FEDERAL COURT OF AUSTRALIA Voxson Pty Limited v Telstra Corporation Limited (No 5) [2016] FCA 1097 File number: NSD 2436 of 2013 Judge: PERRAM J Date of judgment: 8 September 2016 Cases cited: Rafferty v Time 2000 West Pty Limited (No.3) (2009) 257 ALR 503 Date of hearing: 30 August 2016 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: No Catchwords Number of paragraphs: 14 Counsel for the Applicant: Mr D Shavin QC Solicitor for the Applicant: DibbsBarker Counsel for the First Respondent: Mr N Murray Solicitor for the First Respondent: Spruson & Ferguson Lawyers Counsel for the Third and Sixth Respondents: Mr A Lang Solicitor for the Third and Sixth Respondents: Baker & McKenzie Solicitor for the Fifth Respondent: Mr P Kerr of Allens ORDERS NSD 2436 of 2013 BETWEEN: VOXSON PTY LIMITED Applicant AND: TELSTRA CORPORATION LIMITED First Respondent OPTUS MOBILE PTY LIMITED Third Respondent VODAFONE HUTCHISON AUSTRALIA PTY LIMITED Fifth Respondent OPTUS NETWORKS PTY LIMITED Sixth Respondent JUDGE: PERRAM J DATE OF ORDER: 8 SEPTEMBER 2016 THE COURT ORDERS THAT: 1. The parties bring in short minutes of order by 13 September 2016 to give effect to these reasons. 2. The matter be listed for further directions on 15 November 2016 at 9.30am. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: 1 On 11 August 2016 I concluded that Voxson should, subject to some matters of detail, have leave to amend its various pleadings and directed the parties to bring in short minutes of order giving effect to the reasons for judgment: Voxson Pty Limited v Telstra Corporation Limited (No 4) [2016] FCA 915. The matter was then listed for further directions on 30 August 2016. At the directions hearing, the parties indicated that they were unable to reach agreement on two aspects of the proposed short minutes of order. The reasons which follow should be read with an understanding of Voxson (No 4). 2 The first dispute between the parties concerned the wording of paragraph 409 of Voxson's proposed Third Further Amended Statement of Claim. In the draft which was before me for the purposes of the argument in Voxson (No 4), paragraph 409 read: The traffic and control channels referred to in paragraph 407 above corresponded to the 'special signalling layer' referred to in each of claims 1-5, 10, 14-16 and 22 of the Vox 1 GPS Patent. 3 Voxson now seeks that it be permitted to plead paragraph 409 so that it reads: The traffic and control channels referred to in paragraph 407 above were, or formed part of, corresponded to the 'special signalling layer' referred to in each of claims 1-5, 10, 14-16 and 22 of the Vox 1 GPS Patent. 4 Optus does not object to the deletion of the words 'and control' but it does object to the replacement of the words 'corresponded to' with 'were, or formed part of'. The deletion of the words 'and control' followed from the conclusions expressed by me at paragraph [18] of the reasons in Voxson (No 4) that the reference to the control channel should be deleted from paragraph 407 and cognate changes made to the balance of the pleading. 5 On the last occasion Voxson conceded that the SUPL POS message was transmitted only over the traffic channel and not over the control channel. This did not mean that there would not be some related signal supporting the SUPL POS message transmitted on the control channel but only that the SUPL POS message itself would only be transmitted on the traffic channel. 6 Voxson now says that even though the SUPL POS message itself only travels along the traffic channel, it still needs to plead its case about the special signalling layer in a way which is consistent with the patent. Mr Shavin QC, for Voxson, submits that the special signalling layer is defined in such a way in the patent that it was broader than merely the traffic channel. Although the SUPL POS message travelled only along the traffic channel, Voxson was obliged to plead that the SUPL POS message travelled on a special signalling layer and the terms of the patent required it to contend that the special signalling layer consisted of more than merely the traffic channel. In support of this argument Mr Shavin took me to page 3 lines 19 to 23 of the patent which read: Preferably said local positioning information signal is transmitted as part of a control layer signal or messaging signal on said mobile telephone system for reception by a mobile telephone receiver which further includes differential global positioning means… Mr Shavin then took me to line 25: Any such control layer or messaging signal will be hereinafter referred to as the "special signalling layer". And to page 8: The special signalling layer can be unmetered and continuous. The communications path also includes a signal layer… And finally to page 8 line 17: The special signalling layer can reside entirely within the control layer or can be interleaved across the control layer and the signal layer. 