$~6 to 11
*
IN THE
HIGH COURT OF DELHI AT NEW DELHI
+
RFA(OS)(COMM)
22/2019 & CM APP No. 22655/2019 (stay)
M/S CROCS
INC USA
Through:
.....
Appellant
Mr. Akhil Sibal, Sr.Adv. with
Mr.S.K. Bansal, Mr.Ajay Amitabh
Suman, Mr.Nikhil Chawla and
Ms.Shriya Misra, Advocates
versus
M/S BATA
INDIA & ORS
Through:
.....
Respondents
Mr.Neeraj Grover, Mr.Anushka
Arora
and Mr.Vasui Tarpriya, Advocates
+
RFA(OS)(COMM)
23/2019 & CM APP No. 22660/2019 (stay)
M/S CROCS
INC USA
Through:
.....
Appellant
Mr. Akhil Sibal, Sr.Adv. with
Mr.S.K. Bansal, Mr.Ajay Amitabh
Suman, Mr.Nikhil Chawla and
Ms.Shriya
Misra, Advocates
versus
M/S LIBERTY SHOES LTD & ORS .....
Respondents
Through: Mr.Jayant Mehta, Mr.Kapil Wadhwa,
Ms.Devyani Nath and Ms.Deepika
Pokharia,
Advocates
+
RFA(OS)(COMM)
24/2019 & CM APP No. 22664/2019 (stay)
M/S CROCS
INC USA
Through
.....
Appellant
Mr. Akhil Sibal, Sr.Adv. with
Mr.S.K. Bansal, Mr.Ajay Amitabh
Suman, Mr.Nikhil Chawla and
Ms.Shriya Misra, Advocates
RFA (OS) (COMM) 22/2019 & other connected matters Page 1 of 16
versus
AQUALITE INDIA
LIMITED & ANR .....
Respondents
Through: Mr.Peeyoosh Kalra with Mr.Rohan
Seth,
Advocates
+
RFA(OS)(COMM)
25/2019 & CM APP No. 22667/2019 (stay)
M/S CROCS
INC USA
Through:
..... Appellant
Mr. Akhil Sibal, Sr.Adv. with
Mr.S.K. Bansal, Mr.Ajay Amitabh
Suman, Mr.Nikhil Chawla and
Ms.Shriya
Misra, Advocates
versus
M/S
BIOWORLD MERCHANDISING INDIA LTD & ANR
.....
Respondents
Through: Mr.Anil Dutt, Ms.V.S. Mani and
Ms.
Sutapa Jana, Advocates for
Respondent No.1
+
RFA(OS)(COMM)
26/2019 & CM APP No. 22670/2019 (stay)
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M/S
CROCS INC USA
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..... Appellant
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Through:
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Mr. Akhil
Sibal,
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Sr.Adv.
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with
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Mr.S.K.
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Bansal,
Mr.Ajay Amitabh
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Suman,
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Mr.Nikhil
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Chawla
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and
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Ms.Shriya
Misra, Advocates
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versus
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M/S
RELAXO FOOTWEAR LTD
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..... Respondent
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Through:
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Mr.M.K. Miglani with Mr.Anand Raj,
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|||
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Advocates
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RFA (OS) (COMM) 22/2019 & other connected matters Page 2 of 16
+
RFA(OS)(COMM)
27/2019 & CM APP No. 22674/2019 (stay)
M/S CROCS
INC USA
Through:
.....
Appellant
Mr. Akhil Sibal, Sr.Adv. with
Mr.S.K. Bansal, Mr.Ajay Amitabh
Suman, Mr.Nikhil Chawla and
Ms.Shriya Misra, Advocates
versus
M/S ACTION SHOES PVT LTD &
ORS ..... Respondents
Through: Mr.Kapil Wadhwa, Ms.Devyani
Nath and Ms.Deepika Pokharia, Advocates
CORAM:
JUSTICE S.MURALIDHAR
JUSTICE ASHA MENON
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O R D E R
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%
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29.05.2019
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CM
Appl.Nos. 22655/2019, 22660/2019, 22664/2019, 22667/2019, 22670/2019 &
22674/2019 (stay)
1.
The six appeals in which these
applications for interim relief have been filed, are directed against the
common impugned order dated 18th February 2019 passed by the learned Single Judge whereby the six suits
filed by the Appellant/Plaintiff against the respective Respondents/Defendants
for passing off have been dismissed as not maintainable. The appeals, which
raise a common question of law, were admitted by this Court by the order dated
13th May 2019. On the same day notice was issued in these applications
returnable today.
