FEDERAL COURT OF AUSTRALIA

Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Adjournment) [2020] FCA 539

ORDERS

THE COURT ORDERS THAT:

1.    The May 2020 hearing dates be vacated.

2.    The matter be listed for a case management hearing on 29 April 2020 at 9.30 am.

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

REASONS FOR JUDGMENT

PERRAM J:

1    By prayer one of an interlocutory application filed on 14 April 2020 Hytera applies to adjourn the hearing scheduled to commence on 4 May 2020.

2    The principal reason for the adjournment related to administrative difficulties associated with COVID-19 which have arisen. Hytera submitted that seven of its witnesses were located within the mainland of the People’s Republic of China. As a result of the current travel restrictions they would not be able to attend the hearing on 4 May 2020 to be cross-examined on their affidavits. Next, Hytera submitted that The Civil Procedure Law of the People’s Republic of China (1991) prevents those witnesses being cross-examined via video-conferencing while being located in China. The taking of evidence by this Court would be an exercise of sovereignty by the Commonwealth within the territorial confines of China and as such would require the permission of the Chinese State. As such it would be necessary to obtain the permission of China through official channels under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Opened for signature 18 March 1970. 847 UNTS 231 (entered into force 7 October 1972) (‘Hague Convention’). This is a very slow process and will certainly not be complete by the time the trial commences on 4 May 2020.

3    Motorola disputes that Chinese law operates in the way Hytera suggests but it accepts that in practical terms even if this Court were to determine for itself what the content of Chinese law was there would be no way it would be able to secure adherence to its views by the seven witnesses. Motorola therefore concedes that I must accept for practical reasons that the seven witnesses will not be able to be cross-examined via a video-conferencing platform.

4    Confronted with this difficulty, Motorola has indicated that it does not require the seven witnesses for cross-examination. However, it says that once the trial is underway it will seek to rely on other evidence which it says contradicts the evidence given by these witnesses. Motorola has indicated it will submit that I ought not to accept the witnesses’ testimony because of this contradictory evidence.

5    Both parties accept that this procedure would ordinarily involve a breach of the rule in Browne v Dunn (1893) 6 R 67 (‘Browne v Dunn’) at 70-71. As Hytera submitted, it is indeed trite law that there is an obligation on a party to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of the witness’s evidence. In practical terms in this case there are at least two downsides to Motorola’s proposed procedure. First, it may not be fair on the witness for it may be once confronted with the allegedly contradicting evidence that the witness will volunteer an explanation. Secondly, because I will not receive that explanation there is a possibility that the quality of decision-making will be degraded from an instrumental perspective because probative evidence will be omitted from the fact-finding process.

6    Motorola did not dispute these propositions in general but it did say that in due course it proposes to submit that the rule in Browne v Dunn is subject to exceptions and that one of those exceptions applies in this case. That there are exceptions to the rule is not in doubt. For example, the cross-examiner is not obliged to put the obvious to a witness. Perhaps more relevantly it is possible to make a submission, for example, that a statement attributed to a person who is dead ought not to be accepted because it is contradicted by other evidence. What Motorola foreshadows is an argument, in the rather unusual circumstances that the witnesses are neither allowed to enter Australia to give evidence nor allowed to give evidence from China by means of a video-conferencing platform, that it should be relieved of putting this evidence to the witnesses.

7    Motorola does not seek a ruling presently that this course is open to it. Rather, it foreshadows that it will (or may) eventually seek to make such a submission.

8    Hytera submits that to proceed to trial in these circumstances will be unfair on it. One of the advantages which may accrue to it if the matter were tried in the ordinary way could be that once the evidence was put to the witnesses that their responsive evidence might be persuasive. A trial at which the witnesses can be cross-examined (and be re-examined) therefore carries with it the possibility that Hytera’s case may be advanced. Of course, the reverse is also true and Motorola itself potentially suffers the prejudice of being denied the opportunity to expose the witnesses’ explanations as unconvincing.

9    By contrast, under the procedure which may be adopted in the event that the trial proceeds on 4 May 2020, I will be taken to the contradictory evidence and invited to disbelieve the witnesses without hearing their answer. Motorola points out, correctly, that this may not come to pass. It may be that on full argument on the Browne v Dunn issue I come to the view that what Motorola suggests is not procedurally available in which case Hytera will suffer no procedural prejudice.

10    However, Hytera is exposed to the risk that the opposite conclusion is reached and thereby the risk that the Court is not presented with what may be exculpatory material. Motorola did not gainsay that risk but it sought to downplay its significance by suggesting that the issues to which the witnesses’ evidence went was in some ways peripheral. I am not in a position prior to the trial to assess confidently the correctness of that submission.

11    It follows that I must accept that if the trial proceeds on 4 May 2020 Hytera will be exposed to a procedural risk to which it would not be exposed if the trial were to proceed in the ordinary way. I am unable to gauge how serious this risk is but I can say that I am not persuaded that it is necessarily trivial.

