27 May 2013

Passing off in designs and infringement by registered design holder

A Larger Bench of Delhi High Court has, on 15th May, 2013, held by majority that a holder of a registered design can institute an action for passing off and that he can institute a suit against  a person who is also in possession of a registered design. The dissenting opinion records that the rights and remedies under Designs Act, 2000 (the Designs Act) are statutory in nature and common law remedy cannot be sought. Parties to the suit were registered proprietors of designs. Questions arose as to whether there can be suit for infringement by another registered holder on another, passing off and whether both remedies can be pursued simultaneously.


"Any person" in the Designs Act not excludes subsequent registrant 

The majority held that one registered design holder can sue the other since the assertion in the suit is the right of monopoly based on the uniqueness, newness and the originality of his design qua the defendant registrant. Unlike in trademark or patents, no procedure has been prescribed for prior publication of an application made seeking registration of a design, followed by any request for entertaining an opposition to such an application for registration. The certificate of registration is only a proof that it does not fall foul of Section 4 of Designs Act in that it is new, not prior published, scandalous or obscene. It only creates a rebuttable presumption that it fulfils adoption of all procedural safeguards which are required to be taken.   

The court further held that a plaintiff is entitled to approach the court and plead that his registered design is unique and that the defendant registrant (in a case where he has a registration in his favour as against one who applies an unregistered design to articles in the class of articles qua which registration has been obtained) has obtained registration which is neither new nor significantly distinguishable when compared to the plaintiff's registered design.  

The minority opinion however, states that the words used are ‘During the existence of copyright in any design it shall not be lawful for any person’ and the section refers to “registered proprietor” and “any person” within the same section. Thus, a registered proprietor stands at par with every other registered proprietor and there can be no suit against another as both are conferred with the copyright as per Section 11 of the Designs Act whether rightly or wrongly. 


Designs Act and common law remedy

The Designs Act does not expressly provide for remedy against passing off as is provided in the Trademarks Act, 1999. The minority opinion states that this evidences the scheme of legislature and intent in not providing more than the limited period of monopoly rights – 10 years and additional 5 years after which the design passes into public domain. Even when amendments were made the Designs Act  in  2000, the provisions did not include common law remedy. It further holds that in a limited manner, the remedy of passing off would be available to prevent consumer confusion which may be caused by the use of trade mark, get up, trade dress or in any other manner excepting the shape of the goods which is subject matter of registration of design.  

It was held by the majority that passing off action can be based on a plea that the design, which is an unregistered mark, was being used for the purposes of business, enjoyed goodwill and was identified by the consumers as belonging to the claimant. It held that though a person did not have statutory rights under Designs Act, he could still seek to remedy wrongs, like the user of an unregistered trademark, who is not denied protection under Trademarks Act. There cannot be simultaneous registration as a design and a trademark as per Section 2(d) of the Designs Act. But, post registration, there is no limitation on use of a design as a trademark. 


Simultaneous pursuit of remedies  

The majority opined that a composite suit for infringement of a registered design and a passing off action would not lie though if the suits are filed in close proximity, the Court, at its discretion may try them together. According to minority opinion, remedy of passing off under the Trademarks Act is available in the alternative to design right conferred by the Designs Act and the suitor has to elect between the two inconsistent rights.


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