2. The six
suits dismissed by the impugned judgment dated 18th February
RFA (OS) (COMM) 22/2019 & other connected matters Page 3 of 16
2019 of the learned Single Judge (the name of the respective Defendant
is indicated in brackets) are: CS (COMM) Nos. 903/2018 (Aqualite), 905/2016
(Action), 906/2016 (Bioworld), 1415/2016 (Liberty), 569/2017 (Bata) and
571/2017 (Relaxo). For the sake of convenience, hereafter in this order, the
Appellant is referred to as the Plaintiff and each of the Respondents as
Defendants.
3.
The aforementioned suits,
collectively referred to as Shape Trademark Suits (STSs), pertained to the Plaintiff‟s
rights in the „Crocs Design Footwear‟ as a trademark/trade dress. In each of
the said STSs, the relief sought was for a permanent injunction to restrain the
Defendants from passing off their footwear as that of the Plaintiff under the
trademark
„CROCS‟ by adopting and copying the shape trademark
and trade dress of the Plaintiff and for ancillary reliefs. In each of the STSs
a separate application was filed for interim relief under Order XXXIX Rules 1
& 2 of the Code of Civil Procedure, 1908 (CPC).
4.
The Plaintiff also filed six
other suits against the same Defendants for infringement of its registered
design [hereafter referred to as Design Infringement Suits (DISs)] along with
another suit CS (Comm) No.53 of
2018 („Kidz‟). This was on the basis of the proprietary right claim by
the Plaintiff with respect to the unique CROCS design in relation to footwear
for which it had obtained design Registration Nos.197685 and 197686 both dated
28th May 2004, renewed upto 28th May, 2019.
5.
According to the Appellant, in view of the judgment of the Full Bench
RFA (OS) (COMM) 22/2019 & other connected matters Page 4 of 16
(FB) of this High Court in Mohan Lal v. Sona Paint & Hardwares
(2013) 55 PTC 61 (Del)(FB) (hereafter „Mohan Lal‟) holding
that a composite suit for infringement of a registered
design as well as for passing off qua
the design as a shape trademark was not maintainable, the aforementioned two
sets of suits were filed. The 7 DISs and the 6 STSs were being heard together
by the learned Single Judge.
6.
Initially, by a common order
dated 8th February, 2018 the learned Single Judge dismissed the Plaintiff‟s
applications for interim injunction in the DISs while adjourning similar
applications in two of the STSs for arguments. The appeals filed by the
Plaintiff against the aforementioned
order dated 8th February 2018 were dismissed by the Division Bench (DB) of this Court
by a judgment dated 24th January, 2019. While dismissing the appeals, the DB directed that the
DISs and the STSs should be listed and heard together by the learned Single
Judge. The DB further directed that:
“The Defendants' contentions in respect of the ad-interim injunctions -
and whether they are to be confirmed during pendency of shape trademark/passing
off suits of the plaintiff as well as plaintiffs arguments for interim
injunction in the passing off claim (in the composite suits) shall be taken up
together and decided, by the Single Judge.”
7.
The STSs along with the
applications for interim injunction were thereafter again listed before the
learned Single Judge. By the impugned order dated 18th February 2019, the learned
Single Judge dismissed the STSs holding them to be not maintainable. The
learned Single Judge reached that conclusion on a reading of the judgment of
the FB in Mohan Lal and the
RFA (OS) (COMM) 22/2019 & other connected matters Page 5 of 16
subsequent judgment of the Five Judges Bench (FJB)
of this Court in Carlsberg Breweries v. Som Distilleries 256 (2019) DLT 1 (hereafter
Carlsberg). According to the learned Single Judge, the passing off
pleaded in the plaint was on the basis of use by the Defendants of
what was registered by the Plaintiff as a design and in terms of the
aforementioned two decisions such a plea was “not permissible in law”. Since
the suits themselves were held to be not maintainable, the learned Single Judge
was of the view that there was no need to deal with the prayer for interim
injunction.
8.
Mr. Akhil Sibal, learned Senior
counsel for the Plaintiff, at the outset, clarified that the Plaintiff was at
this stage seeking a limited interim relief to the effect that during the
pendency of these appeals, the impugned judgment of the learned Single Judge
would not constitute a precedent so as to prevent the Plaintiff from filing
similar STSs against parties (other than the Defendants herein).
9.
The short question that,
therefore, arises for consideration in the present applications, is whether the
Plaintiff has a prima facie case in
its favour to seek the above interim relief; whether the balance of convenience
is in favour of the Plaintiff and whether the Plaintiff would suffer
irreparable hardship if such interim relief were to be refused?
