UON Pty Ltd v Hoascar (No 2)

UON Pty Ltd v Hoascar (No 2) [2025] FCA 1608 is a Federal Court interlocutory decision about whether major parts of a confidentiality case should be struck out after a related innovation patent had already been found invalid in earlier litigation. UON and LAA alleged that a former employee, Mr Hoascar, obtained confidential information about a technical power management system during his employment and later used or disclosed it for the benefit of his new employer, Taranis Power Group Pty Ltd.

The respondents argued that the earlier patent invalidity findings in Allied Pumps meant the relevant system had already been made publicly available, so it was an abuse of process to keep running confidentiality-based claims about it. Jackson J dismissed that strike-out application. On the available reasons, the court accepted that public availability for patent novelty purposes does not necessarily wipe out all confidentiality claims, especially where the pleaded confidential information may not be identical to the invention itself and where express contractual confidentiality obligations are alleged.

The commercial dispute arose from the development of a motor starting, control and power management system said to have specific application to dewatering remote island mine sites and more generally. According to the statement of claim described in the judgment, UON alleged that from 2014 to 2017 its employees invented and developed what it called the New System. The pleading set out technical features of that system, including a generator assembly, automatic voltage regulator, engine control unit, system controller and sensor-based control of engine speed and alternator voltage. It also alleged that the system could be configured by reference to flow and pressure control and, later, flow, pressure and water level control.

UON said it began marketing and offering the New System as the GMC Pro Power from December 2015. Mr Hoascar was alleged to have worked for UON under written employment arrangements and a confidentiality agreement. UON pleaded that those documents imposed broad obligations to keep confidential information secret and to use it only for proper employment purposes. It also alleged that confidential information about the New System was disclosed to him so he could assist with documenting, developing, testing and recording the system.

The pleading then alleged that between December 2015 and February 2016 Mr Hoascar sent instances of that information to his personal email addresses and used a fuel consumption spreadsheet created in the course of his employment. UON also alleged that he resigned from full-time employment but remained employed on a casual basis for a short period, while having already commenced employment with Taranis. UON said that during this overlap he still had access to its confidential information.

UON further alleged that from 10 November 2016 Taranis advertised a product called the VarioGen which operated in the same way as the New System. It said the similarities resulted from Mr Hoascar's use and disclosure of some or all of the New System confidential information and other confidential information. The case also included related allegations involving fiduciary duty, knowing receipt, knowing assistance, constructive trust and breach of confidence by Taranis.

The complication was that this proceeding had originally also included a patent infringement claim concerning Australian Innovation Patent No. 2020103197. That part of the case changed after Downes J held in Allied Pumps Pty Ltd v LAA Industries Pty Ltd [2023] FCA 1457 that the patent was invalid. In that earlier case, the court found the patent lacked novelty because systems supplied to Roy Hill had made the invention publicly available in the patent sense, and because prior art documents also anticipated the patent claims.

That earlier result gave the respondents a procedural opening. They argued that if the invention had already been found publicly available, UON could not continue to say that the same subject matter was confidential. They therefore sought to strike out substantial parts of the statement of claim as an abuse of process. Jackson J had to decide whether the earlier patent findings really made the confidentiality case untenable, or whether the confidentiality allegations could still stand because they concerned a broader or different body of information and separate contractual obligations.

The central issue was not whether the New System was in fact confidential in every respect, and not whether Mr Hoascar or Taranis had actually misused confidential information. The immediate question was narrower and procedural: after the earlier Allied Pumps decision invalidated the patent for lack of novelty, was it now an abuse of process for UON and LAA to continue pleading that information about the New System was confidential and had been misused?

The respondents relied on the earlier findings that systems supplied to Roy Hill had made the invention publicly available, that Roy Hill personnel were under no obligation of confidence, that the systems could be inspected and reverse engineered, and that prior art documents also anticipated the patent claims. They argued that the New System, the patented invention and the Roy Hill systems were effectively the same thing. If that was right, they said, UON could not keep alleging confidentiality in relation to the same subject matter.

The applicants accepted the general principle that a claim contradicted by earlier findings may be struck out. But they argued there was no necessary inconsistency. On the available reasons, the court treated several distinctions as important.

First, patent novelty and confidentiality are not the same legal inquiry. Patent law asks whether an invention was made publicly available in a way that destroys novelty. Confidentiality law asks different questions, including what information was disclosed, whether it had the necessary quality of confidence, to whom it was disclosed, under what obligations, and whether it was misused.

Second, the pleaded confidential information may not be identical to the invention itself. The judgment notes a lack of identity between the invention and the specified confidential information about the invention. That distinction matters commercially. A product or system may be visible in the market, or capable of inspection, while related know-how, testing records, development history, internal documents, spreadsheets, communications or implementation details may still be alleged to be confidential.

Third, the pleaded existence of express contractual confidentiality obligations mattered. The court referred to the relevance of those obligations in the employment contract and confidentiality agreement. Even where some aspects of a system have become publicly available, a business may still rely on contractual promises about use and disclosure of information provided in the employment relationship.

