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EOS Defence Systems Pty Limited v Pahlavani [2026] FCA 688

Introduction

Justice Stellios, sitting as duty judge in the Federal Court of Australia, has granted a mandatory interlocutory injunction requiring RedTail Technology Pty Ltd (RedTail) and its founder and sole director, secretary and shareholder (Richard Pahlavani), to withdraw all patent applications that claim priority from Australian Patent Application number 2024904131 titled “LASER DIRECTOR, AN ELECTROMAGNETIC SPECTRUM DENIAL DEVICE, A POINTING SYSTEM AND A WEAPON SYSTEM”, including any applications filed under the Patent Cooperation Treaty.

The Applicants, EOS Space Systems Pty Limited and EOS Defence Systems Pty Limited (EOS), claim that making the patent applications amounted to misuse of information and other unlawful conduct by RedTail and Mr Pahlavani based on his previous employment by the Applicants.  The mandatory interlocutory injunction application was brought on an urgent basis, with the proceedings commenced on Friday 29 May 2026, the hearing of the application occurring on Monday 1 June 2026 and Justice Stellios delivering his decision on Tuesday 2 June 2026. The proceedings continue, with the case now in the hands of Justice Moore, with a case management hearing before Justice Moore scheduled for 6 August 2026.

Background

EOS is in the business of designing and manufacturing advanced technology systems including remote weapon systems, high energy laser weapons, AI-enabled command-and-control for layered counter-drone capability, and ground-based space control capabilities for precision tracking, intelligence and deterrence. EOS’ clients include defence and military forces around the world.

EOS had employed Mr Pahlavani as a laser engineer between January 2021 and March 2024. Mr Pahlavani’s employment contract with EOS contained confidential information and intellectual property clauses. While at EOS, Mr Pahlavani worked on a project relating to a laser system or anti-drone system (Laser Rifle).

Mr Pahlavani resigned from EOS in March 2024. He then incorporated RedTail in August 2024. In December 2024, RedTail filed a provisional patent application: Australian Patent Application number 2024904131 entitled “LASER DIRECTOR, AN ELECTROMAGNETIC SPECTRUM DENIAL DEVICE, A POINTING SYSTEM AND A WEAPON SYSTEM” (the 131 Application), with an application subsequently being filed under the Patent Cooperation Treaty (the PCT Application).

EOS alleged that Mr Pahlavani had used and/or disclosed, without permission, confidential information obtained from his employment with EOS in preparing these patent applications.

Key Issues

EOS filed these proceedings seeking orders permanently restraining Mr Pahlavani and RedTail from using/disclosing confidential information obtained from Mr Pahlavani’s employment with EOS (the Confidential Information), pecuniary relief, and delivery and destruction of the information.

EOS sought this relief on the basis that Mr Pahlavani had allegedly:

(1)    contravened s 183 of the Corporations Act 2001 (Cth);

(2)    breached an equitable obligation of confidentiality owed to EOS;

(3)    breached the terms of his employment contract with EOS; and

(4)    breached his fiduciary duty to EOS

EOS also alleged that RedTail had been knowingly involved in Mr Pahlavani’s contravention of s 183 of the Corporations Act, had breached an equitable obligation of confidentiality owed to EOS, had induced Mr Pahlavani’s breach of his employment contract, and had been knowingly involved in Mr Pahlavani’s breach of fiduciary duty to EOS.

Critically, EOS also sought an urgent mandatory interlocutory injunction requiring RedTail (and Mr Pahlavani) to withdraw all patent applications that claim priority from the 131 Application, including any applications filed under the Patent Cooperation Treaty. It is this mandatory interlocutory injunction application which was the subject of Justice Stellios’ decision.

Justice Stellios decided the mandatory interlocutory injunction application on the basis of the alleged contravention of s 183(1) of the Corporations Act. Section 183(1) provides that a person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to (a) gain an advantage for themselves or someone else or (b) cause detriment to the corporation.

Justice Stellios applied the undisputed principles applicable to interlocutory injunction applications in determining whether to grant the injunction, namely:

• Whether there was a serious question to be tried;
• Whether the balance of convenience favoured the making of the order; and
• Whether damages would not be an adequate remedy.

In addition to these undisputed principles, Mr Pahlavani and RedTail submitted that the mandatory character of the interlocutory injunction (which required RedTail and Mr Pahlavani to perform a specific positive action i.e. to withdraw the patent applications) should be a factor that weighs heavily against the order being made. While Justice Stellios considered that the fact that the order sought required Mr Pahlavani and RedTail to take certain action was a factor to consider on the interlocutory application, his Honour also considered that the character of the order was akin to an order that would have restrained them from filing the patent applications if the order had been sought beforehand. Accordingly, the order sought could in substance be characterised as an order to refrain from prosecuting the patent applications.