10. Mr. Sibal
contended that the learned Single Judge erred in holding that
the majority view in Mohan Lal as modified by the
judgment of the FJB in Carlsberg was that no passing off
action would lie in respect of a registered
RFA (OS) (COMM) 22/2019 & other connected matters Page 6 of 16
design
used as a trademark. He submitted that the learned Single Judge has
in effect
adopted the view of the minority in Mohan Lal when in fact even
in light
of the judgment of the FJB in Carlsberg it is the majority view of
the
FB in Mohan
Lal that prevails as far as this aspect is concerned.
11. On the other hand, Mr. Jayant Mehta, learned counsel appearing for the
Defendants, submitted that the learned Single Judge correctly understood the
aforementioned judgments and no error has been committed in holding that the
passing off suits themselves were not maintainable.
12.
In order to appreciate the above
submissions a reference may be made first to the view of the majority of the FB
in Mohan
Lal. The three issues on which the FB deliberated in Mohan
Lal were:
“I. Whether the suit for infringement of registered
Design is maintainable against another registered proprietor of the design
under the Designs Act, 2000?
II.
Whether there can be an
availability of remedy of passing off in absence of express saving or
preservation of the common law by the Designs Act, 2000 and more so when the
rights and remedies under the Act are statutory in nature?
III.
Whether the conception of passing
off as available under the Trade Marks can be joined with the action under the
Designs Act when the same is mutually inconsistent with that of remedy under
the Designs Act, 2000?
13.
For the purposes of the present
applications, Issue II above is alone relevant. On Issue II, the majority of
two learned Judges in the FB in Mohan Lal held as under:
RFA (OS) (COMM) 22/2019 & other connected matters Page 7 of 16
(i)
A design includes a shape of
configuration as is evident from the definition of „design‟ under Section 2 (d)
of the Designs Act, 2000 (DA).
(ii)
A design can be used as a
trademark and if by virtue of its use, goodwill is generated in the course of
trade of business, it can be protected by an action in the nature of passing
off.
(iii)
While the Trade Marks Act, 1999
(TMA) confers certain statutory rights qua registered trademark, it does not
deprive a user of an unregistered trademark the right to protect the misuse of
his mark by a Defendant who is in possession of a registered trademark.
(iv)
Therefore, in so far as a design,
which is registered under the DA is concerned, it may not have the statutory
rights, which a registered trade mark has, under the TMA. However, the
registrant of the design “would certainly have the right to take remedial steps
to correct a wrong committed by a defendant by instituting a passing off
action.” If such an action was instituted “the plaintiff would have to
demonstrate that the registered design was used by him as a trade mark which,
in the minds of the purchasing public is associated with his goods or services
which, have acquired goodwill/reputation which is worth protecting.”
(v)
Such a passing off action would
be based on a plea that “the design, which is an unregistered mark, was being
used by the plaintiff for the purposes of business; and that the plaintiffs
goods and/or services had
RFA (OS) (COMM) 22/2019 & other connected matters Page 8 of 16
acquired a reputation and/or goodwill, which were identified in the
minds of the consumers, by associating the design / the mark, with the goods
and / or services.”
(vi)
In other words, the plea would be
that “the design which was being used as a mark identified the plaintiff, as
the source of the goods supplied or services offered.”
(vii) “Therefore,
having regard to the definition of a design under Section
2(d) of the Designs Act, it may not be possible to
register simultaneously the same mater as a design and a trade mark. However,
post registration under Section 11 of the Designs Act, there can be no
limitation on its use as a trademark by the registrant of the design. The
reason being: the use of a registered design as a trade mark, is not provided
as a ground for its cancellation under Section 19 of the Designs Act.”
14.
The majority in Mohan
Lal then proceeded to consider Issue III viz., whether a composite suit
can be filed for infringement of a registered design along with an action for
passing off and answered this question in the negative. However, it was held
that if two separate suits are filed for the two reliefs, the Court could try
the two suits together.
15.
Finally while answering Issue II,
in summary, the majority in Mohan Lal held that
a “holder of a registered design can institute an action for passing
off.”
RFA (OS) (COMM) 22/2019 & other connected matters Page 9 of 16
16. The
minority view of Manmohan Singh J. in Mohan Lal was that:
“134. (b) The remedy of passing off in so far as it
relates to claim of protection for shape of articles is not available for the
purposes of enforcement of rights and remedies under the Design Act. The said
remedy is clearly absent under the Designs Act considering the avowed objective
of the Act of 2000 which is to provide limited protection with no unnecessary
extension.
