2022 (11) TMI 36 - HC - Indian Laws

Grant for interim injunction under Order XXXIX Rules 1 2 of the Code of Civil Procedure, 1908 rejected - Order XXXIX Rule 4 of the CPC - Claim for right to the exclusive use of the colours or the colour combination appearing in the Subject Design not made - third-party products available in the market, similar to subject design - novelty in respect of the combination of colours and the placement of the label indicating the maximum retail price (MRP) - registration of the Subject Design did not include any such claim of novelty - whether the Subject Design lacked novelty and originality? Whether registration of the Subject Design is proscribed under Section 4(a) and 4(c) of the Designs Act? HELD THAT - It is not unusual for small players to copy designs, which have become popular. It is not necessary for the proprietor of a design to pursue its remedies against each dealer/manufacturer selling infringing products. It is possible that the benefits of pursuing a particular infringer may not be commensurate with the cost and effort for doing so. It is understandable that a design holder would evaluate its options including on commercial considerations - The rights of a proprietor of a registered design is not diluted merely because there are multiple infringers; the design holder retains the right to interdict infringement of the registered design notwithstanding that it has not proceeded against some of the infringers. This Court is unable to accept that a finding that the Subject Design lacked novelty and originality which necessarily was required to be determined with reference to the date when the Subject Design was registered could be arrived on the basis of the market survey without any evidence as to when the said products were introduced in the markets by their respective sellers. In terms of Section 4 of the Designs Act, a design, which is not new or novel or has been disclosed prior to registration or is otherwise not significantly indistinguishable from a known design or a combination of designs thereof, cannot be registered. For a design to be registered, it must be original and novel; not disclosed in any manner prior to registration; and it should be significantly distinguishable from a known design or a combination of known designs. Thus, a mere trade variant, which is a combination of known designs, would not be entitled to protection under the provisions of the Designs Act - Indisputably, if a design is not significantly distinguishable from a known design or combination of designs, it cannot be registered by virtue of Section 4(c) of the Designs Act. However, the market survey conducted by the parties would neither answer the question whether the Subject Design was original or novel at the time of registration, nor assist in determining whether the Subject Design was significantly distinguishable from the known designs at the time of registration of the Subject Design. The conclusion of the learned Single Judge is not based on the findings that the Subject Design is indistinguishable from designs that were known at the time of the registration. It is based on the, prima facie, opinion that there are products with similar designs currently available in the market. Thus the prima facie conclusion of the learned Single Judge is not well founded. Appeal allowed.

Issues Involved:
1. Novelty and originality of the Subject Design.
2. Relevance and implications of the market survey.
3. Application of trademark law concepts to design infringement.
4. Evidentiary value of third-party letters and affidavits.
5. Availability of similar designs in the public domain prior to registration.
6. Determination of whether the Subject Design is merely a trade variant.

Issue-wise Detailed Analysis:

1. Novelty and Originality of the Subject Design:
Relaxo Footwears Limited (Relaxo) claimed that its design, registered under the Designs Act, 2000, was novel and unique, particularly in its shape, configuration, and surface pattern. The learned Single Judge, however, found that the Subject Design lacked novelty and originality, based on the presence of similar third-party products in the market and a letter from a Chinese manufacturer indicating that similar designs had been in use for several years. The High Court disagreed, stating that the novelty and originality should be assessed based on the design's status at the time of registration, not on subsequent market surveys or third-party claims.

2. Relevance and Implications of the Market Survey:
The Single Judge had directed a market survey to ascertain the availability of similar products, which indicated the presence of third-party products resembling the Subject Design. The High Court found merit in Relaxo's contention that the market survey was not relevant for determining the novelty and originality of the design at the time of registration. The High Court emphasized that the market survey results could not establish whether the Subject Design lacked novelty and originality when it was registered.

3. Application of Trademark Law Concepts to Design Infringement:
Relaxo argued that the Single Judge erroneously applied concepts from trademark law, such as "common to trade," to design infringement cases. The High Court agreed, noting that the concept of a design being "common to trade" is not applicable under the Designs Act. The Act requires that a design must be original and novel, and not significantly indistinguishable from known designs at the time of registration.

4. Evidentiary Value of Third-Party Letters and Affidavits:
The Single Judge relied on a letter from a Chinese manufacturer claiming the design's elements had been in use for several years. The High Court found this reliance misplaced, as Relaxo had not claimed novelty in the strap design mentioned in the letter. The Court also noted that such letters or affidavits, without further evidence, have limited evidentiary value in determining the design's novelty and originality.

5. Availability of Similar Designs in the Public Domain Prior to Registration:
Aqualite argued that similar designs were available on websites like Amazon before Relaxo's design registration. The High Court examined the evidence and found that the products cited by Aqualite did not appear identical to the Subject Design. Moreover, Aqualite needed to establish that these products were available for sale before the registration date, which it failed to do convincingly.

6. Determination of Whether the Subject Design is Merely a Trade Variant:
Aqualite contended that the Subject Design was merely a trade variant and not registrable under the Designs Act. The High Court referred to the Crocs Inc USA v. Bata India Ltd case but clarified that footwear designs could still be novel and original despite design constraints. The Court concluded that Aqualite did not provide sufficient evidence to prove that the Subject Design was indistinguishable from known designs or combinations thereof.

Conclusion:
The High Court set aside the impugned judgment, restraining Aqualite from manufacturing, selling, or dealing with products infringing the Subject Design until the disposal of the suit. The Court emphasized that the determination of a design's novelty and originality should be based on its status at the time of registration, not on subsequent market conditions or third-party claims.

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