The overlap between trade mark and design rights has been debated, discussed, and re-discussed fora long time with a variety of different opinions being put on the table. It is an old saying that a picture beautifully painted is worth more than a thousand words. This phrase couldnot be truer than in the context of trade marks and designs rights. While a catchy trade dress fortifies the product’s association with its source of origin, an attractively designed product enhances its aesthetic value and commercial appeal. However, these two different kinds of intellectual properties are generally made up of certain common features and tend to intersect with each other.
A design, as defined under Section 2(d) of the Designs Act, 2000, means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any trade mark.
Section 2(1)(zb) of the Trade Marks Act, 1999, defines a trade mark as a mark which can be graphically represented and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.It is the latter part of the definition of a trade markwhich generally brings out the overlap as it specifically includes shape of goods, packaging, and combination of colours.
The shape of a product, its packaging or combination of colours used on a product may be a trade mark/trade dress and/or a design applied to the product. The difference lies in the distinct purposes fulfilled by trade mark and design.On one hand, a design is applied to aproduct to merely enhance its aesthetic value and/or commercial appeal. On the other hand, a trade markis applied to a product to showcase its source of origin. A trade mark may also appeal to the eye and enhance aesthetic value of the product but it is necessary that it acts as an association between the product and the source of origin/manufacturer/producer of the product.If a product feature is merely enhancing aesthetic value and/or commercial appeal and/or appeals to the eye without pin pointing any source of origin, it is clearly the subject matter of design rights. However, if it is enhancing the aesthetic value and/or commercial appeal and/or appeals to the eye while also indicating the source of origin, an overlap between trade mark and design rights comes into the picture.
In India, parallel statutory protection cannot be sought under the Trade Marks Act and Designs Act. This is because the definition of Designs (as mentioned above) clearly excludes a trade mark. However, it is much debated whether statutory protection on design rights and common law protection on trade mark rights can simultaneously exist or not, in cases where a registered design is also acting as a trademark because it indicates the source of origin to consumers.
The Delhi High court in Mohan Lal and Ors.V. Sona Paint &Hardwares and Ors.[AIR 2013 Delhi 143]dealt with this issue while deciding a dispute between two competing owners of registered designs. The issues in consideration were:
- Whether the suit for infringement of a registered design is maintainable against another registered proprietor of the design under the Designs Act, 2000.
- Whether there can be 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 or remedies under the Act are statutory in nature.
- Whether the conception of passing off, as available under the Trade Marks Act,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.
The Court answered in affirmative for the first and second issues, stating that the holder of a registered design could institute a suit against a defendant who is also in possession of a registered design. As regards the second issue, it ruled that a registered proprietor of design, who is also using the said design as a trademark, would be entitled to institute an action of passing off in respect of the same, provided such action meets the triple test requirement of a passing off action.The Court observed that having regard to the definition of a design under the Designs Act, it may not be possible to register simultaneously the same matter as a design and a trade mark; however, post registration, there can be no limitation on its use as a trade mark by the registered proprietor of the design. The Court opined that this is because the use of a registered design as a trademark is not given as a ground for cancellation under Section 19 of the Designs Act.
On the issue of maintainabilityof a composite suit, the court held that a composite suit for infringement of a registered design and a passing off action would not lie as the cause of actionfor the two suits would be different.The Court noted that a cause of action means every fact which the plaintiff will have to prove in order to obtain a judgment in his favour. A suit for design infringement would be filed to injunct the design piracy wherein the plaintiff would aver that the design is registered in his favour, the registration is valid, and the plaintiff is the inventor of the design which is new or novel and significantly distinguishable from prior known and published designs. Whereas, in a suit for passing off, the plaintiff would have to aver that the particular design is being used as an indicator for source of origin, it has garnered goodwill and reputation, the defendant is trying to misrepresent that its goods/services are those offered by the plaintiff, and such misrepresentation is causing or likely to cause damage to the plaintiff. The Court opined that two set of facts and basic edifice are different creating distinct cause of action and thus, two different suits should be filed. However, it also remarked that a court may try the two different suits together, if they are filed in close proximity and/or it is of the view that there are aspects which are common between the two suits.
Thereafter, in2018, the Delhi High Court caused quite a stir in the IP world via its judgment in Carlsberg Breweries A/S v. Som Distilleries and Breweries Ltd. [AIR 2019 Delhi 23].A single judge vide order dated May 02, 2017 referred the case to the Special Bench of five judges to examine the aspect of maintainability of a composite suit in relation to infringement of a registered design and for passing off where the parties are the same, thereby re-considering the decision of the same court in Mohan Lal v. Sona Paint &Hardwares.
The Special Bench addressed the question of maintainability of a composite suit by discussing the provisions of Code of Civil Procedure, 1908, (“CPC”) specifically, Order II Rule 3 which provides for joinder of different causes of action in the same suit. The Court also alluded to the Supreme Court’s judgment in PremLalaNathaand HemaKhattar and Ors. v. Shiv Khera [2017 (7) SCC 716] which extensively dealt with the issue of joinder of cause of action and consequences of misjoinder. Placing reliance on the said and such authorities, the Court concluded that there is no bar to maintainability of suits, on the perceived ground of misjoinder of causes of action.The Court also specifically mentioned the judgments of Dabur India v.KR Industries and Dhodha House v. SK Maingiand noted thatthese judgments had not held that the court has no jurisdiction to try a composite suit encompassing two causes of action. The provisions of Order II Rule 3 of CPC entitle the court to entertain a composite suit and the only caveat to this rule would be that the jurisdiction in respect of one cause of action is lacking.
