Malaga company Taranis Power has scored a win over its larger rival UON as the two mining services companies continue a long and expensive legal battle.
Malaga company Taranis Power has scored a win over its larger rival UON as the two mining services companies continue a long and expensive legal battle.
The dispute dates back more than four years and involves allegations of misuse of intellectual property.
As well as a Supreme Court fight, the companies are caught up in two long-running battles over the registration of patents for their competing products.
The dispute is akin to a David and Goliath battle – UON counts Macquarie Bank as a shareholder and has more than 270 staff while Taranis has just 15 permanent staff.
Taranis managing director Joe Vetrone said his aim was to list the company on the ASX in two years but in the meantime his company was being squeezed by an expensive legal battle.
The dispute revolves around the variable-speed generators developed by the two companies.
The key attribute of Taranis Power’s VarioGen product and UON’s GMC Generator is they require less power to get started.
This delivers savings to their clients, mostly mining companies that use the generators to drive dewatering pumps.
Taranis, which is represented by law firm Williams & Hughes, received a big boost last month when federal government agency IP Australia ruled in favour of its patent application for the electrical system that drives the VarioGen.
UON, which is represented by law firm Bennett & Co, had opposed the granting of a patent. In the meantime, UON is pursuing a patent application for its GMC Generator, which it said would revolutionise in-pit dewatering when it was launched in 2016.
That application has been opposed by Taranis, Canning Vale firm Allied Pumps and Melbourne law firm Anderson IP.
The dispute centres around Gabriel Hoascar, who moved from UON to Taranis in March 2016.
Within four months of his move, Taranis registered the business name VarioGen and about one year later applied for its patent.
UON told IP Australia the similarity between the two products “affords no other reasonable explanation than that Mr Hoascar and Mr Vetrone used UON’s confidential information to develop their invention”.
IP Australia’s William Guinea, who presided over Taranis’ patent application, described the case as a “mercurial morass”.
He said there were “a number of curiosities in Mr Hoascar’s and Mr Vetrone’s evidence”.
Dr Guinea also noted there was a period when Mr Hoascar worked for both UON and Taranis, saying this could be seen as a conflict of interest. But he rejected UON’s claims.
“There is no evidence that Mr Hoascar ever provided any of (UON’s) information of any kind to Mr Vetrone,” his ruling stated.
Dr Guinea found that Mr Vetrone started developing his concept as early as 2015, before Mr Hoascar joined Taranis.
A key factor in UON’s case was that Mr Hoascar emailed information to his personal address just before leaving UON.
Dr Guinea concluded that “most of this (information) is quite clearly irrelevant to the invention”.
UON chair Mark Keogh said he would appeal the IP Australia ruling to the Federal Court.
UON is also proceeding with its Supreme Court action against Mr Hoascar, alleging he misused its confidential information and solicited its clients, including BHP, Rio Tinto and Mineral Resources.
In a Supreme Court hearing in June, Justice Gail Archer heard similar evidence to that presented to IP Australia.
She observed there was some force in UON’s submissions.
“The undisputed facts do call for an explanation,” Justice Archer said in a ruling handed down last month.
“However, experience has shown that what appears to be suspicious may have an innocent explanation.”
Justice Archer said it was too early to make a meaningful assessment of the substantive issues but she did hand UON a tactical win.
She ruled that UON could inspect various documents, including documents relating to the research and development of VarioGen.
UON will also be able to inspect quotes, purchase orders and invoices for the sale of VarioGen, including the details of customers.
One set of documents UON was not given permission to inspect was Taranis’ financial records, with Justice Archer ruling a summary spreadsheet was sufficient.
Mr Keogh told Business News the court ruling gave it access to documents that could not be put before IP Australia.
Another notable difference to the IP Australia hearing was that UON will be able to cross examine witnesses in the Supreme Court and subpoena evidence from Taranis’ customers.
UON will argue before the court that its confidential information was used as a ‘springboard’ for developing the VarioGen, Mr Keogh added.
