented Hytera’s US attorneys from disclosing them to its Australian attorneys. Those protective orders did not prevent Hytera from telling Mr Vincent in late 2019 that it suspected that Motorola had delayed its commencement of the proceedings to keep Hytera on the DMR standard. I do not know precisely when Hytera told Mr Vincent this (he says he became aware in December 2019 from an undisclosed source). But I cannot see why Hytera, once it knew of the DMR issue, did not instruct Mr Vincent to raise it in the Australian proceeding. True it is that the protective order may have prevented Hytera from knowing about the six Motorola documents. But Hytera knew that its US lawyers were running the point in the US trial and had opened on it in November 2019. No explanation has been forthcoming from Hytera as to why it did not instruct Mr Vincent about the DMR issue by no later than the time at which its US counsel opened before the jury on the issue. It seems to me an inescapable inference that Hytera must have known of the DMR issue by the time of that opening. Indeed, given trial preparation it is almost certain that Hytera must have known about it in advance of that date.

39    On 4 March 2020 discovery was due to be given by Motorola but was not given that day.

40    The six documents were discovered by Motorola on 11 March 2020 (which was one week late) by means of a list with electronic links to the documents. There were approximately 1,600 documents in this list. The password required to access the documents was not provided until 12 March 2020. Mr Vincent says that this imposed a significant burden on Hytera’s solicitors. He says that it took approximately eight weeks to review the documents due to all of the other activities which were taking place in the litigation at that time (the trial being due to commence in May). Under cross-examination Mr Vincent said that he could not obtain the assistance of the US lawyers for Hytera in finding his way through these documents because the US protective order prevented the US attorneys from doing so.

41    In his affidavit, Mr Vincent said that it was only during that review that he became aware of the six documents. He does not say in his affidavit when during that eight week period that he became aware of them. But under cross-examination Mr Vincent threw more light on this issue. Examining the discovered documents was a priority but Mr Vincent’s firm were also busy attending to other aspects of the litigation. Two lawyers conducted a preliminary review of the documents and reduced the 1600 documents to a core set of 400 documents. Mr Vincent reviewed the core set himself. He was unable nevertheless to say when he first became aware of the six documents but he could say that by the first week of May a smaller subset had been produced for counsel. Following discussion with counsel it was decided, I infer in early May, that an affidavit from Mr Grimmett should be obtained.

42    On 7 May 2020 Hytera’s solicitors informed Motorola’s solicitors that Hytera intended to file evidence in relation to its delay defence arising from the documents discovered by Motorola on 11 March 2020 two months beforehand.

43    On 2 June 2020 Mr Vincent filed an affidavit which the orders made by me on 18 December 2018 required to be filed on a monthly basis updating the Court on the steps Hytera was taking to prepare the case. Mr Vincent’s affidavit of 2 June 2020 did not refer to the preparation of Mr Grimmett’s affidavit. This is perhaps a little surprising since it had been raised a month before hand by Hytera’s solicitors. It is also surprising because on 9 June 2020 (a week later) the affidavit of Mr Grimmett was filed.

44    There was a case management the next day, 10 June 2020, at which time Hytera indicated it would seek to rely upon the affidavit. That announcement then led to the present debate.

Prejudice to Motorola

45    Ms Gilchrist gave evidence about the prejudice that Motorola would suffer if Mr Grimmett’s evidence were now to be permitted. Her first point was that in its current form Hytera’s defence did not raise the DMR question and would therefore need to be amended. As I have already explained, I accept this submission. However, I am disinclined to give it too much weight. Leaving aside any formal objections to the pleading in terms of the way it is expressed, the substantive debate about the amended pleading would largely devolve to an inquiry into whether it would be fair to require Motorola to meet such a defence. Since that is the same question which arises on the present application it would appear that this issue could only arise once I had already determined that Motorola ought to be required to meet Mr Grimmett’s affidavit. On that assumption, it would appear to follow that the amendment would be allowed. Put perhaps more shortly, at least from a case management perspective, the amendment debate largely stands and falls with Mr Grimmett’s affidavit. I therefore think it appropriate to give the fact that there may yet be a contested amendment application perhaps rather less weight that one might ordinarily.

