The form of the declaration as made
61 On publishing her reasons for judgment, the primary judge made a direction that the parties propose orders reflecting her reasons. The plaintiffs proposed orders that included the declaration quoted at [4] above. Mr Park, the Chou parties, and the Martin parties each responded to the plaintiffs' proposal by providing written submissions. Those submissions did not address the proposed declaration.
62 It can be taken, therefore, that the parties to this appeal considered that, at the time it was being proposed, the declaration was appropriate, given the primary judge's findings, and that there was no legal impediment to it being made. It can also be taken that the parties regarded the proposed declaration as being in proper form and as conforming to the findings that had been made.
63 Notwithstanding this, the Chou parties contend in Grounds 1 and 2 of the appeal that the primary judge erred in making the declaration:
Failure to join a necessary party
1. The learned Trial Judge (Rees J) erred in making declarations (and delivery up orders) in favour of the First to Fourth Respondents (as Plaintiffs in the Court below) (hereinafter, Plaintiffs) in relation to the ownership by Metstech Pty Ltd (Metstech) of copyright, in respect of the Products (as defined in the orders made by her Honour on 5 December 2022 (Orders)) and the Metstech System (as defined in the Orders), in the following works:
(a) printed circuit board (PCB) schematics and layouts;
(b) firmware source code (save for the source code relating to the Raspberry Pi Software);
(c) functional specifications;
(d) test results;
(e) bills of materials;
(f) data sheets; and
(g) manufacturing files,
in circumstances where the Taiwanese company referred to as "Yokao" (also Yo Kao Technology Co Ltd) (J[147]) (Yokao) was neither given notice of the proceedings nor joined to the proceedings by the Plaintiffs, notwithstanding that it was a necessary party to the proceedings, including in circumstances where:
(i) the Plaintiffs and the learned Trial Judge were on notice of the 3rd/4th Defendants' contention that Yokao had created and was relevantly the author of the works referred to in sub-paragraphs (a) to (g) above;
(ii) her Honour found (at J[151], J[574]) that Yokao had been engaged to manufacture the PCBs;
(iii) the expert evidence of the expert witness called by the Plaintiffs, Dr Georgevits, whose evidence was accepted by her Honour (J[23], J[62], J[581]), was, as her Honour recorded (J[598]), that an original design manufacturer (ODM) or "Yokao" could have been involved in generating the electrical schematics and the PCB layouts, writing firmware code, manufacturing and testing prototypes;
(iv) her Honour found (at J[599]) that, to such extent as Yokao assisted with the design and prototyping stages associated with the Metstech products, such tasks were relatively minor compared to the tasks undertaken by the Third Defendant, such that Yokao was neither an author or a joint author of the work within the meaning of the Copyright Act 1968 (Cth); and
(v) the unchallenged evidence of Dr Georgevits (as recorded at J[72]) was that, when design work is completed by an ODM, the question of ownership of the design is ultimately subject to the contractual arrangements between the client and the design house.
2. In the absence of the joinder of Yokao as a party to the proceedings, the learned Trial Judge ought to have dismissed, at least as against the Appellants (the Third and Fourth Defendants in the Court below) (hereinafter, 3ʳᵈ/4ᵗʰ Defendants), the entirety of the claims brought by the Plaintiffs for declaratory relief and other orders in respect of the ownership of intellectual property rights associated with the Products and the Metstech System.
(Emphasis original.)
64 The fundamental submission of the Chou parties is that, as made, the declaration is an order in rem that directly affects "Yokao's" rights. In their submission, "Yokao" was, therefore, a necessary party to the proceeding and, because it was not joined, the declaration (and, as it also happens, the order for delivery up) should be set aside: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 524 (Lockhart, von Doussa and Sackville JJ).