Serious Question to be Tried

EOS succeeded in persuading Justice Stellios that there was a serious question to be tried in respect of the alleged contravention of s 183(1) of the Corporations Act. His Honour considered that the uncontested expert evidence filed by EOS established that concepts that formed part of the EOS project on the Laser Rifle (to which Mr Pahlavani contributed and in relation to which he had access) were concepts forming part of the PCT Application. This led to the conclusion that there was a serious question to be tried as to whether Mr Pahlavani improperly used information obtained because he was an EOS employee to gain an advantage for himself and for RedTail.

In reaching this conclusion, Justice Stellios rejected the following arguments from Mr Pahlavani and RedTail:

• That EOS had not specifically identified the information alleged to be confidential. His Honour disagreed, finding that the confidential information had been specifically identified, with his Honour’s view being strengthened by the fact that Mr Pahlavani had been able to “engage” with the alleged confidential information allegations.
• That the alleged confidential information was not in fact confidential. His Honour considered that the position was not presently clear on the evidence before him and, so, it did not displace the existence of a serious question to be tried. Further, his Honour noted that s 183(1) of the Corporations Act required consideration of whether Mr Pahlavani and RedTail had improperly used information (not confidential information).
• That EOS’ actions had given rise to an estoppel on the basis that Mr Pahlavani had allegedly disclosed that he had a pre-existing project to EOS and EOS had agreed that he could continue to own and develop the technology the subject of that pre-existing project. His Honour considered that the possibility of an estoppel argument was insufficiently clear to undermine the fact that there was a serious question to be tried.

Balance of Convenience

EOS then went on to successfully persuade his Honour that the balance of convenience favoured the grant of the mandatory interlocutory injunction.

EOS argued that:

• If allowed to proceed, the PCT Application and the 131 Application would become public on or about 18 June 2026, so destroying the confidentiality of the information. This would impact EOS’ ability to commercialise its product (particularly given the nature of their customer base, being defence and government organisations which mandate strict confidentiality protocols), leading to lost future sales and significant waste of invested resources. Competitors would also potentially be able to reverse-engineer or replicate the technology.
• Even if EOS was entitled to be assigned any patent arising from the PCT Application, that would not address the harm identified above. Justice Stellios considered that this factor and the previous factor weighed heavily in EOS’ favour.
• EOS accepted that they might need to give an undertaking as to damages which would protect RedTail’s and Mr Pahlavani’s position.  In contrast, RedTail and Mr Pahlavani did not have the means to meet an adverse pecuniary relief order. This meant that, even if damages were an adequate remedy, there would likely be no compensation flowing to EOS. Justice Stellios accepted this submission.

In answer to EOS’s position, RedTail and Mr Pahlavani argued that:

• They would suffer material prejudice, in particular that the injunction sought would put an end to the current patent applications. This would result in a lost opportunity to seek patent protection in multiple jurisdictions on the basis of the current priority date, and consequent financial loss for RedTail and Mr Pahlavani given the investment made in the patent applications. RedTail and Mr Pahlavani would also be unable to obtain outside investment in RedTail’s business because investors would be unwilling to invest in a product without patent protection. Further, EOS’ proffered undertaking would be insufficient to adequately address that prejudice, and damages would not be an adequate remedy. While his Honour accepted that RedTail and Mr Pahlavani would suffer the detriment outlined above and that there might be some challenges for any assessment of damages, Justice Stellios was not persuaded that the lost opportunity from the forced withdrawal of the patent applications was not compensable in the ordinary way. His Honour noted that EOS had offered the usual undertaking, and that it was uncontested that they had the financial means to satisfy an award for damages.
• EOS had delayed bringing its application for a mandatory interlocutory injunction. While his Honour accepted that there had been some delay, Justice Stellios did not consider this delay to be disentitling.
• EOS had approached the Court with unclean hands, including because of the matters that formed the basis of the estoppel claim. His Honour did not give weight to this argument.
• There was no serious question to be tried. For the reasons set out above, his Honour did not give weight to this argument.
• There was an alternative mechanism suggested to EOS, of seeking the redaction of passages from the PCT Application. RedTail’s and Mr Pahlavani’s counsel, however, conceded during the hearing that there would be no guarantee that such an option would be effective.

Outcome and Implications

Accordingly, Justice Stellios granted the mandatory interlocutory injunction, subject to EOS providing the usual undertaking as to damages. The 131 Application has now been withdrawn, with its status showing as “lapsed” on the Australian patents register.

Justice Stellios’ decision will be welcome news for employers for whom enforcement of confidentiality obligations owed by former employees is critical. His Honour’s decision continues the recent run of interlocutory injunction cases heard by the Federal Court of Australia in the context of patent disputes, albeit the fundamental dispute here related to an alleged misuse of confidential information. Justice Stellios’ decision illustrates the swiftness with which the Federal Court can hear and determine interlocutory injunction applications. Justice Stellios’ decision also illustrates the Federal Court’s willingness to grant an interlocutory injunction where the facts justify the grant of the injunction, even when, as in this case, the enjoined party loses the opportunity to pursue a valuable property (patent) right as a result.

