A confidential drawing sent to you for a single, narrow purpose does not become yours to repurpose — and treating it as though it does can unravel an entire IP position. That is the strategic core of the Full Federal Court’s decision in Comino v Watson Webb Pty Ltd [2026] FCAFC 66. A distributor received a manufacturer’s confidential engineering drawing to “sign off” before production, stripped the markings, and registered the design in his own name. The Court confirmed that the obligation of confidence bound him regardless of his own contribution to the design, and even though key witnesses were never called.

For IP-intensive businesses the lesson is uncomfortable but clear: inbound IP is a constraint, not a windfall. Every drawing, sample and spec that arrives under an obligation of confidence narrows what you can later claim as your own — and disregard of that line is what invited additional damages here.

The appeal is just as instructive for what it corrected. The Court set aside a constructive trust that had handed the manufacturer the entire design, because the distributor was a genuine co-designer — remedies track contribution, not punishment. More striking is the threats ruling: a letter demanding undertakings and reserving the right to sue is prima facie an unjustified threat unless you can prove infringement, and quietly dropping the claim later will not save you.

Three takeaways for leaders and in-house counsel:

1. fix ownership in writing before development starts;
2. treat others’ confidential material as off-limits, not raw material; and
3. never send an enforcement letter you are not prepared to back in court.

Disciplined IP strategy is less about owning the most rights than knowing precisely how to use them.