65 These grounds of appeal are supported by Mr Park and by Mr Martin in their respective cross-appeals (Ground 1 in each cross-appeal). They contend that if Grounds 1 and 2 of the appeal succeed then, correspondingly, the entirety of the claims for declaratory relief and other orders in respect of the ownership of intellectual property rights in the "works" identified in Ground 1 of the appeal should be dismissed.
66 These grounds raise an objection that was not raised before the primary judge at the time that orders were proposed. The question arises whether the appellants should be permitted to raise the objection now.
67 The most that can be said on that score is that, during the course of the trial, when the plaintiffs were seeking leave to file their further amended summons which introduced the claim for declaratory relief in prayer 10A, Senior Counsel for the Chou parties said:
But, can I identify for your Honour that part of my client's case is that these items were designed in part, in significant part, by an original design manufacturer, an ODM in Taiwan, and if your Honour made declarations as to copyright they would operate at large against the whole world, and there is no evidence that the ODM in Taiwan has been given any notice of that claim. I'm neutral as to that matter, but I raise that as a practical issue if your Honour was to be asked to and give declaratory relief.
68 The significance, if any, of those observations depends on the actual terms of the declaration to be made - that is, whether any such declaration "would operate at large against the whole world". It is important to note in that regard that, in the face of the Metstech parties' copyright claims, and particularly in relation to the question of declaratory relief, the Chou parties informed the primary judge that they "did not 'seek to be heard' on this subject", except to contend that "Mr Chou did not create or design these products nor prepare the documentation": J[553]. Like the Chou parties, Mr Park and the Martin parties raised no objection to the further amended summons being filed to claim the relief in prayer 10A and said nothing about the need for any joinder of additional parties to the proceeding.
69 We do not think that the appellants should be permitted to raise this objection now. If it was a matter of substance, it should have been advanced, and pressed home, no later than the time at which the proposed orders were before the primary judge for consideration. In coming to this conclusion we are also influenced by two matters. The first matter is that we are not persuaded that these grounds of appeal are soundly based in any event, for the reasons given below. The second matter is that, even if these grounds are soundly based, there is no reason why the declaration cannot be varied to bind the appellants, who took no objection to it at the appropriate time.
70 The case before the primary judge was not so much about the work that "Yokao" carried out or might have carried out, but about the work that Mr Chou in fact carried out, remembering that Mr Chou was an employee of Metstech, not an employee of "Yokao". The contest before the primary judge was whether Mr Chou, as an employee of Metstech, and pursuant to the terms of his employment with Metstech, carried out the particular design work that the plaintiffs alleged he had carried out. In this regard, it was never contended, for example, that Mr Chou was carrying out work for "Yokao" or that the work he carried out as an employee of Metstech was work that resulted, or even could result, in "Yokao" owning copyright.
71 The defensive case advanced by the appellants was a factual case, nothing more. That case was that Mr Chou had not himself carried out any relevant design work, or at least any work of significance. The primary judge rejected that factual case, as is abundantly clear from the findings made by her Honour at J[587], [599], and [603], as well as in other paragraphs of the reasons. Her Honour was satisfied that, as a matter of fact, Mr Chou, in pursuance of his employment with Metstech, had carried out the work covered by the subject matter identified at J[590]. This finding is reflected in the declaration that was made.
72 It is convenient at this point to deal with a particular aspect of the Chou parties' submissions on appeal. They submitted that the Metstech parties were "yielded an unfair forensic advantage" because the Metstech parties had not joined "Yokao" and the Chou parties were therefore left with the burden of proving the design work. This submission rings hollow. As the primary judge correctly recognised at J[39], although the plaintiffs bore the ultimate onus of proof, it was peculiarly within Mr Chou's means to adduce evidence about the very activities he was alleged to have engaged in with respect to the design of the products. After all, it was Mr Chou who, allegedly, had direct and personal dealings with "Yokao", not the plaintiffs. If the evidence of "Yokao" could possibly have informed the primary judge of the activities that Mr Chou, himself, had undertaken, then it was within Mr Chou's power to call that evidence. The joinder of "Yokao" as a party to the proceeding was not necessary for that purpose, and the appellants raised no matter in the course of submissions before us that would indicate that there was any impediment to them calling such evidence. We can only conclude that the appellants exercised a forensic judgment not to do so.
