Australia: Unjustified threats of patent infringement weakened by courts

Managing IP is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Australia: Unjustified threats of patent infringement weakened by courts

Australian courts have recently taken a dim view of competitors claiming that the patentee has made unjustified threats of patent infringement. It is now clear that, in relation to the assessment of damages, it is necessary for the defendant to show any threats made by the patentee were directly the cause of loss or damage to the defendant.

In Mizzi Family Holdings Pty Ltd v Morellini (No 3) [2017] FCA 870, damages relating to the unjustified threats were at issue. Mizzi held a patent for a sugar cane planting machine and sued Morellini for infringement. At first instance, it was found that Morellini's machine did not infringe the patent and that Mizzi had made unjustified threats of patent infringement. (It was later found on appeal that Mizzi's patent was invalid for false suggestion.) Mizzi had caused advertisements to be placed in trade journals, warning off potential customers of being in patent "infringement danger" if they were to buy competitive machinery to that disclosed in Mizzi's patent application.

In light of a recent precedent, Morellini needed to establish causation between the threats and the damages claimed. The judge refused to find any liability even though customers did not want to take up the defendant's machine, and "they were a bit cautious because they were waiting for all this to be over". Although the judge accepted a general reluctance to deal with the invention, there was no finding that the reluctance was attributable to any threats.

The net effect of this decision is that it establishes the need for evidence of actual causation between the threat of patent infringement and the resulting loss by the potential competitor. This is good news for patent holders but sets a high threshold for those wishing to invoke the unjustified threat ground in dealings with a patentee.

Peter Treloar

Shelston IP

Level 21, 60 Margaret Street

Sydney NSW 2000, Australia

Tel: +61 2 9777 1111

Fax: +61 2 9241 4666

email@shelstonip.com

www.shelstonip.com

more from across site and SHARED ros bottom lb

More from across our site

Siegmund Gutman, who joined Mintz one year ago, explains the firm’s approach to life sciences litigation and what it means for hiring plans
The merger of two IP boutiques could prompt others to follow suit and challenge Australia’s externally funded firms
Law firm leaders say they are eager to make the most out of the market following a 'surprising' survey on in-house interest in IP monetisation
A defeat for AstraZeneca and Open Innovation Network's 20th anniversary were also among the top talking points this week
Nigel Stoate, head of Taylor Wessing's award-winning UK patents team, tells us about his team’s UPC successes and why collaboration is king
Camilla Balleny, who spent a decade at Carpmaels & Ransford, will become the firm’s first head of patent litigation, Managing IP can reveal
Leaders at the newly merged firm Jones Maxwell Smith & Davis reveal their plan to take on bigger firms while attracting more clients and talent
Charles Achkar, who will bring a team of two with him, said he was excited about joining ‘one of the few strong IP boutiques’
Andy Lee, head of IP at Brandsmiths and winner of the Soft IP Practitioner of the Year award, tells us why 2024 was a seminal year and why clients value brave advice
The deal to acquire MIP's parent company is expected to complete by the end of May 2025
Gift this article