A few days ago, I had discussed a Bombay HC Order involving Cello and Modware. Justice Patel had provided relief to Cello on account of Cello successfully establishing, prima facie, both passing off and design infringement.
Prashant, after reading the piece, put forth the following query:
“If the design of the bottle is acting as an indicator of source, doesn’t it follow that it can be registered as a trademark which means it is incapable of being registered as design because it falls foul of the definition of design under Section 2(d). right?”
For understanding the conflict in Prof. Basheer’s words, refer here.
Essentially, he covers two questions (related to our primary concern):
i. Can a Design Registrant Make a Claim of Passing Off?
ii. Can a Mark that has Gained TM Status Continue to be Granted Protection under Design law?
These were precisely the issues that were dealt with in the Micolube Decision (3 Judge; Delhi HC; discussed here). Given that few of you will partake in the herculean task of referring to the mentioned link, I shall briefly put across the thrust of the issue over here itself.
Can a Design Registrant Make a Claim of Passing Off?
It is quite well known that Passing Off is a claim in common law. It exists over and above the protection provided in statutes, such as the Designs Act. Why then does the issue arise at all?
So, under S. 27(2) of the TM Act (1999), the statute clearly states that the claim of passing off exists over and beyond the protection provided by it. Relying on the absence of such a provision under the Designs Act (2000), the earlier single judge ruling held that the absence indicates towards a lack of legislative intent to allow for a claim of passing off alongside a claim under the Design Act.
Fortunately, the 3 Judge bench decision overruled the aforementioned line of reasoning. Prof. Basheer, agreeing with the later decision, notes as follows:
“The single judge frames the issue incorrectly, namely, ‘whether there exists any remedy of passing off under the Design Act.’ Posed as such, the answer is easy to arrive at, for the Designs Act does not specifically provide for the remedy of passing off. Indeed, no design regime can ever be expected to provide for such a remedy, given that the aims of the two regimes are distinct. While the common law tort of passing off is intrinsically connected with trademark protection and aimed at preventing source related confusion in the minds of a consumer, the Designs Act protects aesthetically pleasing patterns, ornaments, and shapes capable of industrial application. “
Moving on the second question:
Can a Mark that has Gained TM Status Continue to be Granted Protection under Design law?
Again, we need to ask: Why does the question arise?
S. 19(1)(e) of the Designs Act provides for cancellation of a registered design on account of the mark not falling under the definition of “design” under S. 2 (which explicitly excludes TMs from the def. of “design“). Further given that S.22(3) allows for the prescribed grounds of cancellation under S. 19 to be grounds of defence in an infringement trial, the question as to the TM status of the mark can be used as a defence against a claim of design infringement.
The 3 Judge bench held that though a mark could not be registered as a “design“, if it had acquired TM status prior to application for design registration, there was nothing in the statute to prevent a registered design to continue being protected after attaining ability to distinguish products.
Prof. Basheer has suggested the reasoning to be problematic in the following words:
“The reference bench then goes on to problematically note that although a shape that qualified as a trademark could not be registered as a design (owing to the definition of “designs” in section 2 which excluded a “trademark”), a design once registered could begin functioning as a trademark. And when this situation came to pass, an IP owner could maintain a dual cause of action under both design law and trademark law (passing off).
Clause (e) clearly suggests that a design could be cancelled when it ceased to be a design. As per section 2 of the Designs Act, a design means “…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…..”
Clearly, this would mean that the moment a registered design began functioning as a trademark, it was no longer a “design” as understood by section 2. And was therefore liable to be cancelled under section 19.”
This has been the analysis put forth on the blog so far.
Finally, I shall wrap up with a few concerns I have and urge readers to shed some wisdom.
By way of interpretation of the statute, I feel Prof. Basheer has quite clearly established that the full bench’s reasoning was peculiar. Design law protects only “designs” and trade marks have been explicitly placed outside the ambit of “designs“. Therefore, one would be right in deducing that when both passing off and design infringement claims are made, only one should stand. But the court’s holding suggests otherwise.
Though I agree that the court’s analysis was problematic in terms of doctrinal rigour, I don’t really see it as being a problem in practice. Allow me to explain.
The problem with overlaps in intellectual property protection is that each type of IP regime exists for a distinct reason. To put it crudely,
i. Patents exist for incentivizing scientific research;
ii. Copyrights & design protection are for incentivizing various kinds of creative works and;
iii. Trade marks are for protecting consumer goodwill.
As a consequence of these purposes, the duration of time for which the corresponding IP is protected varies. While patents, copyrights and designs are only protected for a prescribed period of time, trade marks can theoretically be protected for eternity. The idea is to bring certain material into the public domain so that researchers and creators can build on them. In the case of trade marks, no such rationale exists and therefore, as long as they designate a particular origin without being functional/aesthetic, they are entitled for protection.
Therefore, it is problematic for designs, copyrightable material or patentable material to be protected under the garb of trade marks as that would lead to a situation that is antithetical to public policy (=greater research and creativity). That much is clear.
But, if we go by the 3 judge bench ruling and allow for registered designs that function as a TM to continue being giving protection under Design law, I don’t see any problematic effect in practice.
The opposite, of course, is problematic. By the “opposite“, I am referring to technical results or aesthetic works being protected under the trade mark regime. But such registrations are anyway restricted on account of S. 9(3) of the TM Act.
So, my query boils down to this:
While I can understand the rationale to the TM regime restricting registration of material that should be registered under the patent or design regime, what is the point behind other regimes excluding trade marks?
After I published the above piece, Prof. Basheer pointed out that the various IP regimes have varying standards for infringement. Therefore, it would be wrong to assume (as I did) that protection under TM law ensures the same quality (or standard) of protection as other regimes. Though in terms of duration of protection, the TM regime (theoretically) affords the greatest protection, it might be harder to establish infringement on account of the TM law standard for infringement (likelihood of confusion), as opposed to other regimes (e.g. substantial similarity).
Let us understand the above through a quick example.
There exist two product shapes: T and D.
T is a valid registered trade mark, while D is a valid registered design.
Further, there exist two allegedly infringing product shapes: TC and DC.
TC and DC are claimed to be allegedly similar to T and D respectively.
Now, for showing TC infringed T, one will have to show “likelihood of confusion“. So, even if the two marks are quite similar, the defendant can slip away by establishing a lack of likelihood of confusion between the products of both parties in the minds of the consumers.
But for showing DC infringed D, “substantial similarity” will have to be shown. Meaning, if the mark is similar, infringement would be deemed to have occurred.
Though the Design regime only protects the IP for a limited period of time, it seems to be providing greater protection. And therefore, one could argue that excluding TMs from the purview of Design regime would be in the public interest. Note that this argument exists over and above the doctrinal argument discussed in the initial part of this post.
The point of the last section was only to showcase one of the complications arising out of overlaps in IP regimes. I do not intend to take a stand on the issue withtout further research.