Commercial collaboration can create unbeatable opportunities for innovation and securing return on investment. However, the Federal Court’s recent decision in Watson Webb Pty Ltd v Comino [2025] FCA 871 offers an exploration of the significant IP issues that can arise in the absence of a strong contractual framework.
The proceeding, which related to IP in plumbing valves and underlying technical drawings, provides valuable guidance on a number of areas of law — copyright, registered designs, equity, contracts, consumer law and patents. The key takeaway for businesses is the importance of clear contractual arrangements governing the ownership, registration, use, and enforcement of IP rights. Where that is lacking, a party might wind up wading through the web of issues that arose in Watson Webb v Comino.
Entitlement and ownership of registered designs
The commercial relationship between the parties was a classic example of commercial collaboration: Cimberio, an Italian manufacturer and designer of valves, worked closely with Mr Comino and his Australian company, Strongcast, to develop new plumbing products for the Australian market. Over several years, the parties exchanged ideas, technical drawings, and prototypes, with Cimberio responsible for the design and engineering work, and Mr Comino providing input on features required for the Australian market. Then, the relationship soured.
One of the central issues was the question of entitlement to registered designs that resulted from this collaborative development process. Mr Comino and Strongcast argued that Mr Comino was the sole designer. Cimberio argued that it was (at least) a co-designer and therefore a co-owner of the designs.
To determine this question, the Court considered who conceived the relevant shape, configuration, pattern, or ornamentation of the valve’s key visual feature — an integrated lockable handle — and who reduced it to visible form. The Court found that this visual feature was conceived and reduced to visible form by Cimberio’s employee, Mr Riva. The Court considered that another visual feature proposed by Mr Comino — an internal thread — was comparatively less significant because it was less noticeable and visible, and its appearance was constrained by its function.
Cimberio was at least a co-designer, and therefore entitled to be registered as a co-owner of the registered designs.
Use of copyright works
Cimberio also successfully asserted copyright in a technical drawing of a valve with a lockable handle and an internal thread.
It was common ground that the technical drawing was an artistic work in which copyright owned by Cimberio subsisted. By providing reproductions of this drawing to a patent attorney for the purpose of registering the design in Mr Comino’s name, and by authorising the patent attorney to provide that drawing to the Designs Office, Mr Comino and Strongcast infringed that copyright. The Court held that Cimberio was entitled to an account of profits (or alternatively damages) plus additional damages for the flagrancy of the infringement.
In reaching this finding, the Court scrutinised the parties’ prior agreements and communications, finding that earlier distribution agreements did not extend to the new designs the subject of the dispute. This left the parties to argue over implied rights and intentions, including whether Strongcast had an implied licence to use the drawing, which the Court ultimately rejected.
The Court also referred to the ‘copyright/design overlap’ provisions in the Copyright Act 1968 (Cth), including s 75 which removes copyright protection for an artistic work where a corresponding three-dimensional design has been registered. One of the reasons that provision could not be engaged was because it is primarily concerned with the ‘embodying’ of two-dimensional works in three-dimensional products. In this case, the infringement involved two-dimensional copying (the unauthorised use of the drawing itself), which fell outside the overlap defences and left Mr Comino and Strongcast liable for infringement.
Relatedly, the Court found that Mr Comino and Strongcast:
- breached obligations of confidence by disclosing the drawing to their patent attorneys and
- contravened the Australian Consumer Law by misrepresenting that they would not use the drawing to apply for a design registration.
Key takeaways
Watson Webb v Comino is a compelling reminder that clear contracts addressing ownership, registration, use, and enforcement of IP resulting from collaborative projects are essential to avoid costly and disruptive disputes. Relying on informal understandings or implied terms exposes parties to significant uncertainty and risk, particularly where valuable IP is at stake.
