One of the areas in which the IP profession maybe sorta kinda lets itself down sometimes is the tendency to think that infringement threats are just a normal part of life. If it’s arguable, chuck it in a letter and make that your enemy’s problem.

Yesterday, the Full Court of the Federal Court of Australia (that is, three judges hearing an appeal) poured some cold water on that.

What happened?

You can read our blog post about the primary judgment here.

This was a dispute over (among plenty of other things) registered designs for ball valves used in water meter assemblies. Here’s one:

The creation of that design had been a collaborative effort between Mr Comino, an Australian distributor, and an Italian manufacturer Cimberio. Cimberio’s designer, Mr Riva, spent over 120 hours producing a design drawing. But Mr Comino used an edited drawing to register two Australian designs in his own name – all without Cimberio’s knowledge.

The primary judge imposed a constructive trust over Mr Comino’s interests in the designs, effectively granting full beneficial ownership to Cimberio.

The Full Court adjusted that in this appeal. It held that Mr Comino was an “entitled person” and co-designer. The designs should have been registered jointly or not at all. Stripping Mr Comino of all rights with a constructive trust in favour of Cimberio was disproportionate. An undertaking by Mr Comino not to impede Cimberio licensing the designs adequately addressed any “forced marriage” concern.

Unjustified threats

But here’s the main point of interest. Comino had sent a letter of demand to Cimberio alleging that it infringed what was then a registered design in his sole name. That became problematic because of the ownership adjustments mentioned above, even after Mr Comino had recovered some ground.

The Full Court held that the correct construction of sections 77 and 78 of the Designs Act 2003 (Cth) is that a threat of design infringement proceedings is unjustifiable if the allegation is not established.

The starting position is that the threat begins its life as unjustified and remains that way unless it is successfully established.

The threat-maker can only avoid liability for making an unjustified threat by satisfying the court that the acts complained about do infringe, or would infringe, the registered design.

The Court drew support for its position on this from the Explanatory Memorandum to the Designs Bill 2002, which states that section 78 “is intended to discourage any person making threats unless successful infringement proceedings could be brought against those acts”.

Another key point is that there is no broader evaluative exercise asking whether the threat was “reasonable” at the time it was made. Any residual discretion for the court only relates to the grant of relief (like questioning the utility of an injunction), not to a merits‑style review of reasonableness.

The remaining grounds, including challenges to the findings on breach of confidence, copyright infringement, additional damages and ACL contraventions were largely dismissed. If you look back at our previous post for the list of things that went wrong for Mr Comino, that still leaves him in a deep hole.

What’s the significance for IP practitioners?

If any letter of demand alleging design infringement is unjustified until established, then it’s pretty tough on design owners who want to make allegations of infringement in marginal cases of substantial similarity in overall impression. That is always going to be a debatable assessment. Does this judgment cripple the capacity to have that debate, or does it simply acknowledge the usual risks and the normal consequences of failure?

Unjustified threats might not be handled the same way for all of the other IP rights. It’s important to remember that this judgment is about designs and the Court’s reference to the Explanatory Memorandum lends itself to the idea that it’s specifically about designs. There’s also a single-judge patent authority called Damorgold Pty Ltd v Blindware Pty Ltd [2017] FCA 1552 that is more accommodating of a patent owner having a crack.

But the position is now clear for designs and the reasoning of the higher-ranked Full Court in this case could take root elsewhere.

Do you and your client need to think twice about sending that letter?

For those interested, the case citation is  Comino v Watson Webb [2026] FCAFC 66 (21 May 2026)