About Pearce IP

Pearce IP is a privately owned/independent, specialist, life-sciences focussed, intellectual property/law firm offering lawyers and attorneys in Australia and New Zealand.

Our lawyers and attorneys specialise in pharma, biopharma, biotech, ag-tech, food-tech, med-tech, although our work is broader than these industries.

In 2025, Pearce IP was honoured by Australasian Lawyer and New Zealand Lawyer as a Top Specialist Firm, 5 Star Employer of Choice, and the “Standout Winner” for Inclusion and Culture (<100 employees).  Pearce IP and its leaders are ranked in every notable legal directory including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, Best Law Firms, among others.

Pearce IP is the only leading IP firm in Australia and New Zealand with a female founder, and is certified by WEConnect International as women owned.

The NOCO Company v Brown and Watson International Pty Ltd [2026] FCAFC 44

Introduction

On 10 April 2026, the Full Court of the Federal Court of Australia delivered its decision in NOCO’s appeal from the primary judge’s decision in The NOCO Company v Brown and Watson International Pty Ltd [2025] FCA 887.  Our article on the primary judge’s decision is available here.

The Full Court dismissed NOCO’s appeal, rejecting NOCO’s challenges on obviousness and the correct priority date for assessing novelty.  Notably, however, the Full Court overturned the primary judge’s decision that the relevant date for assessing NOCO’s knowledge of the best method of performing the claimed inventions was the filing date of the priority document and not the later filing dates of each of the divisional applications containing the complete specifications for the patents in suit.  As a result, the Full Court assessed the best method ground at these later dates, finding that the specification for each of the patents did not disclose the best method known to NOCO of performing the invention.

Background

The case concerned three Australian patents held by NOCO, relating to portable vehicle battery jump starter apparatus with safety protection:

• 2020201223 (the 223 Patent)
• 2021258059 (the 059 Patent)
• 2022201338 (the 338 Patent)

All three patents were from the same family, each claiming priority from PCT/US2014/045434 (PCT 434) filed on 3 July 2014 (the Asserted Priority Date).

The patents addressed safety problems with traditional jump starter devices, where jumper cables could accidentally contact each other or be connected with reverse polarity, causing sparking and potential injury.  The patented solution involved a control system that detected both battery presence and correct polarity before allowing a power switch to connect the internal battery to the external vehicle battery.

Although many claims were in issue, considerable attention was given to Claim 1 of the 223 Patent, which claims as follows (following the Court’s added integer sub-numbering):

NOCO brought proceedings against B&W, alleging infringement of the patents by B&W’s ‘Projecta’ brand jump starters.  B&W cross-claimed, seeking to invalidate all asserted claims on grounds of lack of novelty, lack of inventive step, failure to disclose the best method, lack of support, insufficiency and lack of utility.

The lack of novelty ground depended largely on whether the three patents were entitled to the Asserted Priority Date of 3 July 2014.  The primary judge found that many of the asserted claims were not entitled to the Asserted Priority Date, and, given NOCO’s concession that claims not entitled to the Asserted Priority Date would be invalid for lack of novelty, these claims failed on that basis.  The primary judge found that all of the asserted claims were invalid for lack of inventive step, but concluded that the best method ground was not made out.  It was not necessary for the primary judge to consider the remaining grounds of invalidity.

Key Issues on Appeal

Lack of Inventive Step

The Full Court rejected all of NOCO’s grounds of appeal challenging the primary judge’s decision that all of the Asserted Claims were invalid for lack of inventive step.  In rejecting NOCO’s challenge to the primary judge’s findings, the Court stated (amongst other things) that:

• The expert evidence established that the primary judge’s observation that inclusion of the arrangement in integers 1.6 and 1.7 in a jump starter device would have been a matter of routine involved an acceptance that there was a known problem, with a known solution, and the skilled person would choose and apply that solution without any difficulty in a jump starter having all the features of Claim 1 of the 223 Patent.
• The primary judge did not fail to assess obviousness using the skilled team as a whole.  The primary judge combined the common general knowledge of each of the product designer and the electrical engineer comprising the notional team when concluding that the invention was obvious.
• The primary judge was clearly alive to the issue of hindsight, and was satisfied that the expert evidence was not tainted or otherwise affected by any hindsight.
• An invention may be obvious even if there are numerous other obvious routes as well.  It is therefore not a requirement to find that a skilled person would be motivated to follow a single path and no others.
• When considering whether an invention is obvious in light of the common general knowledge plus a prior art document (under section 7(3) of the Patents Act), it is sufficient if the prior art document adds to the common general knowledge something that renders the claimed invention obvious in any relevant way.  Further, the question is not whether the prior art document would have led directly, and as a matter of routine, to the claimed invention, as that is not the question to which section 7(3) of the Act is directed.  Section 7(3) directs attention to the combination of information in the common general knowledge and the s 7(3) document.  And, the fact that a witness has reservations in respect of certain aspects of a document does not, without more, lead inevitably to the consequence that the skilled person would entirely disregard the document.