The Court further observed that the complaint of passing off as well as that of design infringement emanate from the same fact; sale or offer to sale, by the defendant of the rival product. Therefore, the basic facts which impel a plaintiff to approach the court are the same in design infringement as well as passing off, and thus, it is inconceivable that a cause of action can be “split” and presented in two different suits.
Justice Valmiki Mehta, while agreeing with the rest of the judges, delivered a separate opinion. He observed that since the transaction of sale and/or offer to sell by the defendant of the articles containing the same shape or features or combination of colours, etc.will be in question in both the causes of action of design infringement and trade mark passing off, a substantial part of the bundles of facts of the two actions will be same as to whether or not the article being sold by the defendant is or is not a fraudulent or obvious imitation to the article of the plaintiff. Thus, to a considerable extent, the evidence of the two causes of action would be common and therefore, in order to avoid multiplicity of proceedings, a joinder of the two causes of action should take place.In view thereof, the court overruled Mohan Lal’s conclusions on composite suit, stating that the same ignored material provisions of CPC.
Thereafter, the court considered Mohan Lal’s observation pertaining to the use of design as a trademark. Noting that the Bench, in the said judgment, based its reasoning on the ground that such use is not provided as a ground of cancellation under Section 19 of the Designs Act, the Court held that such observation ignores Section 19(1)(e) which provides that a design may be cancelled if it is not a design as defined under the Act. The definition of “design” under the Act specifically excludes a trademark and thus, Section 19(1)(e) exposes a design to cancellation when the same is used as a trademark.
However, the Court stated that the larger legal formulation of Mohan Lal, regarding a passing off action, one that is not limited to trademark use alone, but the overall get up of trade dress is correct. If the elements of registered design are not being used as a trade mark in its strict sense but rather as a larger trade dress get up of the product, presentation of the product through its packaging and so on, both cause of action – infringement of design and passing off –can lie together.
The next swing in the developing jurisprudence came through Crocs Inc. USA v.Aqualite India Ltd and Anr.wherein the Single Judge of the Delhi High Court, in a passing off suit, held that a registered design cannot be a trademark. The plaintiff was unsuccessful in a suit filed for design infringement due to lack of novelty and therefore, the plaintiff pressed for the injunction on the ground of passing off. As mentioned above, it was settled by the judgment in Carlsberg Breweries that as long as the elements of design are not used as a trade mark in the strict sense, but as a larger trade dress get up, presentation of the product through its packaging and so on, a passing off claim can sustain. On the basis of this, it was argued by the defendants that if the passing off is claimed in respect of elements of the design as a trade mark, no passing off action lies. The Court agreed with the defendantsand observed that the plaintiff had failed to controvert the defendants’ argument that the plaintiff’s passing off action is solely based on its registered design and the plaintiff was unable to specify any additional feature or part of a larger trade dress/get up, other than those constituted in the design.
The Court then discussed the legislative intent of the Designs Act and opined that the purpose of the Act is to grant a limited monopoly and after the term of registration, it should be open for anyone to use the said designs. It was observed that once a feature is registered as a design, the registrant is deemed to have surrendered, abandoned, acquiesced and waived its rights to use such feature as a trade mark. The Court dismissed the idea of using a design as a trademark stating that the legislative intent will be defeated if such usage is allowed. Citing the example of limited rights granted to a patent holder, the court asserted that the limited protection granted to design registrant cannot be extended to protection in perpetuity. Therefore,the Court opined that not only the registered design cannot be a trade mark during the period of design registration but even thereafter. Accordingly, the Court held that a registered design cannot constitute a trade mark; however if there are features other than those registered as a design and are shown to be used as a trade mark and with respect whereto goodwill has been acquired, it is only those extra features which can be protected as a trade mark. If there has been a copy of registered design, only an action for infringement under the Designs Act would lie.
However, in May 2019, the Delhi High Court admitted Crocs’ appeal against the above explained Single Judge’s adverse order dated February 18, 2019. The Plaintiff then filed an application for a limited interim relief i.e. the impugned judgment of the Single Judge would not constitute a precedent so as to prevent the plaintiff from filing similar Shape Trade Mark Suits (STSs) against parties (other than the Defendants herein). While deciding on the interim relief application, the court noted that the Carlsberg judgment prima facie appeared to have upheld the Full Bench view in Mohan Lal i.e. a passing off action was indeed maintainable in respect of a registered design used as a trade mark. The court specifically observed that the only qualification in Carlsberg was that a registered design would be vulnerable to a cancellation action, if the same is used as a trade mark. In view thereof, the Court stated that the Single Judge’s understanding of the two judgments –Mohan Lal and Carlsberg– does not appear to be correct.
The Court held that the Plaintiff made a prima facie case for granting of interim relief and that the balance of convenience is in its favour. In view thereof, it held that during the pendency of the appeal, the learned Single Judge’s order will not constitute as a precedent to bar other Shape Trade Mark suits of the plaintiff, whether pending or to be filed against parties other than the respondents/defendants in the appeal.
As evident from above, there is a constant stir and ongoing developments in the issue of overlap between trade mark and design rights. Therefore, it is advisable for the right holders to be cautious while enforcing such rights which fall under such an overlap area. All the remedies should be diligently consulted and a robust strategy is required to be formulated.
International Comparative Legal Guide to : Trade Marks 2020 – Overlap Between Trade Mark And Design Rights: Indian Perspective by Aprajita Nigam and Smrita Sinha
Article was first published in the ICLG to: Trade Marks