(c)
The remedy of passing off in so
far as it relates to claim of protection for shape of articles cannot be joined
with the suit for infringement of the registered Design. The said remedy of
passing off is available in alternative to the statutory protection conferred
by the Design Right. For the purposes of the same, the suitor has to elect between
the two inconsistent rights and remedies having distinct objects and policies.”
17. Under the sub-heading „Additional legal points determined‟ Manmohan
Singh, J. Further held as under:
(a)
Notwithstanding the above said
conclusion in (b) and (c), the remedy of passing off would continue to be
available along with the infringement of registered designs and can be joined
with the same in order to prevent consumer confusion which may be caused by the
use of trade mark, get up, trade dress or in any other manner excepting the
shape of the goods which is or was forming the subject matter of the
registration of the Design.
(b)
The remedy of the passing off in
so far as the shape of the article is concerned shall also be available even
during currency of the design monopoly or even after the expiry of same to the
extent that the claim of the feature of the shape is not covered within the
novelty claim under the Design monopoly rights and the said claim of the
protection qualifies all the necessary ingredients of the Trade Mark.
(c)
A remedy of passing off in so far
as the shape of the article is concerned shall not be available even after the
expiry of the Design to the extent the said feature of the shape of the article
is covered within
RFA (OS) (COMM) 22/2019 & other connected matters Page 10 of 16
the novelty claim as made under the Design Right as
after expiration of the Design, the novel shape claimed under the Design Act
goes in public domain.”
18. Only one of the issues considered by the FB in Mohan Lal viz., Issue III
constituted the subject matter of the reference before the FJB in Carlsberg.
The said issue was whether a composite suit in relation to infringement of a
registered design and for passing off was maintainable? In other words, Issue
II, viz., whether a passing off action was maintainable along with an action
for infringement of a registered design was not referred to and was, therefore,
not before the FJB in Carlsberg.
19.
The above Issue III was answered
by the FJB in Carlsberg in the affirmative by holding that “a composite suit
that joins two causes of action - one for infringement of a registered design
and the other for passing of, of the plaintiffs goods - is maintainable.”
Therefore, as far as the ratio of the judgment in Carlsberg is concerned,
it was simply that there could be one composite suit to combine the two causes
of action: design infringement and passing off.
20.
However, in the leading judgment
of the FJB, authored by S. Ravindra Bhat, J., in the course of reasoning
leading to the above conclusion, a reference was made to an aspect on which it
was thought that the majority of the FB in Mohan Lal was „inaccurate‟. In paras
43 and 44 of the judgment of Bhat, J. in Carslberg it was observed as under:
“43. This court is also of the opinion that the Full Bench ruling in Mohan
Lal (supra) made an
observation, which is inaccurate: it
RFA (OS) (COMM) 22/2019 & other connected matters Page 11 of 16
firstly correctly noted that registration as a
design is not possible, of a trade mark; it, however later noted that “post
registration under Section 11 of the Designs Act, there can be no limitation on
its use as a trademark by the registrant of the design. The reason being: the
use of a registered design as a trade mark, is not provided as a ground for its
cancellation under Section 19 of the Designs Act.” This observation ignores
that the Designs Act, Section 19 (e) specifically exposes a registered design
to cancellation when “(e) it is not a design as defined under clause
(d)
of section 2.” The reason for
this is that Section 2 of the Designs Act, defines “design” as “...the features
of shape, configuration, pattern, ornament or composition of lines or colours
applied to any article......; 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.......” Therefore,
if the registered design per se is
used as a trade mark, it apparently can be cancelled. The larger legal
formulation in Mohan Lal (supra), that a passing off action i.e. one which is not limited or
restricted to trademark use
alone, but the overall get up or "trade dress" however, is
correct; as long as the elements of the design are not used as a trademark, but
a larger trade dress get up, presentation of the product through its packaging
and so on, given that a “passing off” claim can include but is also broader
than infringement of a trademark, the cause of action against such use lies.
(emphasis in original)
44.
It is evident that there is a
similarity between the nature of inferences and conclusions that are presented
to the court, in the two causes of action. Significantly, the complaint of
passing off as well as that of design infringement emanate from the same fact:
sale or offer for sale, by the defendant of the rival product. In this context,
it is relevant to notice that the expression "cause of action" was
explained in this incisive manner in Kusum
Ingots & Alloys v Union of India
2004 (6) SCC 254 as:
"every fact which would be necessary for the plaintiff
to prove, if traversed, in order to support his right to the judgment of the
Court. Negatively put, it would mean that everything which, if not proved,
gives the defendant an
RFA (OS) (COMM) 22/2019 & other connected matters Page 12 of 16
immediate right to judgment, would be part of cause of action."
21.
