Delhi High Court Rules on Copyright Dispute Between Heavy Vehicle Manufacturers

In a brief but interesting order Justice Ravindra Bhat of the Delhi High Court has vacated a year old ex-parte interim injunction in a copyright infringement suit filed by ‘Babbar Wreckers’ against Ashok Leyland and its allied companies allowing them to continue manufacturing the heavy vehicles that are required to be supplied to the Ministry of Defence as part of a government contract.

(i) Facts: The Plaintiffs had collaborated with Defendant No.1 – Leyland – to integrate their recovery equipment with the chassis manufactured by Leyland. This integration of the Plaintiff’s recovery equipment with the chassis manufactured by Leyland was due to the Army’s suggestion that the same be integrated. Prior to this Leyland’s vehicle had been rejected. The completed drawings of the prototype designged by Babbar were supplied to Leyland and the Army only in the year 2000. Prior to this Babbar had claimed to have developed the original prototype in 1996 itself when it had received a request from Leyland for access to its drawings for the recovery unit. On completion of the acceptance trials for the new integrated prototype developed by Babbar and Leyland, the Army placed orders with Leyland for supply of the integrated models. The initially understanding between the parties was that the manufacture of the recovery unit to be placed on the chassis would be divided between the Plaintiff and Defendant No. 2, a company by the name of ‘Perfect’, in a manner which ensured that the Plaintiff would get a larger slice of the pie. In addition Defendant No. 2 was also required to pay to the Plaintiffs a royalty for the use of the drawings. Defendant No. 2 however stopped paying the royalties and eventually Leyland started sub-contracting the entire requirement from Defendant No. 2 without the involvement of the Plaintiffs. The Plaintiffs therefore filed the present suit alleging that its copyright was being infringed since the defendants were reproducing three dimensional models from the engineering drawings whose copyright belonged to the Plaintiffs.

(ii) Judgment:

(a) Ownership of the Copyright: The Defendants in the present case challenged the Plaintiffs’ ownership of the Copyright in the drawings since the Plaintiff could not present before the Court any of the drawing from 1996 despite claiming that the same were drawn in 1996. The only drawings presented by the Plaintiffs were those from the year 2000 i.e. after Leyland had approached them with instructions from the Army to design a prototype that matched the Army’s specification. Given the context that the prototype was designed in pursuance to Army specifications and an Army tender the Court held the Government to be the owner of the works as per Section 17(d) of the Copyright Act which provides for the Central Government to be the first owner of all government works in all cases where there is no agreement to the contrary.

(b) Estoppel against challenging the copyright of the Plaintiffs: The Plaintiffs had contended that the fact that the Defendants had paid royalty for a period of 3 years meant that the Defendants were now estopped from challenging the Plaintiff’s ownership of the Copyright. The Defendants however responded stating that it was not possible to argue that they were estopped since it would amount to undermining public interest especially given the monopolistic nature of the claim. Justice Bhat accepted that the Defendant’s contention that the estoppel argument in the context of copyright would be inequitable especially since a copyright, when compared to other forms of intellectual property, provides for the longest duration of protection. In addition the Court also pointed out that the royalty was paid in only two instances and that the same was not paid in the last seven years without the Plaintiffs raising any objection.

(c) Interim Orders: The application seeking to vacate the interim injunction was thereby allowed with instructions to the Defendant to submit a bank guarantee of Rs. 30 lakhs until such time that the suit was decided on merits.

(iii) Conclusion: As food for thought I would like to ask our readers whether the Court should have even delved into the Copyright issues given the fact that Section 15 of the Copyright Act disallows copyright protection to any work which although capable of protection under the Designs Act has not been registered for the same and has been manufactured more than 50 times. Given the fact that the present copyright has been manufactured on an industrial scale and that it is capable of design protection could it be argued that the same may not be protected under the Copyright Act. If anything the Plaintiffs should have requested either for patent or design protection. Any thoughts?