73 Because the plaintiffs' case was directed to the work that Mr Chou had carried out as an employee of Metstech, no rights of "Yokao" were in play. Therefore, there was no obligation on the plaintiffs to join "Yokao" to the proceeding, and no apparent reason why they should have joined it. We conclude, therefore, that the case brought by the plaintiffs involved no arguable possibility of any right of "Yokao" being affected: Victoria v Sutton [1998] HCA 56; 195 CLR 291 at [77] (McHugh J); Ross v Lane Cove Council [2014] NSWCA 50; 86 NSWLR 34 at [57] - [58] (Leeming JA).
74 Once these matters are understood, it is clear that, in making the declaration referred to at [4] above, the primary judge was doing no more than declaring rights as between the parties to the proceeding. This is the proper construction of the order that her Honour made, considered in the context of the reasons for judgment supporting that order: Athens v Randwick City Council [2005] NSWCA 317; 64 NSWLR 58 at [28] (Hodgson JA, with whom Santow and Tobias JJA agreed).
75 Therefore, we are not persuaded that the declaration that the primary judge made was an order in rem. Properly construed, it was an order affecting only the interests of the immediate parties to the proceeding. This is the position of the Metstech parties.
76 A declaration of this kind (i.e., affecting the interests of the immediate parties to the proceeding) was justified, particularly given the defendants' denials that Metstech was the copyright owner, and the contention made at one stage that Welldesign, in fact, held the relevant intellectual property rights: J[580]. The primary judge noted (at J[430]) that the contention that Welldesign held the relevant intellectual property rights was part of a plan to divert Metstech's business, customers, potential investors, and products away from Metstech and Metstech IP.
77 We note that the Metstech parties accept that even if, contrary to their submissions, "Yokao's" interests were affected by the declaration that was made, and that "Yokao" should have been joined as a party, the declaration that was made would not be binding on it: Australasian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119 at 133-134 (Dixon CJ, McTiernan and Taylor JJ). In other words, if, hypothetically, "Yokao" (or, for that matter, any other person except for the defendants) were to advance a claim to copyright ownership inconsistent with Metstech's declared rights, "Yokao" (or such other person) would not be precluded by the declaration from seeking to advance its asserted rights in legal proceedings.
78 As to the form of the declaration itself, a question arose about the ownership of the copyright in "manufacturing files" (sub-para (i) of the declaration): Ground 5 of the appeal. These files are part of the suite of documents described by the plaintiffs as the "Product Manufacture Documentation". The Chou parties argued that, properly construed, the declaration extended to the copyright (if any) in the manufacturing files created by "Yokao" (assuming there to be such files).
79 We do not think that this is what the primary judge had in mind when making the declaration. The Metstech parties accept, however, that, given that the question has been raised, it would be appropriate to make clear that the "Product Manufacture Documentation" (comprising sub-paras (e)-(i) of the declaration) is the documentation "created by Mr Chou in the course of designing Metstech's products and in order to arrange their manufacture": Transcript p 120 lines 1-14. To do so would be consistent with the case they had pleaded and pursued in respect of that documentation: see J[552] and para 67A of the amended commercial list statement. There is no reason why, for the avoidance of doubt, the declaration, as granted, cannot and should not be varied to state this expressly.
80 Perhaps more fundamentally, the Metstech parties accept that, in recognition of its true construction, the declaration could be prefaced by the words: "As between the plaintiffs and the defendants …": Transcript p 130 line 23 - p 131 line 20; Transcript p 148 lines 1-13. Once again, for the avoidance of doubt, there is no reason why the declaration, as granted, cannot and should not be varied in this way.