In Comino v Watson Webb Pty Ltd [2026] FCAFC 66, the Full Court of the Federal Court considered a long-running intellectual property dispute arising from the development of plumbing valves. The case involved overlapping claims concerning registered design ownership, copyright infringement, confidential information, misleading or deceptive conduct and unjustified threats of design infringement.
The Full Court upheld the central findings that confidential engineering drawings had been misused and that copyright had been infringed. It also confirmed the potential availability of additional copyright damages. However, it overturned the order requiring one of the designers to transfer his entire interest in the registered designs to the other designer, finding that the constructive trust imposed at first instance went further than was necessary.
The Court also delivered an important clarification of the unjustified threats provisions in the Designs Act 2003 (Cth). A person who threatens design infringement proceedings cannot avoid liability merely by showing that the allegation was reasonably arguable when the threat was made. Once a relevant threat has been established, the person making it must generally be able to prove that the threatened conduct infringes, or would infringe, the registered design.
Background to the dispute
All Valve Industries Pty Ltd, referred to as AVI, imports and distributes valves and other plumbing products in Australia. Cav. Uff. Giacomo Cimberio S.p.A., referred to as Cimberio, is an Italian manufacturer that designs and produces valves for plumbing, heating and water distribution systems.
John Comino is the director and shareholder of Strongcast Pty Ltd. In 2013, Strongcast approached AVI for assistance in manufacturing plumbing components. AVI and Strongcast subsequently entered into a product distribution agreement, and AVI supplied Strongcast with valves manufactured by Cimberio.
Over several years, the parties discussed modifications to an existing Cimberio valve. The proposed changes included a locking wing that would allow the valve to be secured with a padlock and a dual-thread feature that would permit different connection arrangements.
Mr Comino contributed ideas and commercial requirements to the development process. These included requests for a valve with a lockable body and internal and external threading. Cimberio’s designer, Mr Augusto Riva, then undertook the detailed design and engineering work necessary to produce a commercially workable valve.
The resulting technical document was known as the C9746 Design Drawing. The drawing showed six views of the valve and contained the measurements and manufacturing information required to make it. The design process involved more than 120 hours of work and required consideration of the shape, dimensions, materials, machining requirements, production costs and technical feasibility of the valve.
The drawing identified Cimberio as the copyright owner and included a confidentiality notice.
Registration of the designs
Cimberio’s drawing was provided to Mr Comino in January 2018. The evidence accepted at trial was that it was supplied as part of the parties’ established process for reviewing and approving drawings before manufacture.
Shortly afterwards, Mr Comino sent the drawing to Infinity Design Pty Ltd. Infinity Design was asked to remove Cimberio’s trademarks, copyright information, measurements and other details. It then produced edited versions of the drawing, including a version containing an additional internal thread.
The edited drawings were provided to Mr Comino’s patent attorney and used to apply for two Australian registered designs. These became Australian Design Nos. 201811005 and 201811810. Both applications were filed in Mr Comino’s name alone.
The primary judge found that Cimberio, through the work of Mr Riva, was at least a co-designer. Mr Comino was therefore not the only person entitled to be registered as the owner of the designs.
The primary judge also found that reproducing and modifying the C9746 Design Drawing, and using it to obtain the design registrations, infringed Cimberio’s copyright and breached obligations of confidence.
The findings at first instance
At first instance, the Court found that Mr Comino and Strongcast had directly infringed copyright in the C9746 Design Drawing; authorized Infinity Design’s infringement of that copyright; breached their obligations of confidence by disclosing and using the drawing for an unauthorized purpose; contravened section 18 of the Australian Consumer Law through representations conveyed by their silence; and engaged in conduct that justified an award of additional copyright damages.
The two registered designs were ordered to be revoked because they had been registered in the name of Mr Comino alone when both Mr Comino and Cimberio were entitled persons.
The primary judge went further and declared that Mr Comino held his entire interest in the designs on constructive trust for Cimberio. Mr Comino was ordered to assign all his rights in the designs to Cimberio. The practical effect was that Cimberio alone would be entitled to apply to re-register the designs with their original priority dates.
The primary judge dismissed AVI and Cimberio’s separate claim that a letter threatening design infringement proceedings amounted to an unjustified threat.
Both sides appealed aspects of the decision.
Was the entire engineering drawing confidential?
Mr Comino and Strongcast challenged the finding that the C9746 Design Drawing, considered as a whole, was Cimberio’s confidential information.
