FEDERAL COURT OF AUSTRALIA Polaris Communications Pty Ltd v Dynamic Hearing Pty Ltd [2008] FCA 1111 POLARIS COMMUNICATIONS PTY LTD (ACN 006 102 601) v DYNAMIC HEARING PTY LTD (ACN 098 878 212) and PLANTRONICS PTY LTD (ACN 080 486 193) VID 676 OF 2006 SUNDBERG J 30 JULY 2008 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 676 OF 2006 BETWEEN: POLARIS COMMUNICATIONS PTY LTD (ACN 006 102 601) Applicant AND: DYNAMIC HEARING PTY LTD (ACN 098 878 212) First Respondent PLANTRONICS PTY LTD (ACN 080 486 193) Second Respondent JUDGE: SUNDBERG J DATE OF ORDER: 30 JULY 2008 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. On the applicant's motion notice of which was filed on 2 May 2008, the respondents provide to the applicant's solicitors an unredacted copy of the Technology Licence and Distribution Agreement between them dated 14 February 2005 (excluding Annexure B thereto), to be inspected only by the applicant's solicitors and counsel who have first signed an agreed confidentiality undertaking. 2. The applicant's motion be otherwise dismissed. 3. The second respondent's motion notice of which was filed on 17 June 2008 be dismissed. 4. The parties bear their own costs of each motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 676 OF 2006 BETWEEN: POLARIS COMMUNICATIONS PTY LTD (ACN 006 102 601) Applicant AND: DYNAMIC HEARING PTY LTD (ACN 098 878 212) First Respondent PLANTRONICS PTY LTD (ACN 080 486 193) Second Respondent JUDGE: SUNDBERG J DATE: 30 JULY 2008 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There are two motions before me. The first is that of the applicant (Polaris) seeking production by the respondents of full technical specifications of the M15D device on which Iain McNeill performed certain measurements on 21 February 2008 as referred to in paragraph 5 of his affidavit affirmed 27 February 2008 …. Mr McNeill's affidavit, and his later one of 24 June, are filed on behalf of the second respondent (Plantronics). 2 Paragraph 5 of the 27 February affidavit is as follows: On 21 February 2008, I performed a measurement of the acoustic limit for speech for a M15D, and a Polaris SoundShield (SoundShield). The measurement was conducted using a Plantronics H51N‑TT3 headset placed on the ear of a calibrated B&K 4128 Head and Torso Simulator. The M15D and SoundShield used in the measurement were set to the same settings as those used in the testing conducted by the first respondent, Dynamic Hearing Pty Ltd, which is the subject of these proceedings. Mr McNeill then produced a note in which he recorded the methodology he followed in taking the measurements, and a summary and graphical representation of the measurements (the note). 3 Polaris' motion is made in reliance on Order 17 of the Rules of Court. When the motion came on for hearing, the relief sought changed to an order that the respondents provide a complete and unredacted copy of the Technical Specification identified in paragraphs 4 and 6 of the affidavit of Iain McNeill affirmed 24 June 2008 …. The change was brought about by Polaris having received Mr McNeill's later affidavit after it had filed its motion. 4 Paragraph 4 of the 24 June affidavit is as follows: In my role as the lead engineer for the design and development of the M15D, I was involved in the development and production of a technical specification for the M15D (the Technical Specification). The Technical Specification describes in detail the design and technical properties of the M15D, including details of how the M15's hardware, software and firmware function. In par 5 Mr McNeill deposes to the "highly confidential and commercially sensitive" nature of the Technical Specification. He continues in par 6: There is only one Technical Specification for the M15D, which is the Technical Specification for the production version of the M15D. The Technical Specification contains no information about the differences between different revisions of the operating software and firmware for the M15D. For this reason, it is not possible to test the 'technical equivalence' of different M15D devices by reference to the Technical Specification. 5 The parties are in dispute as to the relevance of the Technical Specification to the proceeding. Polaris asserts relevance on three grounds. The first is that it is relevant to the limiting setting used by Plantronics in the comparison report prepared by the first respondent (Dynamic) upon which Polaris' complaints are based. Polaris claims that Mr McNeill's evidence goes to verifying a limiting setting of 95db referable to a "technically equivalent" device. Polaris wishes to challenge that evidence by querying the assertion of technical equivalence. It proposes at trial to claim that technical equivalence has not been proved because there is no other technical specification available. 6 Polaris' second basis for relevance of the Technical Specification is so it can check, and if appropriate cross examine on, the technical settings Mr McNeill adopted in connection with his testing of the limiting settings of the two devices. Reliance is placed on par 15 of the affidavit of Polaris' solicitor, James Mangopoulos: I am informed by Trevor Guest of Polaris and believe that the technical specifications of the ADRO devices, including their different settings and the particular settings used in a particular test will provide information relevant to: (a) the acoustic limits of the devices; (b) whether or not two different devices are in fact technically equivalent in respect of certain matters; and (c) whether or not tests conducted on a particular device are likely to reflect the results obtained if a different device had been tested (ie whether the test results reported by Mr McNeill are a useful guide to the characteristics of the test device). Counsel said that Polaris wants to be able to challenge Mr McNeill's note on the basis that he has not adopted settings that would be warranted by the technical specifications, which would include information relevant to the settings. (Mr Mangopoulos' informant, Trevor Guest, is a director of Polaris. Though not possessed of formal technical qualifications, Mr Guest has had more than twenty five years experience in the sale of telecommunications equipment in Australia, together with knowledge of a wide variety of technical matters associated with sound regulation generally.) 