In a recent judgment passed by Delhi High Court, the court granted injunctive relief to Diageo Brands against Great Galleon Ventures on grounds of infringing Diageo’s registered design; however, no injunction was granted on ground of passing off.
Diageo Brands, the plaintiff, is in the business of alcoholic beverages and is the proprietor of a registered design referred to as the ‘Hipster’ in India, which was used for its products Black Dog (Black Reserve), Black Dog (Golden Reserve), Vat 69 and Black & White Hipster. It also claims common law rights in the trade dress and get up of the Hipster bottle which was launched in 2018 globally and in 2019 in India. In 2021, it came to the plaintiff’s knowledge that the defendant was marketing their Goa Gold product in bottles which were infringing its registered design and trade dress.
The court granted an ad interim injunction in February 2021 restraining the defendant from selling the impugned bottles.
The plaintiff impressed upon unique features of its registered design where the Hipster bottle was modelled on the shape and proportion of a smartphone and that no one had ever adopted an 180ml bottle/packaging of similar shape and configuration, with such aesthetic and visual appeal. The plaintiff gained considerable success for its Hipster bottles, selling cases worth Rs1 billion (US$12.2 million) in the span of 1½ years. The plaintiff also argued that it has common law rights in the trade dress and get up of their bottles which also acted as a source identifier.
The defendant countered these claims by questioning the validity of the registration of the Hipster design, which was admittedly created by third-party agency, and no documentation on the flow of rights from the design author to the plaintiff were submitted; that the configuration of the Hipster bottle was not new nor original and was inspired from hip flasks which is very common in liquor trade; and that the respective brands – the defendant’s GOA and the plaintiff’s VAT 69, BLACK DOG and BLACK & WHITE – bore no resemblance and that the trade dress were not similar.
The court analyzed five main issues in its ruling: who is the proprietor of the registered design; the legal effect of design registration for deciding the relief of grant of injunction; whether there has been fraudulent and obvious imitation of the plaintiff’s registered design to warrant an injunction; whether the defendant demonstrated any ground to seek cancellation of a registered design under Section 19 of the Design Act; and whether the trade dresses are similar enough to constitute passing-off.
To answer the first issue, the court held that even if the design creation was outsourced by the plaintiff, the plaintiff was the proprietor of registered design. The designer entity did not claim any ownership in the design and by virtue of Section 2(1)(j) of Designs Act, the person on whose behest the design was created would be the proprietor of the design.
For the second issue, the defendant argued that as the design registration is recently dated and the same is being disputed via cancellation action which is pending, the plaintiff should not be granted any injunction. A comparison was drawn between trademarks and designs – registration of a trademark is prima facie evidence of validity; however, there is no such provision in the design statute. The court observed that design can be challenged upon its registration, unlike a trademark which can be challenged prior to registration. However, if a design appears to be prima facie validly registered with all the necessary attributes for registration, and if the plaintiff is able to demonstrate a strong case of infringement/passing off/imitation, an injunction should follow. The court also observed that even at the interim stage, it may venture into grounds pleaded for cancellation of registered design, if reasonably demonstrated by the defendant.
On comparing the plaintiff’s Hipster bottle with the defendant’s impugned bottle, the court noticed that there were glaring and apparent similarities between the bottles and insignificant minor differences. The court was satisfied that the defendant’s bottle was deceptively similar to the plaintiff’s registered design. The court also considered the defendant’s admission that it was well aware of the plaintiff’s Hipster bottles in the market; those bottles were found at the defendant’s premises during visit by a court-appointed local commissioner and that the defendant was selling its product in different packaging prior to the impugned bottle (the defendant’s bottle was launched in 2021, i.e., subsequent to the plaintiff’s launch of the Hipster bottle).
The court concluded on the third issue that the defendant was attempting to ride upon the plaintiff’s goodwill and reputation by making meagre efforts or investment. It was held that the plaintiff has prima facie case in their favour with balance of convenience also in their favour since the plaintiff had made substantial and extensive expenses in creating, marketing and promoting its Hipster bottles and it will suffer irreparable injury if an injunction is not granted.
For assessment on the fourth issue, the court found that none of the grounds for cancellation were prima facie made out by the defendant. All prior art submissions made by the defendant were different from the plaintiff’s registered design vis-à-vis key features.
To assess the defendant’s claim that plaintiff’s registered design is not new and original, the court considered quite a few judicial pronouncements to ascertain if such claim was sustainable. The court observed that what is protected under the designs law is not the article itself, but the idea/conceptualization which has been applied upon it, that both design and the design which is to be applied to an article should go together. The court concluded that the plaintiff’s registered design was “new and original”. It was noted that while a bottle/hip flask was not a new or novel invention by itself, the novelty of the design lies in the shape and configuration as applied to a bottle which was inspired by smartphones. The plaintiff’s Hipster product was the first in the market to take the visually-appealing features of a smartphone and applied onto pre-packaged alcohol.
The defendant was unable to prove that any other manufacturer or distributor of alcohol in the market also prefills and sells their product in a bottle that looks and feels like that of the plaintiff. Considering that a bottle is a common article which has common features, such as a neck, shoulders, etc., it has limited window for incorporation of artistic features; still, the plaintiff had used its creativity to significantly transform a bottle into a Hipster with distinguishable features, giving it an aesthetic appeal. With respect to defendant’s argument of mosaicking done by the plaintiff, the court rejected the same as the defendant could not substantiate which known designs were combined to get the registered design.
For the fifth issue, the court observed that a trade dress is a combination of various elements that together create a strong visual impression. The plaintiff’s counsel claimed that the Hipster’s combined visual features such as monochromatic colour scheme, etc., render it to be a distinctive trade dress which created strong visual impression in the consumer’s mind and acted as a source identifier. Analyzing both trade dresses, the court concluded that it cannot be said that there is much similarity in labels, trade dress, and get-up of the respective trade dresses and that there is likelihood of confusion vis-à-vis origin of products. The defendant’s bottle was boldly displaying the GOA brand; labels were dissimilar, as well as their marketed prices. Thus, the court ruled that key ingredients to uphold passing off claims were not present in the instant case like association of defendant’s label with plaintiff’s goods, etc. The court clarified passing off claims were ruled with respect to claims put forth by the plaintiff on trade dress, overall get-up, and product presentation through packaging only and not on design similarities for which the defendant was injuncted.
The court has touched upon several aspects of design law while dealing with this case. This case concisely analyzed various aspects of design infringement, facets of design registration and defence sought by the defendant pleading various grounds of cancellation of registered design questioning its validity to seek vacation of ex parte, ad interim injunction order. This case aptly summarizes how infringement of a registered design cannot be said to automatically transform into a passing off instance based on a product’s trade dress and that the classic trinity test laid down in juridical precedents should be fulfilled to sustain passing off claims.