India: Delhi High Court clarifies on what is new and original under the Designs Act

Source: www.delhihighcourt.nic.in

Design is that aesthetic feature which adds the exclusive quality to the product. Any product can become visually appealing through its design. This is exactly what the Designs Act, 2000 (hereinafter referred to as ‘the Act’) protects i.e. the aesthetic appearance. Designs, as defined by the Act, is the ‘features of shape, configuration, pattern, ornament or composition of lines or colors applied to any article in two or three-dimensional form, or both, by any industrial process or means – whether manual, mechanical or chemical, separate or combined – which in the finished article appeal to and are judged solely by the eye’. The Act also lays down the necessary parameters that are requisite conditions for a design to be registered under the Act. The very first and foremost condition is that the design should be new or original, not previously published or used in any country before the date of application for registration. Focusing on this criterion, recently, the Delhi High Court its judgement, in the case of Crocs Inc. Usa V Liberty Shoes Ltd. & Ors., on February 8, 2018, cancelled the registered design of Crocs Inc. USA and dismissed the claim of piracy of design made by the Company. The Court held that, ‘it is necessary for protection of a registered design that the registered design must be an Intellectual Property Right created after application of sufficient time, labor, effort, etc. and that there must be sufficient newness or originality i.e. existence of requisite innovation and that trade variations of known designs cannot result in newness and originality.’

Brief Background

• Crocs Inc. USA (hereinafter referred to as ‘the Plaintiff’) are proprietors of certain registered designs related to footwear in India. The registered design in issue in the case bear registration numbers 197685 and 198786. The tabular representation of the designs are given below -

• In the plaint, the Plaintiff stated that Liberty Shoes Ltd. and others (hereinafter referred to as ‘the Defendants’) has been violating the rights of the Plaintiff by imitating its registered design shown above. It claimed piracy of design under Section 22 of the Act.
• The Plaintiff filed a suit for permanent injunction against all the Defendants from manufacturing, marketing, supplying, using, selling, soliciting, exporting, displaying, advertising by any other mode or manner the impugned design or any other design which is deceptively similar to or is a fraudulent and/or any obvious imitation of the Plaintiff ‘s design.
• The Plaintiff also filed interim applications seeking pendente lite restraint against the Defendants from manufacturing, marketing, supplying, selling etc. the footwear of the Defendants which footwear as per the Plaintiff have been manufactured and sold by infringing the registered designs of the Plaintiff.
• The Defendants challenged the interim injunction application.

Issues

1. Whether the registered designs, of the Plaintiff, lacked novelty and originality?
2. Whether the registered designs existed in public domain prior to the registration being granted in favor of the Plaintiff?
3. Whether the Defendants are guilty of piracy of designs? 

Plaintiff’s Contentions

• The Plaintiff alleged that the footwear manufactured by the Defendants were more or less same or similar, with color variations or other changes with respect to placements of the perforations/open spaces/holes in the footwear or certain other aspects for creating visual appeal.
• With regard to the website evidence filed by the Defendant in pursuance of issue no. 2, it argued that depiction in the website is no guarantee that depiction of the footwear in question in fact took place as on December 10, 2002, as stated in the printouts downloaded and filed by the Defendants.
• The Plaintiff contended that once the registration is done, there must be a presumption of newness and originality and the onus should be on the Defendant to prove that there is no newness or originality.

Defendant’s Contentions

• They contended that the registration of design with respect to footwear is in itself invalid. Taking defence under Section 22 (4) of the Act, they argued that since the registration of the design granted to the Plaintiff is not valid, hence no case could be made out of piracy of the registered design of the Plaintiff.
• They further claimed that the registered design of the Plaintiff’s when registered lacked any newness/originality. The design was in public domain at the time of registration.
• To prove issue no. 2, the Defendants produced the internet-downloaded pages from the website of the company ‘Holey Soles’, the footwear designs of which were similar to that of the Plaintiff. The designs on the page were stated to be archived on the page since December 12, 2002. The 'Holey' in the 'Holey Soles' is because of holes/spaces/gaps existing in the footwear of this company.
• It was submitted that the registration date granted to Plaintiff in India was May 28, 2004. Since, the design of the footwear of the Plaintiff was found in the public domain since 2002, therefore, the registration granted to the Plaintiff was clearly faulty and liable to be cancelled under Section 19 of the Act.

Court’s Decision

• The Court analyzed Sections 2 (d), 4, 19 and 22 of the Act.
• Regarding issue no. 1, the Court went on to evaluate the meaning of a design being new or original. The Court revisited its judgement in Pentel Kabushiki Kaisha & Anr. Vs. M/S Arora Stationers & Ors., and held that mere variations to existing products which do not result in requisite amount of newness or originality cannot be considered as innovations having newness and originality for being granted monopoly for fifteen years.
• Further adducing the test of newness and originality, the Court held that it is necessary for protection of a registered design that the registered design must be an Intellectual Property Right created after application of sufficient time, labor, effort, etc. and that there must be sufficient newness or originality i.e. existence of requisite innovation and that trade variations of known designs cannot result in newness and originality.
• Dealing with issue no. 2, the Court reiterated that according to Section 19 of the Act a design, which existed in the public domain prior to grant of registration under the Act, is a ground for cancellation of the design. Rejecting the contentions of the Plaintiff, the Court prima facie accepted that such design existed in public domain prior to Plaintiff's registration, the Plaintiff therefore, cannot claim exclusivity for its registered design merely on the ground that Plaintiff ‘s footwear/registrations does have a strap at the back of its footwear.    
• The Court opined that in cases where the registered design is associated with something so common to human lifestyle, for example in this case footwear, the bar of newness and originality automatically increases. It said that it requires an effort larger than an ordinary effort to create a different footwear than the known types of footwear, to be an innovation/creation having such requisite newness and originality for that creation to become an Intellectual Property Right as a design in terms of the Designs Act.
• In the present case, in Court’s view the design of Plaintiff’s footwear is nothing but a sandal. Sandal with open spaces are only trade variations of a sandal. Trade variations of footwear/sandals cannot be and should not be given exclusive monopoly. In addition, the features which were argued on behalf of the Plaintiff, as existing in its sandals/footwear of mounds or humps or straps (or lack of them) or soles designs or perforations/open spaces etc., even when taken as a whole, or even individually for that matter, cannot be said to result in innovation or creation of newness or originality.
• The Court also assessed the claim of cost payable to the Defendants. Taking into consideration the Commercial Courts Act, 2015, read with Section 35 of the Code of Civil Procedure, the Court held that ‘the Court had the power to order costs at the interim stage, and that, in this case, the Plaintiff, in refusing to settle the interim applications with the Defendants, and ‘obdurately and illegally continuing proceedings’, and imposed costs of a whopping INR 2 lakhs per Defendant, in addition to legal costs’.