7 The third basis for relevance derives from Mr McNeill's note, in which he describes the configuration of the Polaris and Plantronics adapters. So far as presently relevant, the note says that Polaris' SoundShield was set to "Limiting Mode 1" and Plantronics' M15D to "Limiting Mode 3". Polaris asserts that Mr McNeill has not explained why Mode 3 was chosen for the Plantronics device rather than Mode 1 or 2. It says the explanation is likely to appear in the Technical Specification. Polaris refers to the expert evidence filed on its behalf by Michael Fisher, who invented sound shield technology. In his affidavit of 10 April 2008 at [56] Mr Fisher says that until he read Mr McNeill's note he was unaware that there were alternative limiting modes within M15D. The documents in his possession when he swore his affidavit gave the limited setting for the Plantronics device as "Terminal Setting A". Polaris says that reference to the Technical Specification is likely to assist in clarifying what is meant by there being limiting modes 1, 2 and 3. 8 In my view none of the bases for relevance of the Technical Specification is made out. As to the first, whether the technically equivalent device is in fact technically equivalent does not arise on the pleadings. It is not a "matter in question" in the proceeding for the purposes of Order 17 rule 1. 9 Paragraph 8 of the Amended Statement of Claim pleads the "lowest limiting setting representation", namely that the testing of the two devices at their lowest limiting settings provided an appropriate comparative basis for testing for intelligibility of speech. Paragraph 9 asserts that this representation was misleading because the lowest limiting setting at which SoundShield was tested was significantly lower than that for the Plantronics device, and the test results consequently conveyed a misleading assessment of the comparative performance capabilities of SoundShield. 10 The particulars to par 9 are lengthy and can be summarised as follows: · SoundShield's lowest limiting setting is 80db · the comparison report states that SoundShield was set to the lowest limiting setting · a Plantronics discovered document states that SoundShield was set at limiter setting 1 (95db) · the lowest limiting setting of the Plantronics device is 102db, as appears from technical specifications published by Plantronics · this setting accords with Polaris' measurements to verify the acoustic ceiling of the 'technically equivalent' device provided to Polaris pursuant to the order of 17 May 2006. While the particulars refer to a 'technically equivalent' Plantronics device, the pleadings do not raise the issue whether the device is in fact technically equivalent. 11 The evidence on liability, both commercial and expert, has been filed, including Polaris' evidence in response. Conformably with the pleadings, Polaris has filed no evidence to the effect that the 'technically equivalent' device is not in fact technically equivalent to the Plantronics device the subject of the comparison report. Nor has it filed evidence on the matters the subject of the particulars referred to at [10]. 12 I do no accept the second basis for relevance. The ground upon which Polaris says it needs the Technical Specification is so it can check on the technical settings Mr McNeill used in his testing of the limiting settings of the devices. Mr McNeill's notes are before the Court. The settings he used require no checking by reference to other documents. 13 The third basis is not supported by the evidence. Polaris says Mr McNeill does not explain why he chose 'Limiting Mode 3' in his measurements. That is not so. In his affidavit of 24 June 2008 at [15] Mr McNeill says he used that mode because it is the lowest acoustic limit setting "(ie the setting that applies the least amount of limiting)". He also says that the limiting regime provided by that mode causes the 125ms RMS speech average for the M15D to be limited to 95db at the drum reference point. 14 Paragraph 1(c) of Polaris' motion must be dismissed. Paragraphs 1(a), (b) and (d) were not pursued. 15 Polaris' motion also seeks an order that the respondents produce to its solicitors a complete and unredacted copy of the Technology Licence and Distribution Agreement between the respondents dated 14 February 2005. In August 2007 the respondents provided Polaris with a heavily redacted copy of the Agreement. The blanked out parts are said to be material that is both irrelevant to the proceeding and commercially sensitive. The Agreement and annexures consist of 76 or so pages. The first 32 pages are numbered. The balance are not. Sixty pages are totally blanked out. Two pages are not. The balance are partially blanked out. 16 Plantronics has also filed a notice of motion in which it seeks leave to produce the Agreement for inspection in the redacted form. Inspection is to be limited to partners and employees of Polaris' solicitors and to counsel retained by it, who must sign a confidentiality undertaking. 17 The Agreement is referred to in Particulars of Plantronics' Defence and is required to be produced under Order 15 rule 10 of the Rules of Court. Plantronics accepts that it must provide the unredacted Agreement unless the Court otherwise orders. Hence its motion for leave. 18 Paragraphs 10H and 10I put the detail of any commercial relationship between the respondents in issue by challenging the independence of the comparison report. See in particular 10I(a), (b) and (d) and Particulars (a) and (b) thereto. 19 I have inspected the unredacted document. As to many redacted parts, the respondents' assertion of irrelevance and confidentiality is seriously exaggerated. In my view, with the exception of Annexure B, the Agreement is relevant to the issue identified at [18]. Access to the document is to be limited to Polaris' legal advisers who give an appropriate confidentiality undertakings. As I understand the position, the terms of that undertaking have been agreed between the parties. 20 On Polaris' motion I will order that an unredacted copy of the Agreement (except for Annexure B) be provided to its solicitors, to be inspected only by Polaris' solicitors and counsel who have first signed an agreed confidentiality undertaking. Otherwise I will dismiss the motion. I will dismiss Plantronics' motion. 21 Since Polaris and the respondents have had approximately equal measures of success, and the time spent on dealing with the Technical Specification and the redacted Agreement was about the same, the parties will bear their own costs of each motion. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 30 July 2008 Counsel for the Applicant: C Golvan SC and S Gatford Solicitor for the Applicant: GSM Lawyers Counsel for the First Respondent: R Kendall QC and M Lapirow Solicitor for the First Respondent: Ebsworth & Ebsworth Lawyers Counsel for the Second Respondent: P Crennan Solicitor for the Second Respondent: Allens Arthur Robinson Date of Hearing: 27 June 2008 Date of Judgment: 30 July 2008