12    That prejudice is not, however, the only prejudice which exists. There is prejudice to Motorola if the case does not now proceed. The hearing on 4 May 2020 is a resumed hearing on which I am presently part-heard. The adjournment of the case will delay further an adjudication of the patent infringement allegations which were heard last year. It will delay the determination of the copyright issues. Further, the delay is of uncertain duration. It may be many months before travel arrangements can be made for the witnesses in China to come to Australia even assuming the lockdown in this jurisdiction is lifted in the next few months.

13    There is a further prejudice to Motorola as well. The devices the subject of the present suit are two way radio handsets and base stations with particular firmware. Motorola seeks an injunction to restrain inter alia the distribution of handsets with that firmware. Hytera has now rewritten the firmware. For reasons I have given elsewhere it is possible that Motorola will obtain an injunction in general form restraining Hytera from infringing its copyright and its patents without reference to the particular iteration of the firmware: Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Defence Amendment) [2020] FCA 280. In that scenario, it will be Hytera in the face of such an injunction which will need to consider whether its new firmware infringes. If the grant of that injunction is delayed Hytera will be able to continue, one assumes, to challenge Motorola’s market share for a longer period of time.

14    Hytera has since undertaken not to distribute devices with the earlier firmware in Australia which are the subject matter of Motorola’s suit. I accept in the case of those devices that Motorola’s claim is only for damages and aggravated damages and that this means an adjournment does not prejudice that part of its case. However, I do not accept this means that it suffers no prejudice from any delay. It suffers the prejudice of not obtaining its general form injunction and with it the possibility of Hytera being exposed to contempt charges as a result of continuing to distribute the handsets with the new firmware.

15    Whether this means Motorola would be entitled to an interlocutory injunction restraining the distribution of the reprogrammed devices pending the resumption of the trial is not a direct issue on the present application. But if Motorola’s contention be correct that it suffers irremediable prejudice by the delay of the trial then I do not think it is inappropriate for me to take into account that it may not be altogether without remedy in that situation (without expressing any view on whether such an injunction would or would not be granted).

16    It is a question then of weighing these prejudices. I feel distinctly uneasy about commencing a hearing in which one possible outcome is the jettisoning of an important rule of cross-examination. Whilst this may be feasible, it is certainly novel and in a sense its implications are uncertain. Although I share Motorola’s enthusiasm that the trial should proceed I do not think that I should risk embarking upon what may turn out to be a mistrial in the pursuit of a highly experimental procedural remedy. This has negative consequences for Motorola, I accept. However, on balance I think the scales favour Hytera. In reaching that conclusion I do not disregard the long procedural history of this case. But the current situation is not the result of that history and Hytera is not responsible for the circumstances which have arisen.

17    I do not think the trial should proceed. Hytera accepted that there were some aspects of the trial which could proceed in May. I do not think it is worthwhile to do so. Whilst I was content to fragment the trial into two parts I can see no point in breaking it into three. Doing so will not speed up the process and will only occasion additional expense. Whilst I accept that those parts could proceed I do not see the point of putting the parties through a hearing on a video-conferencing platform when an actual face to face hearing is still going to be necessary and where doing so will not hasten the time at which the trial concludes.

18    For that reason, I indicated to the parties on Monday 20 April 2020 that the hearing would be vacated. It is not necessary in that circumstance to consider Hytera’s submission that one of its witnesses had contracted COVID-19. However, I would have rejected that as a reason for adjourning the trial on the basis of prematurity. It was not clear on the evidence that the witness would not have been able to take part in the trial or, to put it another way, the time had not yet been reached when a call could be made that he could not participate. Even then it might have been possible to accommodate that evidence under some separate arrangement.

19    I also would not have accepted Hytera’s submission that given time zone differences and the problems of conducting a remote trial, it was not appropriate for the trial to proceed. As I have explained elsewhere (Capic v Ford Motor Company of Australia Limited (Adjournment) [2020] FCA 486), I do not accept in the present circumstances that those problems are insurmountable or sufficient to adjourn a hearing in most cases. With the resources of these parties, that is particularly true.

20    I will list the matter for a case management hearing on Wednesday 29 April 2020 to chart the further progress of the matter. Issues for consideration include:

(1)    whether the trial can be given special priority when a hearing becomes possible. Here I have mind adjourning other proceedings which may be currently listed before me so that this case can be dealt with as soon as possible;

(2)    whether the procedure under the Hague Convention should be commenced now to cover the eventuality that the witnesses may not be able to travel to Australia for an extended period of time;

(3)    whether the witnesses may at some point be able to travel to Hong Kong and whether the Hague Convention difficulty would be as serious a problem in the case of Hong Kong; and

(4)    whether, if the matter is to be delayed substantially, there is merit in bringing into the case the question of whether the reprogrammed devices infringe Motorola’s patents and/or copyright.

21    I will make no order as to costs. Neither party bears any responsibility for the present situation.

Associate:

Dated:    23 April 2020