India: Suits pertaining to a registered design also constituting a trade mark not maintainable for p

The Delhi High Court on February 18, 2019 pronounced a judgment in a batch of suits involving various footwear manufacturers, titled Crocs Inc. USA v/s. Aqualite India Limited[1] and ors. and held that a suit for action in passing off, that is solely based upon the shape of a footwear, already registered as a design under the Designs Act, 2000 (or the Designs Act) by Crocs was not maintainable. The Hon’ble Court thoroughly examined the statutory provisions of Designs Act, 2000 and Trade Marks Act, 1999, the common law principles of passing-off, as well as precedents on the issue, especially in light of the landmark judgment Carlsberg Breweries a/s v Som Distilliers[2] (hereinafter referred to as “the Carlsberg Breweries case”) which overruled the earlier judgment on the issue of composite suits, Mohan Lal v. Sona Paint and Hardwares[3] (hereinafter referred to as “the Mohanlal case”) and had held that a composite suit for design infringement and passing off is maintainable on account of common questions of law and facts between the two causes of action, to avoid multiplicity of proceedings.

BACKGROUND

The Plaintiff had filed separate commercial suits against several footwear manufacturers for allegedly copying and adopting the design of “Crocs.” The Plaintiff had also filed composite suits against some of the Defendants for design infringement as well as for passing off. The interim injunction was denied to the Plaintiff in the suits on the ground of infringement of design, and the subsequent appeals of the Plaintiff before the Division Bench of the Delhi High Court were also dismissed. However, the Plaintiff contended that notwithstanding the denial of interim injunction on the ground of infringement of design, the Plaintiff was entitled to interim injunction in these suits on the ground of passing off.

(1.1 Some images of the Plaintiff’s design for its footwear “CROCS”)

The counsel on behalf of the Defendants, while opposing the applications of the Plaintiff for interim relief on merits, inter alia contended that the suits, on the basis of averments made in the plaints, are not maintainable in the light of the dicta of the Five Judge Bench of this Court in Carlsberg Breweries case.

It is most pertinent to mention herein that The Designs Act, 2000 under Section 2(d) defines “design” as meaning only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article....which in the finished article to appeal to and are judged solely by the eye; but does not include....any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in section 479 of the Indian Penal Code (45 of 1860) or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957 (14 of 1957).

ISSUE

Since the very shape of the footwear that was registered by the Plaintiff as a design was claimed as a trademark in its suits for passing-off, the issue before the court was - Whether a registered design of the Plaintiff can constitute a trade mark, conferring on the Plaintiff a right to restrain another on the ground of both, infringement of design and passing off?

CONTENTIONS OF BOTH THE PARTIES

It was the case of the Plaintiff that the distinct design of its footwear can be used as a ‘trade mark’ on the ground that the Trade Marks Act, 1999 (or TM Act) recognizes shape/design of goods as a trade mark. Hence, a passing off action based on its shape of footwear, which may also have been claimed as a design was maintainable. The counsel for the Plaintiff also relied on Carlsberg Breweries case to argue that the same provided for the joinder of causes of action of the suits on the ground of infringement of design and passing off, and thus passing-off remedy is clearly available to a registered proprietor of a design as well.

The counsel for the Defendants, on the other hand, contended that the Carlsberg Breweries case did not overrule the dictum in the Mohan Lal case that a suit for passing off based on design can be maintained only if the something extra than the registered design is claimed as trade mark. It was argued that it is not the Defendants’ case, that a passing-off remedy is not available to a registered proprietor of a design, however, there are certain limitations and a passing off action has been held to be maintainable by the court in Mohan Lal as well as in Carlsberg with respect to elements of trade dress and overall get up, other than registered design and not with respect to the registered design. It was further pointed out that the plaint contains an express admission of the Plaintiff using the registered design as a shape/trade mark/trade dress and the Plaintiff has neither pleaded nor argued as to what is the overall get up and trade dress beyond the registered design, qua which passing off is claimed.

