When Public Disclosure Destroys Novelty But Possibly Not Confidentiality…

UON Pty Ltd v Hoascar (No 2) [2025] FCA 1608

Introduction

This decision highlights the difference between disclosure under patent law and disclosure of confidential information and confirms that, just because an invention has been made “publicly available”, this does not mean that the invention has lost its confidential nature.

Background

The interlocutory application considered in this matter arises from the infringement proceedings the subject of Allied Pumps Pty Ltd v LAA Industries Pty Ltd [2023] FCA 1457 (Allied Pumps (2023)) (see our case summary here).

By way of brief summary of the background and the cast of characters involved in this dispute, it is useful to know:

1. LAA Industries (LAA) was the proprietor of Australian innovation patent AU2020103197 (Patent) for an electric submersible pump used to lift water from underground, commonly used in mining.  The Patent was licensed to UON.  In Allied Pumps (2023), Allied Pumps Pty Ltd sought revocation of the Patent for lack of novelty, while LAA and its licensee, UON, filed a cross-claim asserting infringement.
2. In Allied Pumps (2023), Justice Downes found that the Patent lacked novelty because UON had supplied submersible pumps to another mining company, Roy Hill Iron Ore Pty Ltd (Roy Hill), before the priority date of the Patent, for the purposes of a trial period and that trial amounted to novelty-destroying prior use.  The Patent was therefore revoked.
3. Mr Hoascar was originally employed with UON Pty Ltd, the applicant in these proceedings, which were commenced in 2021.
4. During his employment with UON, Mr Hoascar obtained confidential information about UON’s submersible pumps.  Mr Hoascar’s next employer after UON was Taranis Power Group Pty Ltd (Taranis).
5. When these proceedings were commenced, UON claimed that Mr Hoascar disclosed the confidential information about UON’s pump to Taranis, breaching contractual and equitable obligations of confidence. UON also claimed that Taranis’ use of the information provided by Mr Hoascar amounted to patent infringement.
6. As a result of Allied Pumps (2023) and the Patent being revoked, LAA removed the patent infringement claim from its Statement of Claim in these Proceedings.
7. Mr Hoascar and Taranis subsequently brought an interlocutory application to strike out the remaining substantive aspects of LAA’s Statement of Claim for these Proceedings, namely:
   1. The breach of confidentiality obligations by Mr Hoascar;
   2. Related claims for misleading and deceptive conduct and breach of fiduciary duties by Mr Hoascar; and
   3. Breach of confidence claims against Taranis,

saying that it would be an abuse of process in light of the findings in Allied Pumps (2023) that the Patent was not novel at its priority date.

The current decision sets out Justice Jackson’s findings in relation to Mr Hoascar’s and Taranis’ interlocutory strike out application.

Key Issues

Justice Jackson held that whether the strike out application should succeed depended on whether the information passed from Mr Hoascar to Taranis and used to Taranis’ commercial advantage was, in fact, confidential and the subject of confidentiality obligations, given that the Patent had been revoked for lack of novelty at its priority date.

His Honour relied strongly on Justice Downes’ findings in Allied Pumps (2023) regarding whether the trial period of the submersible pumps with Roy Hill resulted in a destruction of the confidential nature of the relevant information.  Justice Downes had found that:

• Roy Hill had not been subject to any confidentiality obligations during the trial period;
• A UON support technician had made information publicly available during their support of Roy Hill employees during the trial period;
• A Roy Hill employee involved in the trial of UON’s submersible pumps “considered himself free in law and equity to tell the world about what he did and observed” (Allied Pumps (2023) at [326]); and
• These factors had contributed to the novelty-destroying prior use.

However, Justice Jackson was clear that patent validity and misuse of confidential information are different concepts at law and the two most not be conflated.

Consideration

When considering whether the disclosures during the Roy Hill trial period resulted in the destruction of the confidential nature of certain information, Justice Jackson stated that “it does not follow…that unfettered disclosure to a small group of persons results in the loss of the necessary quality of confidence…” (at [68]).  His Honour held that:

• demonstration of the submersible pumps to a small number of employees at Roy Hill, even without any confidentiality restraints, did not amount to a loss of confidentiality as a whole (at [71]);
• even though there were prior art documents that also destroyed the novelty of UON’s Patent, it was necessary to take into account that UON relied on express contractual terms to maintain confidentiality of certain information. The presence of a prior art document that destroys novelty does not necessarily destroy confidentiality ([73]-[74]); and
• in line with Justice Downes’ comments in Allied Pumps (2023), the Roy Hill trial period did not necessarily mean that confidentiality of the information had been destroyed.  Whether the disclosure of certain information to a limited number of people constituted a public disclosure destroying confidentiality is “a question of fact, a question of degree, and so a question for trial” (at [82]).

Outcome

For these reasons, Justice Jackson held that the findings in Allied Pumps (2023) did not necessarily prevent UON from pursuing its claims against Mr Hoascar and Taranis in relation to breach of confidentiality obligations.  The strike out application was dismissed with costs.  The proceedings remain on foot, with the parties now preparing the case for a final hearing.  We will update you when and if there is a final judgment on the allegation of breach of confidentiality obligations.

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