The recent decision of the Full Federal Court in Comino v Watson Webb Pty Ltd [2026] FCAFC 66 is a helpful reminder to exercise caution before sending correspondence that might constitute a threat of intellectual property infringement proceedings. The line between merely notifying someone of the existence of your IP rights and making an actionable threat must be drawn with care.
The unjustified threats regime
The Designs Act 2003 (Cth) contains an ‘unjustified threats’ regime.
Section 77 provides that a person who has been unjustly threatened with design infringement proceedings may obtain relief from the court, including an injunction and damages. A threat will not be unjustified if a court is satisfied that the design said to be infringed is registered and has been examined, and the acts complained of infringe, or would infringe, it. Importantly, s 80 clarifies that the mere notification of the existence of a registered design does not amount to a threat of infringement proceedings.
Similar regimes exist under the Patents Act 1990 (Cth), Trade Marks Act 1995 (Cth) and the Copyright Act 1968 (Cth), each providing protection against unjustified threats of infringement proceedings.
Background
As set out in our insight on the first instance decision, this case concerned a dispute between Mr Comino and his company, Strongcast, against All Valve Industries (AVI) and the Italian manufacturer Cimberio, in respect of IP in plumbing valves and underlying technical drawings. The parties collaborated for several years on the development and modification of ball valve designs, until their relationship broke down.
At first instance, Halley J found (among other things) that Mr Comino and Strongcast had engaged in copyright infringement, breached obligations of confidence and contravened s 18 of the Australian Consumer Law. However, his Honour dismissed the unjustified threats claim brought by AVI and Cimberio pursuant to s 77.
That claim arose from a letter sent by Mr Comino’s solicitors, which asserted that AVI’s ball valves appeared to be covered by, and were visually similar to, a registered design that Mr Comino owned. The letter also demanded an undertaking from AVI that it not make or offer to make, import, sell, hire, or otherwise dispose of a ball valve embodying the registered design owned by Mr Comino. Justice Halley held that this letter constituted a threat of infringement proceedings (as opposed to a ‘mere notification of registration’ under s 80) but did not consider it ‘unjustified’. AVI and Cimberio appealed that decision.
Findings
The Full Court unanimously allowed the appeal, finding that the primary judge erred in failing to find that the letter constituted an unjustified threat under s 77.
Mr Comino and Strongcast attempted to argue on appeal that determining whether a threat is ‘unjustified’ requires consideration of all the circumstances, and that a threat-maker does not have to prove infringement to avoid liability. The Full Court disagreed, noting that their argument was not supported by the Designs Act or any direct authority.
The Full Court instead preferred AVI’s and Cimberio’s construction of s 77, which was found to be consistent with the ordinary meaning of the words used in the Designs Act. The Full Court helpfully set out the correct approach to unjustified threats in design cases as follows:
- Once an applicant shows it received a threat of design infringement proceedings, that threat is prima facie.
- The threat-maker can only avoid relief by proving the matters in s 78 – that is, that the design is registered and examined and that the acts complained of infringe, or would infringe, it.
- If the court determines that the matters in s 78 are not met, it retains a discretion whether to grant relief under s 77. For example, the court may refuse to grant an injunction if it lacks utility. However, an exercise of the discretion does not involve a reassessment of whether the threat was ‘unjustified’ by reference to, for example, whether it was objectively arguable when made.
Applying those principles, the threat in Mr Comino’s letter was unjustified as a matter of law. It was already accepted at first instance that the letter constituted a threat of infringement proceedings, and the s 78 defence was unavailable because the infringement claims in respect of the registered design Mr Comino owned had been dismissed by consent.
The Full Court granted the declaratory relief sought by AVI and Cimberio and remitted the issue of damages to the primary judge. We will report on any damages decision.
Implications
This decision underscores the need for considered analysis and advice before threats of IP infringement are made. The party making the threat cannot avoid liability by demonstrating that the threat was objectively arguable or had a proper legal basis at the time it was made. The court retains a discretion, but only in respect of relief.
While the Full Court expressly declined to address the position on unjustified threats under other IP statutes, its reasoning on the text and purpose of the Designs Act provisions may nonetheless inform arguments concerning the equivalent regimes for patents, trade marks and copyright.