46    That does not dispose of so much of any putative amendment application as relates to formal matters of pleading. However, I do not think it likely that such matters would be likely to put Motorola in a situation with which it could not deal.

47    Next Ms Gilchrist pointed out that if Mr Grimmett’s evidence were permitted then Motorola would need to consider how it was going to meet that case and, in particular, whether Motorola would need to lead further evidence. Ms Gilchrist pointed out that this could well have a knock-on effect on the expert conclaves which is shortly to occur.

48    Under cross-examination Ms Gilchrist accepted that she had become aware from her team that Motorola had called witnesses in relation to the DMR issue in the US proceeding. As she understood it, these witnesses were not amongst the witnesses Motorola was presently proposing to call.

49    To underscore the difficulty of undertaking this work, Ms Gilchrist pointed out that there were numerous steps still to be taken before the trial. These included reaching agreement with Hytera about the list of questions for the expert conference, updating the index to the Court book and the exchange of tender bundles.

50    Another difficulty which existed was the fact that Motorola was having to make arrangements to enable all 13 of its witnesses to be available for cross-examination. All but two of these are resident overseas in the US, Spain or Malaysia.

51    In light of all these matters, Ms Gilchrist was concerned that now to have to undertake a whole new evidentiary topic on the eve of the trial would cause considerable disruption to the pre-trial steps and would cause both parties to incur substantial costs.

Should Hytera be permitted to rely on the affidavit?

52    There is no doubt that Hytera has been aware since at least November 2019 that there was an argument available to it that Motorola delayed the commencement of its proceeding to garner Hytera’s support for its DMR standard. Hytera’s counsel opened on this defence on 7 November 2019 in the US proceeding.

53    It seems, on the other hand, that Mr Vincent did not become aware of the issue until late December 2019. By then the Full Court had granted leave to amend the defence to raise the delay defence but Hytera’s Australian lawyers, I accept, did not know on 25 November 2019 during the Full Court hearing of the DMR issue. Further, and contrary to Motorola’s submisions, I do not accept that anything said to the Full Court prevented Hytera relying on documents subsequently discovered by Motorola. All it indicated was that Hytera’s evidence about what it would have done but for the alleged delay would be filed in accordance with the guillotine order. If the suggested limitation on Hytera existed there would have been no point in granting discovery from Motorola.

54    Nor do I accept that an amended defence including the DMR issue would be inconsistent with the defence in respect of which the Full Court granted leave. The DMR issue is a delay defence of the same kind. It just involves the making of a material allegation not known to Hytera’s lawyers at the time of the hearing in the Full Court.

55    On the other hand, Hytera has not led any evidence about when it, as opposed to its lawyers, became aware of the DMR issue. However, as I have said, this can be no later than 7 November 2019 when the DMR issue was explicitly advanced by Hytera’s counsel to the jury in its opening.

56    If the matter is viewed strictly from Mr Vincent’s position then I would probably accept that Mr Grimmett’s affidavit should be allowed to be used. My reasoning for this is as follows:

57    Once Mr Vincent knew of the issue by the end of December 2019 it would have been necessary for him to obtain discovery about the issue. Hytera did not attempt to seek discovery on the issue on 12 February 2020 which on its face may look like a failure. On the other hand, since the DMR issue is not referred to in the defence filed in consequence of the Full Court’s grant of leave, it seems to me very likely – inevitable given the history of the matter – that Motorola would have objected to the granting of discovery in relation to DMR topic since it was outside the pleading.

58    It would therefore have been necessary for Hytera to amend its defence. It seems to me fair to infer from the fact that someone had been able to tell Mr Vincent about the DMR issue in late December 2019 that the same person could have provided sufficient instructions to allow an amendment application to be made.

