Design Infringement and Passing Off

Introduction

In a judgment entitled Carlsberg Breweries A/S a landmark judgment was delivered on December 14, 2018, by a special five-judge bench of the Delhi High Court. V Som Distilleries and Breweries Ltd., 256 (2019) DLT 1 wherein it effectively overruled the previous judgment of the three-judge bench in Mohal Lal vs Sona Paint & Hardware and Ors., AIR 2013 Delhi 143 and held that it is possible to join and try in a composite suit two causes of action of passing off and design infringement.

In the case of Mohan Lal, it was held that the cause of action for a claim for infringement of a registered design is different from the cause of action on which the claim for dismissal is based and that two separate cases must therefore be brought.

Earlier in 2017, in the judgment entitled Cello Household Products v Modware India, AIR 2017 Bom 162, the rationale in the case of Mohan Lal was disregarded by the Bombay High Court, where both the design violation and the passing off acts were simultaneously upheld in the same suit. The judgment of Mohan Lal, however, was still effective and binding in the jurisdiction of the Delhi High Court until the Carlsberg judgment overruled it.

Design Infringement in India. How does it happen?

• The piracy of registered design in the design law 2000 in India is considered to be a breach of design. The regulations relating to the piracy of registered designs in India are provided for by Article 22 of the Designs Act, 2000. According to Article 2 22 of the Design Act 2000, it is illegal to imitate a design that has already been licensed without the permission of the designer or owner of the design. The Section also forbids the importation of any product or material that closely resembles a registered design.

• Infringing a registered design is if someone implements the design or other apparent or malicious design or imitation without the consent of the design owner or publishes it.

• The court or any adjudication body is not obliged to specifically compare the two articles in India to find out Design Infringe in India but should look at the articles from the point of view of an ordinary customer and check if the two articles create apparent confusion in the minds of consumers.

Analysis of Mohal Lal vs Sona Paint & Hardwares and Ors

1. Facts of the Case

The suit in question was brought against Sona Paint & Hardwares (defendant) by one Mohan Lal (plaintiff), challenging the defendant's violation of registered design as well as passing off in respect of mirror frames, almirah door handles, etc.

2. Issue of the Case

One of the substantial problems facing the Court was whether it was possible to file a Hybrid suit for infringement of a licensed design along with an action for passing off.

3. Observations

The Court held that because the cause of action for bringing the two suits was different, separate suits would have to be brought, but they may be tried together if filed at the same time or in near proximity, since there could be some elements that could be similar.

It was further noted that on the basis of a monopoly based on registration, which is based on the uniqueness, innovation and originality of the design, the fundamental edifice of a design infringement suit will be an action based on the use of the mark in exchange for the selling of products and for the provision of services, generation of prestige and goodwill, association of goodwill, etc.

Analysis of Carlsberg Breweries v Som Distilleries and Breweries

1. Facts of the Case

The suit in question was brought against Som Distilleries (defendant) by Carlsberg Breweries (plaintiff), challenging the violation of a licensed design as well as the transfer (of the trade dress of the plaintiff) in respect of the bottle and the overall uptake of the 'Carlsberg' label. The defendant objected to the frame of the complaint, pointing out that the two arguments (for passing off and relief relating to design infringement) could not be merged in one suit as per the Mohan Lal judgment. A single judge reviewed the submissions of both sides, concluding that a second look was needed for the issue decided in the case of Mohan Lal. Having regard to Rule 3 of Order II of the Code of Civil Procedure, 1908, which permits the joinder of causes of action, he referred to the question if, where the parties to the cases are the same, a composite suit may be retained for reconsideration by a larger bench.

2. Issue of the Case

The substantial issue before the Court was comparable to the issue in the case of Mohan Lal, i.e. to decide whether two causes of action can be joined in one Composite suit, one cause of action being infringement by the defendant of a design of the plaintiff registered under the Designs Act, 2000 and the second cause of action being the defendant's passing away.

3. Observations

The Special Bench acknowledged that there is a factual overlap between the two arguments with respect to the defendant's presentation of the products. In order to create a design violation, it is necessary to prove the defendant's dishonest imitation of the article and to prove passing off it is necessary to prove that the defendant has misrepresented to the public that its products are those of the complainant. The Court also took a dichotomous view that a trademark cannot be a trademark because the concept of design excludes a trademark and that it is a legitimate design. The problem of the display of goods is one of wider trade and not of a more narrowly defined trade mark, which otherwise precludes the right to design. The Court further observed that in order to assert a design right, the subject-matter must not in its stricter sense, be used as a trademark, but could constitute a greater commercial presence of the products at issue, which may, in turn, give rise to a passing off claim.

Interpretation from the Above Cases

In the Mohan Lal case, the Court claimed that the court could not accept that the ratio of a case is factual. The Court, while reading the Dabur India Ltd. and Dhodha House Supreme Court rulings, noted that these rulings did not determine that the Court did not have jurisdiction to bring two cases in a composite suit. The Court found that the Court was entitled to take a suit in composite, under the terms of Order II Rule 3 of the Code of Civil Procedure 1908, and the only exception to this rule was that it lacked competence in respect of one cause.

Conclusion

The Court with this judgment has cleared up the conundrum of the sustainability of a Composite case of infringement and dismissal. It is important to note that the tri-judge bench had failed to refer, in the case of Mohan Lal, to Order II, Rule 3 of the 1908 Code of Citizenship, which made it clear that courts could combine various causes of action. By the present decision, the five-judge bench correctly relied on Order II Rule 3 of the 1909 Code of Civil Procedure and held that this clause was meant to prevent superfluous numbers of suits. The increasing cost of litigation on the intelligent property, in particular, would give the plaintiffs considerable relief from the judgment on the retention of composite suits. Composite suits for infringement and transmission of designs will also encourage timely dispute resolution.

BY-

Ankita Rathi