There were extensive arguments
before this Court, as it was before the learned Single Judge, on whether the
FJB had in making the above observations in Carlsberg held that a
passing off action is not maintainable in relation to the use of a registered
design as a trademark but only in relation to its use as „a larger trade dress,
get up, presentation of the products through its packaging‟ and so on.
22. It must
in the first
instance be noted
that the above
discussion in
Carlsberg was only
in the context of whether a composite cause of action can be „split in some
manner‟ and presented as different suits considering that the basic facts which
compelled the Plaintiff to approach the Court complaining of design
infringement “are the same as in the case of passing off”. As the discussion in
paragraphs earlier to and subsequent to the above extracted paragraph of the
opinion of Bhat, J. would show, the above observations were only in this
limited context and for reaching the conclusion that it was not necessary to
file two separate suits and that there could be one composite suit claiming
both reliefs.
23. Secondly, the sentence in para 43 of the
judgment of Bhat, J. that “the larger legal formulation in Mohan Lal that a passing
off action i.e. one which is not limited or restricted to trademark use alone,
but the overall get up or trade dress however, is correct” appears prima facie to place the issue beyond
doubt that the FJB in Carlsberg upheld the view of the
majority of
RFA (OS) (COMM) 22/2019 & other connected matters Page 13 of 16
the FB in Mohan Lal that a passing off action
was indeed maintainable in respect of a registered design used as a trademark.
To this Court is appears prima facie on
a reading of the above para 43, together with the preceding and succeeding para, as a whole that the only qualification in Carlsberg
was that if such registered design was used as a trademark then it can lead to
the cancellation of the registration of such design. The words “as long as the
elements of the design are not used as a trademark but a larger trade dress get
up, presentation of the products through its packaging and so on” has to be
seen in the context of the discussion preceding it which turns on what can be
registered as a design and what cannot. Importantly, the FJB does not
explicitly or impliedly overrule the FB in Mohan Lal as regards the answer to
Issue II and rightly so since the FJB in Carlsberg was concerned only with
Issue III (whether a composite suit for design infringement and passing off was
maintainable).
24.
However, the learned Single Judge
has in the impugned order understood the above observations in para 43 of the
judgment of Bhat J. as leading to the position that the majority in Mohan
Lal did not recognise the protectability of a registered design when
used as a trademark. Prima facie
this understanding by the learned Single Judge in
the impugned judgment of what the majority in Mohan Lal held and what
Bhat J. as part of the FJB in Carlsberg observed does not appear
to this Court to be correct. There is prima
facie merit in the contention on behalf of the Plaintiff that the impugned order of the learned Single
Judge unwittingly reiterates the minority view in Mohan Lal which by no
means was, even impliedly, affirmed by the FJB in Carlsberg.
RFA (OS) (COMM) 22/2019 & other connected matters Page 14 of 16
25.
For the above reasons, this Court
is of the view that the Plaintiff has made out a prima facie case for grant of the limited interim relief as prayed
for. Such interim relief would in no way prejudice the present Defendants since
the STSs against them are not being revived for the present and no similar STSs
against any of them is permitted to be filed by the present Plaintiff during
the pendency of the present appeals. The balance of convenience is, therefore,
in favour of the Plaintiff. Further, the impugned order if not made
inapplicable to pending and proposed suits of the Plaintiff against other parties,
would cause undue hardship to the Plaintiff as the in limine dismissal of
such suits as non-maintainable would be imminent.
26. For the aforementioned reasons, which are prima facie, this Court directs that during the pendency of these
appeals, the impugned judgment of the learned Single Judge will not constitute
a precedent to bar other STSs of the Plaintiff, whether pending or to be filed
against parties (other than the Respondents/Defendants in these appeals)
seeking the relief of restraint of passing off qua its registered design used as a trademark/trade dress, get up,
presentation of the products through its packaging, and so on. In other words,
the maintainability of such STSs, if an issue arises in that regard, would be
decided independent of the impugned judgment of the learned Single Judge which
is under challenge in the present appeals.
27. The
applications are disposed of in the above terms.
RFA (OS) (COMM) 22/2019 & other connected matters Page 15 of 16
RFA (OS)
(COMM) No. 22/2019, 23/2019, 24/2019, 25/2019, 26/2019 & 27/2019
28.
List for final hearing on 17th October, 2019. Both parties
shall file within eight weeks their respective compilation of documents forming
part of the suit record along with their written arguments.
S.
MURALIDHAR,
J.
ASHA MENON, J.
MAY 29, 2019
mw
RFA (OS) (COMM) 22/2019 & other connected matters Page 16 of 16
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