Overlap of passing off and infringing registered design

By J Sai Deepak and Suvarna Mandal, Saikrishna & Associates
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India’s intellectual property framework includes statutory protection for designs under the Designs Act, 2000, which grants a monopoly right akin to patent rights. Since India does not recognize statutory rights in unregistered designs, the interplay between registered design rights and the common law tort of passing off raises interesting issues. One such issue is whether a passing off action, which in essence is based on misrepresentation and deceit, would be available in the context of a registered design, either existing or expired.

High court views

In Tobu Enterprises Pvt Ltd v Megha Enterprises and Anr (1983), Delhi High Court held that the statutory remedy for design infringement had the effect of excluding the common law remedy. The owner of a registered design could not simultaneously pursue a passing off action and was required to elect between the two.

J_Sai_Deepak_-_Saikrishna_&_AssociatesIn support of this ratio, the court compared the Designs Act then in force with section 27 of the Trade and Merchandise Marks Act, 1958, to point to the former’s lack of a savings clause which preserved an action for passing off. Support could also be drawn from section 16 of the Copyright Act, 1957, which excludes any right similar to a copyright outside the framework of the act.

However, in a decision in 2002, in Smithkline Beecham Consumer Healthcare GMBH and Ors v GD Rathore and Ors, Delhi High Court held that infringement and passing off being two distinct remedies, there is no bar to invoking both. The court noted that exclusion of a passing claim would allow unscrupulous manufacturers to deceive customers by passing off their products as those of a registered design owner.

Importantly, this view was taken after considering the view taken in Tobu Enterprises. Similarly, in Gorbatschow Wodka KG v John Distilleries Ltd (2011), Bombay High Court upheld the passing off claim despite the existence of a registered design since the plaintiff had established that the bottle shape in question had acquired a reputation and goodwill worth protecting.

Three-judge bench

In a decision that will bind future Delhi courts, a three-judge bench of Delhi High Court again considered this issue in Micolube India Limited v Rakesh Kumar Trading as Saurabh Industries & Ors (2013). The majority held that a holder of a registered design could institute an action for passing off and upheld the fundamental principle that in order to institute a suit the right does not need to be rooted in a statute.

However, the court took the view that separate suits were required for infringement of registered design and passing off, though the court could exercise its discretion to try the two suits together if they were filed in close proximity and/or shared common aspects.

Suvarna Mandal
Suvarna Mandal

The court concluded that: (a) a holder of a registered design can institute a suit against a defendant that is also in possession of a registered design; (b) a holder of a registered design can institute an action for passing off; (c) the two actions cannot be combined in one suit.

In his dissenting opinion, Justice Manmohan Singh held that due to the distinct nature of the two rights, the legislature did not intend to extend the monopoly granted under the Designs Act by allowing a remedy of passing off after the expiration of the design registration, as that would give the manufacturer undue advantage and lead to overprotection of the design. He also observed that when there exists a valid and subsisting design registration, the owner has to elect between the statutory and common law remedies, which is in line with the view of the court in Tobu Enterprises.

Rule ignored

The majority and the minority concurred that a single composite suit for infringement of a registered design and for passing off of the design is not maintainable.

However, in analysing the issue of a composite suit, the court ought to have had regard to order 2, rule 3 of the Code of Civil Procedure, 1908 (CPC), which provides for “joinder” of multiple causes of action in the same suit provided they arise from the same act or series of acts and provided both causes of action fall within the territorial jurisdiction of the court.

The provision for joinder to prevent multiplicity of litigation is a running theme of the CPC. Unfortunately, this provision finds no mention in the Micolube decision. That said, a court in a subsequent case could differ with the Micolube decision on grounds that to the extent the decision did not refer to order 2, rule 3, it is per incuriam. It remains to be seen if such a position will be adopted in a future case.

J Sai Deepak is a senior associate at Saikrishna & Associates, where Suvarna Mandal is an associate. The views expressed in this article are personal.

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