Priority Date

The Full Court also rejected all of NOCO’s grounds of appeal challenging the primary judge’s decision that none of the asserted claims were entitled to the Asserted Priority Date.  As a result, these claims lacked novelty as NOCO had conceded that claims not entitled to the Asserted Priority Date would be invalid for lack of novelty.

The Full Court agreed with the primary judge that the following two essential features in the priority document (PCT 434) were missing from the asserted claims:

• The use of a FET switch which was consistently identified as essential (not merely illustrative) throughout PCT 434.  PCT 434 also did not disclose the possibility that other types of power switches, such as electromagnetic switches, might be used.  In contrast, the asserted claims encompassed the use of any type of power switch.
• The use of two sensors to detect presence and polarity respectively which was consistently identified as essential in PCT 434.  In contrast, the asserted claims included claims which did not require the use of two sensors.

Accordingly, the invention claimed in each of the asserted claims was not disclosed in PCT 434, and so was not entitled to claim priority from PCT 434.

Best Method

At first instance, the primary judge had found that the relevant date for assessing NOCO’s knowledge of the best method of performing the claimed inventions was the filing date of PCT 434 (i.e. 3 July 2014), and not the later filing dates of each of the divisional applications containing the complete specifications for the Patents (being dates in 2020 to 2022).  If the relevant date was the date of filing PCT 434, this ground of invalidity failed.  However, if the relevant date was the filing date of each of the divisional applications containing the complete specifications for the Patents, then there was a factual issue as to whether NOCO was aware of a better method of performing the invention in 2020 to 2022 than that which was disclosed in each of the patents.

The Full Court overturned the primary judge’s decision on this point, finding that the language of the relevant statutory provisions and the previous judicial decisions supported the conclusion that the relevant date for ascertaining the patentee’s knowledge of the best method is the date of filing the complete specification for the patent in suit, not the earlier date of a PCT specification.

The Full Court also considered that to use such a time of filing did not create any unjustifiable asymmetrical burden on NOCO for the following reasons:

• NOCO had, through the divisional applications, claimed an enlarged monopoly in comparison to that claimed in PCT 434.
• The relevant claims in PCT 434 were limited to a jump starter with a FET switch and two sensors.  However, NOCO had discovered that such a switch was unreliable and removed that limitation from the relevant claims in the specifications in the divisional applications without disclosing that a different switch ought to be used.
• Accordingly, it was appropriate that NOCO be required to make a disclosure corresponding to the enlarged monopoly claimed in the divisional applications.  Not to require such disclosure at the later time would be contrary to the policy underpinning the best method requirement and would allow NOCO to withhold knowledge of the best method known at that later time.

As a result, the Full Court held that the specification for each of the patents did not disclose the best method known to NOCO of performing the invention.

Outcome and Implications

Accordingly, the Full Court dismissed NOCO’s appeal and ordered that NOCO pay B&W’s costs of the appeal.  The Full Court’s decision provides valuable guidance on the test and relevant evidence for lack of inventive step, as well as the correct approach to determining whether a patent is entitled to a priority date earlier than its filing date.  Most importantly, the Full Court has confirmed that the relevant date for assessing a patentee’s knowledge of the best method of performing the claimed inventions is not the filing date of the priority document but is instead the later filing dates of each of the divisional applications containing the complete specifications for the patents in suit.  Patent attorneys will need to be cautious when recommending a divisional filing strategy to ensure that applicant clients are aware that they may have an obligation to update their disclosures of best method (if a better method has been developed in the intervening time period).

About Pearce IP

Pearce IP is a privately owned/independent, specialist, life-sciences focussed, intellectual property/law firm offering lawyers and attorneys in Australia and New Zealand.

Our lawyers and attorneys specialise in pharma, biopharma, biotech, ag-tech, food-tech, med-tech, although our work is broader than these industries.

In 2025, Pearce IP was honoured by Australasian Lawyer and New Zealand Lawyer as a Top Specialist Firm, 5 Star Employer of Choice, and the “Standout Winner” for Inclusion and Culture (<100 employees).  Pearce IP and its leaders are ranked in every notable legal directory including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, Best Law Firms, among others.

Pearce IP is the only leading IP firm in Australia and New Zealand with a female founder, and is certified by WEConnect International as women owned.