Delhi HC: Clearing the Confusion Around Design-Trademark Overlaps

A few days ago, I had written a post on the Delhi HC’s judgment in Greenlight Planet India Pvt. Ltd. vs Gee Lighting Technology dealing with a design-trademark overlap. The Court, in this order, had deliberated on the issue of whether a separate suit of passing off can be filed for a registered design after having filed a prior suit of design infringement. In their order, they limited their analysis to Order II, Rule 2 of the CPC (which does not allow one to file multiple suits for the same cause of action). Given the numerous past judicial decisions dealing with such overlaps, it is quite surprising that the Delhi HC omitted to consider the application of Order II, Rule 3 of the CPC (which allows for joinder of multiple causes of action in certain cases) and the relevant provisions of the Design Act and the Trade Marks Act.

Our readers then alerted us about the latest decision covering such overlaps: On 14th December, 2018, a 5-judge Bench of the Delhi HC reconsidered the maintainability of a composite suit filed for infringement of a registered design and for passing off. This question of law had  been referred to this Special Bench by a Single Judge in Carlsberg Breweries v. Som Distilleries.

About the Carlsberg Case

Carlsberg instituted a composite suit for design infringement and passing off of their “TURBO” beer bottles against Som Distilleries for manufacturing “HUNTER” beer bottles with numerous similar features.  The 2013 Micolube decision, wherein it was held that a composite suit for design infringement and passing off was not maintainable, was applied in this case and the Single Judge refused to grant an interim injunction to Carlsberg based on the same. The Court in Micolube had reached this conclusion by relying on the Supreme Court’s decision in Dabur India v. R. K. Industries.  In Carlsberg, the advocates representing Carlsberg quite rightly argued that such a reading of the Dabur case was erroneous and that the Micolube judgment was per incuriam. In the Dabur case, the Supreme Court had only disallowed joinder of different causes of action when the Court lacked the jurisdiction to entertain any one of the causes of action. For more clarity on this, check out how Prashant explained the jurisdiction aspect in his post analysing the Carlsberg decision:

“For example the jurisdiction clauses apply differently for trademarks and passing off because in the former case the plaintiff can sue at the place of his business, while in the latter case, the plaintiff can sue only where the defendant resides or where the cause of action arises. In such lawsuits, depending on the facts, the same court may lack the jurisdiction to hear the trademark infringement claim and the passing off claim and hence both cannot be combined into one lawsuit.”

The Judge also noted that the Court in Micolube may have failed to apply Order II, Rule 3 of the CPC and hence, the decision needed reconsideration by a larger Bench.

Maintainability of Composite Suits

After delving into past decisions, the Bench came to the conclusion that “there is no per se or threshold bar to maintainability of suits, on the perceived ground of misjoinder of causes of action“. The Court further went on to state that an objection to misjoinder of causes of action is merely procedural in nature and that it could not form the basis of a rejection of a suit.

The Bench also revisited the Dabur case and stated this: “Plainly, what the court had in mind was a situation dealing with joinder of causes of action, one of which could not be tried because the court lacked jurisdiction. That however, did not mean that per se the court had no jurisdiction to try a composite suit encompassing two causes of action.“

Further, it was contended that the cause of action for a design infringement significantly differed from that of passing off since lack of novelty has to be proven in the former and establishment of plaintiff’s goodwill and deceptive similarity of defendant’s products to those of plaintiff’s has to be proven in the latter. The Court noted in this regard that both these causes of action arise from the same fact i.e., “sale or offer for sale, by the defendant of the rival product“. Justice Valmiki Mehta’s opinion throws further clarity on this. He stated that since the two causes of action arise from the same transaction of sale, it would lead to common questions of law and fact and hence, would fall under the ambit of Order II, Rule 3. He further stated that joinder of causes of action “ought” to be done in these cases in order to avoid multiplicity of such proceedings.

The judgment is still not very clear, though. They justify the maintainability of composite suits filed for these remedies in a very reasoned manner. But does this necessarily mean that one still cannot file separate suits for the different remedies (as they did in the Greenlight case)? Or will such separate suits be disallowed under Rule 2 of Order II i.e., will the Court treat filing a later, separate suit as a relinquishment of part of the plaintiff’s claim in their previous suit? As I pointed out in the previous paragraph, the Court did not mandate parties to file composite suits and merely justified filing such suits for decreasing multiplicity. After all, these remedies are sought under different causes of action and parties may choose to not go for joinder of both causes in one suit. Such doubts, hence, need to be clarified by the Court in future decisions.

Does the Design Registration Still Subsist?

In analysing the decision of the Delhi HC in my previous post, I had raised the issue of whether the design registration still persists, given the fact that certain provisions of the Designs Act does not allow the registration of a design to continue once it starts functioning as a trademark (and this question had been previously raised by Prof. Basheer on SpicyIP right after the 2013 Micolube decision):

“The Bench did, however, err in its reasoning when it stated that a design once registered could become a functional trademark. The Court entirely based its reasoning on Section 19 in the Design Act which provides grounds for cancellation of designs and concluded that since the use of a registered design as a trademark is not given as one such ground, the product could be protected under both the IP regimes. But on a closer reading of the provision, Section 19(1)(e) provides that if it is not a design under Section 2(d), the registration of the said design can be cancelled. In his analysis of the 2013 decision, Prof. Basheer pointed out that the definition of design under Section 2(d) includes shape, configuration, pattern etc. 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“. He then concluded that the interpretation of Section 19 would require the cancellation of registration of design once it began functioning as a trademark. The question thus arises:  How can one claim remedy for passing off for a registered design?“

In considering the afore-mentioned provisions and issue, the Special Bench answered as following:

“…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.“

In a nutshell, we get two major takeaways from the latest Delhi HC decision:

1. A composite suit filed for design infringement and passing off is maintainable.
2. Remedy for passing off for a registered design can be brought if the said design is not functioning as a trademark and if the remedy of passing off is claimed for trade dress infringement or any other similar infringement.

Image from here