[The IPKat] Australian court orders withdrawal of patent applications prior to publication

[Claire Gregg]

Australian court orders withdrawal of patent applications prior to publication

 Dr Claire Gregg Wednesday, August 19, 2026 - #patents, Australia, Claire Gregg, confidential information, OzKat, preliminary injunction

In a recent interlocutory decision in EOS Defence Systems Pty Limited v Pahlavani [2026] FCA 688, the Federal Court of Australia ordered the withdrawal of a PCT application and associated provisional application before publication. This unusual decision highlights the importance of confidentiality and IP obligations in employment contracts as a means of preventing employees from publishing commercially sensitive information.

Background

EOS Defence Systems Pty Limited develops advanced electro-optic technologies for the space and defence sectors, including high-energy laser weapons, anti-drone systems and related military technologies. The first respondent, Mr Pahlavani, was formerly employed by EOS as a laser engineer, including on a project relating to an anti-drone system, and his employment was subject to strict confidentiality and IP obligations. During his employment, Mr Pahlavani provided EOS with a “Pre-Employment Intellectual Property Disclosure”, which indicated potential overlap between his previous ideas and the project.

After resigning from EOS, Mr Pahlavani incorporated the second Respondent, RedTail Technology Pty Ltd, and filed a provisional application on 13 December 2024 for a "Laser Director, an Electromagnetic Spectrum Denial Device, a Pointing System and a Weapon System", followed by a PCT application claiming priority from the provisional application.

These applications came to light when EOS's solicitors identified the provisional application in a search of the Australian Patent Office database and wrote to the Respondent on 31 March 2026 requesting a copy of the provisional application and any associated applications. The Respondent provided a copy of the provisional application, but did not provide the PCT application, which was due to be published on or about 18 June 2026, until 13 May 2026. Shortly after receiving the PCT application, EOS sought a mandatory interlocutory injunction on various grounds, asserting that Mr Pahlavani had used confidential information obtained during his employment with EOS, without permission, in preparing the patent applications.

Defence Kat

Serious question to be tried

In considering whether there was a serious question to be tried, the Court focused on whether Mr Pahlavani had contravened s 183(1) of the Corporations Act 2001 (Cth), which prohibits an employee of a corporation from improperly using information gained during their employment for their own advantage (or the advantage of another), or to the detriment of the corporation. In this regard, the evidence established a substantial alignment between internal reports from EOS and the subject matter of the PCT application.

Much of the Court’s reasoning in relation to the Disclosure is redacted. However, the Court appears to have found that the concept described in the Disclosure did not contain certain relevant core concepts, that the contents of the Disclosure were not the subject of the PCT application, and that Mr Pahlavani’s contractual obligations prohibited him from drawing on EOS's IP in any way.

This evidence was considered sufficient to establish a prima facie case that Mr Pahlavani had used information obtained through his employment to gain an advantage for himself and RedTail. The Court did not accept the Respondent's arguments that EOS had failed to identify the alleged confidential information with sufficient precision, or that indications during International examination of novelty and inventive step issues with several claims were sufficient to defeat EOS’s prima facie case that there was a serious question to be tried.

Balance of convenience

In considering whether the balance of convenience favoured injunctive relief, the Court weighed, among other factors, the fact that publication of the applications would permanently destroy the confidentiality of their contents against the loss of rights to the Respondents, given that it was no longer possible to re-file the application and retain the original priority date. The Court accepted that public disclosure of the patent applications would have adverse financial and reputational consequences for EOS, particularly in its capacity as a defence systems contractor.

The Court also considered that the Respondents' financial means were limited, such that damages would not provide an adequate remedy if the injunction were wrongly refused, but that EOS had sufficient financial means to satisfy its undertaking as to damages if the injunction were wrongly granted. Further, while it was acknowledged that the assessment of damages for lost opportunity by the Respondents would be complicated, this was not sufficient to outweigh the potential harm to EOS.

Finally, the Court noted that, while there was a delay between the filing of the provisional application and EOS bringing its action, the Respondents' delay in providing the PCT application until shortly before the action was brought mitigated this factor.

Final thoughts

This decision provides important lessons for employers and employees alike:

·                     Courts may intervene before a patent application is published where there is credible evidence that confidential information has been misused.

·                     A serious question to be tried can be established by evidence of substantial overlap between an employer's confidential project work and a later patent application.

·                     Questions of patentability are distinct from questions of confidentiality and misuse of information.

·                     Pre-employment disclosures and claimed prior ownership of ideas will not necessarily defeat a claim based on misuse of confidential information obtained during employment.

 

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