7 Mr Shavin submitted that the only point of the proposed additional words now propounded for paragraph 409 was so that Voxson could avoid being defeated on a pleading argument. By this he meant, as I understood it, that a failure to plead that the special signalling layer consisted of a control layer and potentially a signal layer (I think assumed in the current debate to be the same as the control and traffic channels respectively) exposed Voxson to a risk that it would be said against it that its version of the special signalling layer did not accord with the patent. Mr Shavin was at pains to say that this position involved no backsliding from the proposition that the SUPL POS signal travelled only on the traffic channel. 8 Mr Lang, for Optus, submitted that Voxson's case was that: (a) the SUPL POS message was the local positioning information signal; (b) which signal travelled on the traffic channel; and, (c) the traffic channel was the special signalling layer. If that was Voxson's factual contention no good could come from loosing into the issues for trial the obscure factual contention now suggested in paragraph 409 about the relationship between the special signalling layer and the traffic and control channels. Explicitly Mr Lang denied that the proposed amendment raised an issue purely of construction. 9 It seems to me that both parties have arrived at the stage where they are jumping at shadows. Mr Shavin was quite plain that Voxson only wished to add the words to meet a foreshadowed possible pleading by the respondents that its pleaded version of the special signalling layer did not accord with the patent. Yet Optus has not yet suggested that it is going to make such an allegation. For its part Optus suspects Voxson of concealing a factual claim which Voxson explicitly denies that it is making. 10 So that there can be no doubt, if Optus or any other respondent wishes eventually to have the Court consider an argument that Voxson's articulation of the special signalling layer does not map onto the corresponding concept in the patent because the special signalling layer is distributed over the control and signal (or traffic) layers then that will need to be explicitly pleaded. If it is not pleaded it will not be entertained. If and when Optus and the other respondents actually plead such a case, then Voxson can file a reply along the lines that Mr Shavin is presently proposing. 11 It follows that at the moment I do not think that the additional words suggested by Voxson should be permitted. 'Corresponded to' will suffice for the current issues between the parties. 12 A similar conclusion applies to paragraphs 413, 418 and 419. 13 The second area of dispute concerned Optus' argument that it should be permitted immediately to present for taxation the costs I ordered Voxson to pay it in Voxson (No 4). I do not propose to do so. In Voxson (No 4) I concluded that Voxson's conduct in pursuing the amendments had not involved unacceptable or unreasonable behaviour (at [28]). Whilst I would not necessarily accept that unreasonable behaviour is always the sine qua non for the immediate taxation of costs, its absence in this case leaves nothing else which might justify such an order: cf. Rafferty v Time 2000 West Pty Limited (No.3) (2009) 257 ALR 503 at [24] per Besanko J ('…or was the result of some form of reprehensible conduct….'). Further, even if that were not so, there may be conceptual difficulties in assessing what the costs to be taxed are, since the costs I ordered Voxson to pay were those thrown away by reason of the amendments. It is not altogether clear that it would be possible to ascertain at this early stage with the requisite precision which of the respondents' costs will, at the end of the day, turn out to have been wasted and which will not. 14 As discussed with the parties, I propose to list the two Voxson matters for a six week trial commencing on 5 March 2018. Costs of the directions hearing on 30 August 2016 are to be costs in the cause. There will be a directions hearing in both Vox 1 and Vox 2 at 9.30 on 15 November 2016. Counsel who are in Melbourne on that day are most welcome to attend that hearing by video link. The parties are to bring in short minutes of order giving effect to these reasons and each of the matters in this paragraph (including the trial listing) by 13 September 2016. At the directions hearing on 15 November 2016, it would be useful if the parties were able to agree a trial preparation timetable for all of the steps leading to the trial such that all trial preparation would be complete by the end of 2017. This will leave a cushion into which the parties may, if propelled by slippage, slide. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 8 September 2016