A special bench of five judges of Delhi High Court in its judgment in Carlsberg Breweries v Som Distilleries and Breweries Limited held that a composite suit that joins two causes of action – one for infringement of a registered design and the other for passing off – is maintainable.
This overrules the judgment of the three-judge bench of Delhi High Court in Mohan Lal v Sona Paint (2013), where it was held that these two actions cannot be combined in one suit. The majority view in this case was that the cause of action for a suit for infringement of a registered design is different from the cause of action on which a claim of passing off is premised and therefore two separate suits have to be filed.
In the Mohan Lal case, the reasoning was that a design infringement suit would be for the claim of monopoly based on registration, which is premised on uniqueness, newness and originality of the design while an action for passing off is founded on the use of the mark in the trade for sale of goods and for offering services, generation of reputation and goodwill, association of the mark to the plaintiff's goods and the misrepresentation sought to be created by the defendant by the use of the plaintiff's mark.
The special bench has observed that there is a factual overlap in both claims with respect to the presentation of the goods by the defendant as in order to establish infringement of a design, fraudulent imitation of the article by the defendant has to be proved, and to show passing off, it is necessary to establish that the defendant has misrepresented to the public (irrespective of intent) that its goods are that of the plaintiff.
As the definition of design excludes a trademark and for it to be a valid design it cannot be a trademark, the court also took a dichotomous view that the issue of presentation of the goods is one of a larger trade get up and not of a trademark in its stricter meaning, which otherwise precludes a design right. According to the court, to claim a design right, the subject matter must not be used as a trademark in its stricter meaning but may constitute the larger trade appearance of the goods in question which, in turn, could give rise to a passing off claim.
The court also noted that similar to a passing off action, a design infringement suit has to be instituted in a jurisdiction where the defendant is located. Consequently, a composite suit should be maintainable in the same cause of action against the same defendants, and the jurisdiction shown by the plaintiff on one cause of action, would be sufficient for the other.
The court, while interpreting the Supreme Court judgments of Dabur India Ltd v KR Industries (2008) and Dhodha House v SK Maingi (2006), observed that these judgments had not held that the court has no jurisdiction to try a composite suit encompassing two causes of action. The provisions of order II rule 3 of the Code of Civil Procedure entitle the court to entertain a composite suit and the only exception to this rule would be that the jurisdiction in respect of one cause of action is lacking.
The court also noted that in this case the actions for passing off and design infringement emanate from the same fact, the sale or offer for sale by the defendant of the rival products. The act of sale of the rival products impelled the plaintiff to approach the court for design infringement as well as passing off. The court noted that if such a situation arises then the cause of action cannot be "split". A composite suit gives a bird's eye view with respect to a common set of facts. In cases where the claim for design infringement is prima facie weak and the plaintiff cannot secure relief, the same court can still provide relief if on the basis of the same facts and evidence, a prima facie case for passing off is made out.
Justice Valmiki Mehta agreeing with the rest of the judges also delivered a separate opinion. He observed that since the sale of products by the defendant would be in question in both causes of action, a substantial part of the facts of the two actions would be the same as to whether the article being sold by the defendant of a particular design is or is not a fraudulent or obvious imitation of the article of the plaintiff. Thus, it was held that to a considerable extent, the evidence of the two causes of action would be common and therefore, in order to avoid multiplicity of proceedings, a joinder of the two causes of action should take place.
While the court's intent is understandable, what may have been overlooked in taking a dichotomous view on the larger trade get up is that if the most distinctive feature of the trade appearance is the design element then the claim of passing off may not survive if the design elements are taken away.
Originally published by India Business Law Journal
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