The counsel for the Plaintiff in its rejoinder on the aspect of maintainability contended that (i) definition of mark under Section 2(m) of the TM Act includes shape of goods (ii)bar to a design being a trade mark is only contained in the Designs Act and not in the TM Act (iii) The TM Act does not say that if the mark is a design, it cannot be registered (iv) thus, cancellation can only be of a design if it is a trade mark and not of the trade mark. The counsel for the Plaintiff, citing the Carlsberg Breweries case contended that the judgment cannot be interpreted as holding that there can be no passing off action in relation to a shape trade mark. The counsel also argued that merely because each of the Defendants, while copying the design of the Plaintiff, instead of the brand name of the Plaintiff put their own brand name on the product, does not defeat the action for passing off.

The counsel for the Defendant advanced further arguments on the issue of non-maintainability and contended that that if a shape of goods/product is registered as a trade mark, it cannot be registered as a design under Section 2(d) of the Designs Act and to hold, that if it is vice-versa, an action for passing off would be maintainable, would amount to conferring rights better than as may be available by registration and the same has been negatived in the Carlsberg Breweries case.

FINDINGS OF THE COURT AND DECREE:

The Hon’ble Court while dismissing the suits opined that a registered design confers on the registrant, only the right to restrain another from infringing the design and not to, also claim the registered design as its trade mark/trade dress, restraining another from passing off its goods as that of the registrant.

The Court rejected the contention of the counsel for the Plaintiff that in the absence of any prohibition in the TM Act to a design being a trade mark, in an action for infringement of a trade mark or passing off, is irrelevant that what is claimed as a trade mark is registered as a design. The Court held that “the intention of the Legislature is clear from the prohibition contained in the Designs Act, and to accept the contention of the Plaintiff would defeat the legislative intent and the enactment of the statute has to be respected. Once the legislative intent is that a trade mark cannot be a design, the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article, even if used as a trade mark, cease to be a trade mark on registration being granted to the same as a design, and a registrant is to be deemed in law to have surrendered, abandoned, acquiesced and waived all rights to use such features as a trade mark. Else, there would be an anomalous situation, with there being in existence a prohibition to use a trade mark as a design but there being no prohibition to use of a design as a trade mark.”

After a careful consideration of the contentions of both parties in consonance with the provisions of the Designs Act and the TM Act, and the Carlsberg Breweries case, the Court held that a registered design cannot constitute a trade mark. If there are features other than those registered as a design and are shown to be used as a trade mark and with respect to which goodwill has been acquired, it is only those extra features which can be protected as a trade mark. A registrant of a design would thus be entitled to maintain an action for passing off against other, not by showing that such another has adopted the registered design of the registrant but by showing that the product of such registrant, besides the registered design, also has other/extra features and goodwill in respect whereof has accrued and which extra features have been adopted / copied by another. For copying registered design however, only an action for infringement under the Designs Act would lie.

Carlsberg Breweries case thus cannot be held as striking a different note than the majority view in the Mohan Lal case, the Court concluded. As a corollary, the Hon’ble Court held that design cannot be used as a trade mark as well. The suits were thus held to be not maintainable and were dismissed.

Conclusion

Both the counsels for the Plaintiff and the Defendant argued on the premise of the Mohan Lal and the Carlsberg Breweries case. However, both sides presented contrasting interpretations as to whether a suit for passing-off could be maintained on the same elements that have been protected as a design. The Hon’ble Court by way of the present judgment has provided more clarity and certainty on the issue and the judgment is a welcome step in the jurisprudence of trade dress actions that are entirely based on product design.

[1] CS(COMM) 903/2018

[2] C.S.(COMM) 690/2018

[3] 2013 (55) PTC 61 (Del) (FB)

The article was originally posted on www.lexology.com on Match 11, 2019 and can be accessed here.