The suit is one of many J&J has faced in the United States, Canada and Europe over the implants, used to treat urinary incontinence and pelvic organ prolapse, in which organs shift from normal positions. J&J in October agreed to pay nearly $117 million to resolve claims in 41 U.S. states and the District of Columbia.
Australia's Federal Court found that J&J subsidiary Ethicon had sold the devices without warning women about the "gravity of the risks", and was negligent in rushing the products to market before proper testing. The judge in the case, Anna Katzmann, has set February for the next hearing in the case, where damages will be discussed.
Ethicon said it was reviewing the court's decision and would consider its options to appeal.
"Ethicon believes that the company acted ethically and responsibly in the research, development and supply of these products," the company said in a statement.
Judge Katzmann ruled that much of the information the company provided about the devices was "inaccurate" and at times made "false representations".
"The question is whether this conduct considered as a whole was misleading or likely to mislead. I believe it was," Katzmann said in her judgment.
"The post-market evaluation of all the Ethicon devices was deficient," she said. "It fell well below the level of care required of a reasonably prudent manufacturer."
"The risks were known, not insignificant and on Ethicon's own admission, serious harm could ensue if they eventuated," the judge said in her ruling.
Patients said they had suffered chronic pain, bleeding and severe discomfort during sexual intercourse after having the mesh surgically implanted.
Dozens of women involved in the class action welcomed the court's decision.
Julie Davis, the original claimant in the case, said she was "incredibly pleased" with the judgment but said it would not take away the pain and damage done to women.
"They have treated women essentially like guinea pigs, lied about it and done nothing to help," she told reporters at a televised media conference outside the court in Sydney.