59    It seems to me unlikely that this would have been filed much before the end of January 2020. Making the assumption, heroic perhaps, that the amendment application was dealt with on 12 February 2020 it seems to me that Ms Gilchrist’s evidence would have been largely to the same effect that it presently is, that is to say, that the amendment would be inconvenient and expensive to respond to (although not impossible). On that basis, it is likely that the amendment would have been granted and an additional discovery category included relating to the DMR issue.

60    Under that counterfactual, it seems tolerably clear that the six documents would have been produced when they were in fact produced and the parties and the Court would have been in the situation they are presently in.

61    This leads me to infer that whilst I am inclined to think that Mr Vincent should have acted sooner than he did to amend the defence back in January 2020, the documents themselves would not have arrived any sooner if he had. I have not discounted the fact that Ms Gilchrist did not conduct a relevance review and she might well have done so in the counterfactual. However, this appears to be a zero-sum game. Either Ms Gilchrist had to conduct a relevance review of the trial exhibits or Mr Vincent did. The delay is likely to have been the same under either outcome.

62    So if the question turned on Mr Vincent’s delay, I would incline to the view that his delay has not had much real effect. But Mr Vincent’s delay is not the question. The question is Hytera’s delay and here, as I have already observed, there is no evidence from Hytera. But the evidence of Mr Vincent and the evidence put on by Motorola demonstrates that Hytera knew prior to 7 November 2019 about the DMR issue and that it was part of its delay defence in the US proceedings. There was no reason why Hytera could not have instructed Mr Vincent to begin working on the DMR aspect of the delay defence on or around 7 November 2019 when Hytera opened on the issue to the US jury. It was not suggested that Hytera did not know that this was one of its defences in the US. There is no evidence that Hytera did not receive the transcripts of those proceedings. There is no evidence that there was some practical reason within Hytera which might have delayed it in giving those instructions to Mr Vincent. Instead the Court is left to work out Hytera’s position through Mr Vincent’s evidence.

63    I infer Hytera knew of its appeal before the Full Court on the question of its delay defence which I do not think Mr Vincent and Senior Counsel pursued without instructions. Although Mr Vincent did not know of the DMR issue on 25 November 2019 when its counsel argued the appeal, Hytera certainly knew about it. Yet it did not instruct Mr Vincent to inform the Full Court of the matter. Indeed, it appears not to have told Mr Vincent about it at all. It is not necessary for the purposes of these reasons to speculate why Hytera withheld this information from the Full Court or whether the Full Court would have allowed the appeal had it known that the delay defence included the DMR issue.

64    Turning then to Motorola’s prejudice, it is first necessary to observe that these parties have already had this debate once before the US District Court. The witnesses Motorola will need to call are the same witnesses as were called in that case. I accept that none of these witnesses is presently to be called by Motorola but Motorola knows who they are. Further, it is unlikely to be too difficult to obtain their evidence since it has already been obtained once in the US.

65    Ms Gilchrist is correct when she says that now to permit Mr Grimmett’s evidence to go forward will be discombobulating and expensive but, as Mr Dimitriadis correctly submits, she does not say it would be impossible.

66    I do not think that I should put Motorola to that trouble or expense. Were it a matter of weighing Motorola’s prejudice against Mr Vincent’s delay I would come down on the side of Hytera. But the correct balancing exercise is between Motorola’s prejudice and Hytera’s delay. To my mind, the failure of Hytera to put on any evidence from its own employees on the present application is inconsistent with the position of a party seeking the exercise of an indulgence (here the release from the guillotine order). Further, the evidence before the Court shows that Hytera refrained from informing the Full Court about the DMR issue when it must have known about it.

67    In that circumstance, I do not think it would be fair to put Motorola to this trouble. Hytera should have raised this issue no later than 7 November 2019, quite possibly even sooner. It should have told the Full Court.

68    I refuse the application to rely on Mr Grimmett’s affidavit with costs.

Associate:

Dated:    26 June 2020