They argued that Mr Comino had contributed important elements of the valve, including the locking concept and dual-thread feature. On that basis, they submitted that the drawing could not properly be regarded as confidential information belonging only to Cimberio.
The Full Court rejected this argument.
It accepted that confidential information may reside in a document as a whole, even where individual elements of the information are already known or have been supplied by another person. A detailed plan, formula or engineering drawing may have the necessary quality of confidence because of the work, skill and judgment involved in combining the information into a useful result.
The Court drew an important distinction between contributing to the design of a product and producing the confidential technical document that records and develops that design.
Mr Comino had contributed ideas and requirements to the product development process. However, the unchallenged findings showed that Mr Riva had undertaken the detailed engineering work and was the first person to reduce the complete valve design to visible form. The work could not be characterised as simply drawing what Mr Comino had already designed.
The drawing therefore remained Cimberio’s confidential information, despite Mr Comino’s contribution to the underlying product.
The obligation of confidence
Mr Comino and Strongcast also argued that there was insufficient evidence to establish an obligation of confidence because AVI and Cimberio had not called two individuals who had participated in the relevant communications.
The Full Court was not persuaded.
The drawing contained express copyright and confidentiality notices. It had been disclosed only to a limited group, had significant commercial value and could not readily be reproduced without substantial engineering work.
The established course of dealing between the parties also supported the finding that drawings were provided for review and approval before manufacture. The trial evidence concerning that practice had been accepted and was not successfully challenged on appeal.
The Full Court also rejected the suggestion that an adverse inference should have been drawn from the failure to call the additional witnesses. Most of the relevant communications had occurred by email, and Mr Comino had not given evidence of particular conversations that the absent witnesses needed to explain or contradict.
The findings of breach of confidence were therefore upheld.
Constructive trust
The most significant success for Mr Comino and Strongcast concerned the remedy imposed for the breach of confidence.
The primary judge had placed Mr Comino’s entire interest in the designs on constructive trust for Cimberio. This meant that Cimberio would receive the full benefit of the design rights, while Mr Comino would lose any entitlement arising from his own contribution to the designs.
The Full Court accepted that Mr Comino’s conduct involved serious wrongdoing. The findings of copyright infringement and breach of confidence remained in place. However, the purpose of a constructive trust is not to punish a wrongdoer. It is an equitable remedy that should be imposed only where other forms of relief cannot do full justice.
A critical feature of the case was that Mr Comino was himself an entitled person under the Designs Act. His entitlement arose from his contribution to the designs and existed independently of his later misuse of Cimberio’s drawing.
Without the constructive trust, the designs could potentially be re-registered in the names of both Mr Comino and Cimberio. Cimberio remained entitled to an account of profits for breach of confidence and could pursue damages or an account of profits for copyright infringement.
Mr Comino also offered an undertaking that he would consent to any request by Cimberio to license the jointly owned designs to third parties. This addressed Cimberio’s concern that joint ownership could prevent it from granting licences without his approval.
In those circumstances, stripping Mr Comino of his entire interest was not necessary to remedy the wrongdoing. It would give Cimberio all future profits arising from designs to which Mr Comino had made a legally recognised contribution.
The Full Court therefore set aside the constructive trust and the associated assignment orders. It indicated that both Mr Comino and Cimberio should be entitled to apply for re-registration, subject to the final form of the Court’s orders.
Copyright infringement and additional damages
The Full Court upheld the finding that Cimberio was entitled to additional damages for copyright infringement.
Mr Comino argued that he honestly believed he was the sole owner of the designs. However, the primary judge had made adverse findings concerning his evidence and state of mind. Those credit findings were not challenged on appeal.
The evidence included the copyright notice on the C9746 Design Drawing, Mr Comino’s existing understanding of copyright in technical drawings and his instructions to remove Cimberio’s identifying information from the document.
The primary judge had found that Mr Comino was aware of, or at least recklessly indifferent to, Cimberio’s copyright. His actions formed part of a deliberate plan to use the drawing to secure statutory design rights and facilitate production through an alternative manufacturer.
The Full Court found no error in taking into account the deliberate character of the conduct, the benefit obtained through registration and the need to deter others from using one person’s intellectual property to obtain separate intellectual property rights for themselves.
The amount of additional damages remained to be determined at a later hearing.
Representations by silence under the Australian Consumer Law
AVI’s Australian Consumer Law claim concerned three representations allegedly conveyed by Mr Comino and Strongcast through their silence.