Jackson J dismissed the respondents' amended interlocutory application filed on 3 February 2025. The orders required the respondents to pay the applicants' costs of and incidental to that interlocutory application in any event. On the available reasons and catchwords, the court rejected the argument that the confidentiality claims were necessarily untenable because of the earlier patent invalidity findings.

The catchwords identify the key propositions supporting that result. They state that making an invention publicly available, leading to lack of novelty for patent law purposes, does not necessarily destroy confidentiality. They also refer to the relevance of express contractual confidentiality obligations and to a lack of identity between the invention and the specified confidential information about the invention. Those points explain why the strike-out application failed.

The judgment also dealt with what should happen to the cross-claim seeking a declaration that the patent was invalid. The court ordered that the cross-claimant file a notice of discontinuance of the cross-claim by 24 December 2025. The catchwords indicate that an objection to discontinuance, based on the possibility the claim could later be revived, was rejected because that possibility was entirely theoretical after the findings in the related proceeding had revoked the patent.

There were also significant costs orders. The applicants had to pay the second respondent's costs of and incidental to the former patent infringement claim on a party-party basis until 11.00 am AWST on 17 March 2023 and thereafter on an indemnity basis. The cross-respondent also had to pay the cross-claimant's costs of and incidental to the cross-claim on the same basis. The court ordered those costs to be assessed by a Registrar on a lump sum basis. In addition, the applicants and cross-respondent were ordered to pay the second respondent and cross-claimant's costs of and incidental to matters determined at paragraphs [95] to [129] of the reasons, discounted by 25%.

So the result was mixed in a commercial sense. UON and LAA successfully resisted the attempt to hollow out the confidentiality case at an early stage, but they still faced adverse costs consequences on the discontinued patent aspects of the proceeding. That is a common litigation reality for businesses running overlapping patent, confidentiality and employee conduct claims.

This decision is most useful as a guide to how courts separate different forms of protection around the same commercial technology. Many businesses assume that if a patent fails, all related confidentiality claims must fail too. Others assume the opposite and treat every aspect of a product as permanently secret. This case suggests neither shortcut is safe.

If your business develops products, software, systems, manufacturing methods or industrial processes, you should distinguish between the invention itself and the broader body of information around it. The invention may be embodied in a product supplied to customers. But your business may also hold internal design records, testing data, spreadsheets, calibration settings, implementation methods, development notes, communications and other know-how. Whether those items remain confidential depends on the facts, the disclosures made, and the obligations that applied.

The case is especially relevant where employees move to competitors. A former employee can usually use general skill and experience, but that does not mean they can take or use specific confidential material obtained under contractual or equitable obligations. The judgment shows the value of having written employment contracts and stand-alone confidentiality agreements that clearly regulate use and disclosure of information. It also shows the importance of being able to identify what information was actually shared with the employee and for what purpose.

At the same time, businesses should be realistic. If a product has been openly supplied, trialled, inspected or reverse engineered without confidentiality restrictions, some arguments about secrecy may become difficult. The stronger position is usually to identify specific categories of confidential information and specific disclosure events, rather than making broad claims that everything connected with a product was secret.

There is also a litigation management lesson. This was an interlocutory fight about whether claims should survive to later stages. Even though the strike-out application failed, the costs orders show that businesses can still suffer serious financial consequences on other parts of the case, especially after rejecting a compromise offer unreasonably. If a related judgment changes the strength of your patent, confidentiality or employee claims, reassess your position quickly.

For businesses hiring from competitors, the message is equally practical. Do not assume that because a competitor's patent has failed, your new hire is free to use all related materials or know-how. Put clear onboarding instructions in place, prohibit use of competitor documents and files, and investigate any sign that confidential material has been brought across.

The available reasons show the kinds of documents and conduct that can become central in a dispute of this kind. UON relied on a written contract of employment and a confidentiality agreement. The pleaded definitions of confidential information were broad and covered information in oral, written, printed, electronic or other tangible form. The case also involved allegations about disclosure of information for the purpose of documenting, developing, testing and recording the New System, and allegations that material was sent to personal email addresses and used outside proper employment purposes.

For a business owner, that means confidentiality protection is rarely just about one invention or one technical drawing. It often depends on a chain of documents and conduct: contracts, access permissions, testing records, spreadsheets, emails, product development notes, customer supply arrangements, training activities and what happened when an employee left.

The judgment was delivered by Jackson J on 17 December 2025 in the Federal Court of Australia, General Division, Western Australia Registry. The hearing date recorded in the extract is 31 January 2025. The orders show that the amended interlocutory application filed on 3 February 2025 was dismissed and that the cross-claimant was required to file a notice of discontinuance of the cross-claim by 4.00 pm AWST on Wednesday 24 December 2025.

This page should be read as an explainer of an interlocutory ruling. It does not record a final trial outcome on the underlying confidentiality, fiduciary duty or related claims. The available text also shows that the reasons extended to at least paragraph [129], but not all of that reasoning is visible in the available extract.