Australia: Unjustified threats of patent infringement weakened by courts

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

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

The tie-up could result in the firm’s German and France-based teams, which both have strong UPC expertise, becoming independent
News of a slowdown in the UK’s clean energy IP landscape and an EPO report on unitary patent uptake were also among the top talking points
Price hikes at ‘big law’ firms are pushing some clients toward boutiques that offer predictable fees, specialised expertise, and a model built around prioritising IP
The Australian side, in particular, can benefit by capitalising on its independent status to bring in more work from Western countries while still working with its former Chinese partner
Koen Bijvank of Brinkhof and Johannes Heselberger of Bardehle Pagenberg discuss the Amgen v Sanofi case and why it will be cited frequently
View the official winners of the 2025 Social Impact EMEA Awards
King & Wood Mallesons will break into two entities, 14 years after a merger between a Chinese and an Australian firm created the combined outfit
Teams from Shakespeare Martineau and DWF will take centre stage in a dispute concerning the registrability of dairy terminology in plant-based products
Senem Kayahan, attorney and founder at PatentSe, discusses how she divides prosecution tasks, and reveals the importance of empathetic client advice
The association’s Australian group has filed a formal complaint against the choice of venue, citing Dubai as an unsafe environment for the LGBTQIA+ community
Gift this article