The alleged representations were that they:
- would use the C9746 Design Drawing only to approve it before manufacture by Cimberio;
- did not intend or consider applying to register a design for the valve; and
- did not intend or consider using the drawing in a design application.
The Full Court found that the first representation had not been established.
Before the design applications were filed, AVI and Mr Comino had already discussed approaching another manufacturer about producing the valve. The drawing had also been circulated in connection with those discussions. In that context, AVI could not reasonably have expected that the drawing would be used only for approval before manufacture by Cimberio.
The second and third representations remained established. The Court accepted that AVI could reasonably expect to be informed if Mr Comino intended to use the drawing to obtain a statutory monopoly that could expose AVI to infringement proceedings or restrict its ability to distribute competing valves.
The partial success on the first representation did not alter the practical outcome of the appeal.
The Full Court also confirmed that the question of whether AVI had suffered loss could be dealt with at the later hearing concerning financial relief. It was not necessary for the primary judge to determine the existence and amount of loss separately at the liability stage.
The infringement letter
A separate issue concerned a letter sent on behalf of Mr Comino in February 2020.
The letter alleged that valves supplied by AVI were covered by, or visually similar to, the 005 Design. It demanded undertakings that AVI cease relevant conduct and destroy unsold valves. It also expressly reserved the right to commence infringement proceedings and referred to remedies that could be obtained from the Court.
The primary judge found that the letter was a threat of infringement proceedings, rather than a mere notification that a registered design existed. However, the primary judge concluded that the threat was not unjustified because it was not necessarily unreasonable when made.
The Full Court found that this applied the wrong test.
When is a design infringement threat unjustified?
Sections 77 and 78 of the Designs Act establish a specific statutory framework.
Where a person establishes that they have been threatened with infringement proceedings in respect of a design, the threat is prima facie unjustified. The person making the threat may avoid relief by establishing the matters in section 78. In particular, they must show that the acts identified in the threat infringe, or would infringe, the registered design.
The Court rejected the argument that it should conduct a broader evaluation of whether the allegation was objectively reasonable or arguable when the letter was sent.
The statutory question is not whether the sender had a genuine belief, received legal advice or had a reasonably strong infringement case. The question is whether the infringement allegation can ultimately be established.
In this case, the infringement claims concerning the 005 Design had been dismissed by consent. Mr Comino and Strongcast could therefore not establish the statutory defence.
The Full Court declared that the Foundry IP letter constituted an unjustified threat. It remitted the question of damages and additional damages to the primary judge.
The Court observed that nominal damages could potentially be awarded even if AVI and Cimberio could not prove substantial financial loss. An award of additional damages could then also be considered if justified by the circumstances.
Commercial significance
The decision provides several important lessons for designers, manufacturers, distributors and businesses involved in collaborative product development.
Firstly, contributing an idea to a product does not necessarily give a person ownership of every intellectual property right connected with that product. Design entitlement, copyright in technical drawings and ownership of confidential information involve separate legal questions. A person may be a co-designer of a product while still infringing copyright or misusing confidential information contained in another party’s drawing.
Secondly, technical drawings can be protected as confidential information in their entirety. It may not be necessary to isolate each confidential dimension, measurement or feature where the commercial value lies in the complete engineering plan.
Thirdly, intellectual property ownership should be addressed before development work begins. Agreements should identify who owns the original product, improvements, technical drawings, tooling and registered rights. They should also state who may file applications, appoint alternative manufacturers and disclose drawings to third parties.
Fourthly, equitable remedies must remain proportionate. Even deliberate and commercially serious wrongdoing does not automatically justify transferring all ownership to the innocent party. A constructive trust should not be imposed where damages, an account of profits, revocation, undertakings or other orders can adequately address the conduct.
Finally, the decision highlights the risk involved in sending design infringement demands. A carefully worded letter may notify a competitor that a registered design exists. Once the communication demands undertakings, destruction of stock or cessation of trade and threatens proceedings, it may engage section 77.
A genuine belief that infringement has occurred will not necessarily protect the sender. Before making a threat, a registered owner should be prepared to prove that the conduct identified in the letter actually infringes the design.
The decision preserves the findings of serious misuse of Cimberio’s drawing while correcting a remedy that would have removed Mr Comino’s independently acquired rights as a co-designer. At the same time, it gives the unjustified threats provisions a strict operation that requires design owners to exercise considerable care before threatening litigation.
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