2025 (4) TMI 877 - SCH - Indian Laws

Copyright infringement - parameters for determining whether a work or an article falls within the limitation set out in Section 15(2) of the Copyright Act - setting aside the order of the Commercial Court and rejecting the application under Order VII Rule 11 of the CPC. What are the parameters for determining whether a work or an article falls within the limitation set out in Section 15(2) of the Copyright Act thereby classifying it as a design under Section 2(d) of the Designs Act? - HELD THAT - A two-pronged approach is formulated in order to crack open the conundrum caused by Section 15(2) of the Copyright Act so as to ascertain whether a work is qualified to be protected by the Designs Act. This test shall consider (i) whether the work in question is purely an artistic work entitled to protection under the Copyright Act or whether it is a design derived from such original artistic work and subjected to an industrial process based upon the language in Section 15(2) of the Copyright Act; (ii) if such a work does not qualify for copyright protection then the test of functional utility will have to be applied so as to determine its dominant purpose and then ascertain whether it would qualify for design protection under the Design Act. The courts while applying this test ought to undertake a casespecific inquiry guided by statutory provisions judicial precedents and comparative jurisprudence. It must be kept in mind that the overarching objective is to ensure that rights granted under either regime serve their intended purpose without unduly encroaching upon the domain of the other. Whether the High Court erred in setting aside the order of the Commercial Court and thus rejecting the application under Order VII Rule 11 of the CPC? - HELD THAT - The Commercial Court allowed LNG Express s application on the ground that the Proprietary Engineering Drawings qualified as a design under Section 2(d) of the Designs Act and therefore no suit for copyright infringement could be maintained in favour of Inox - However the High Court having disagreed with the finding of the Commercial Court initially remanded the matter for reconsideration. When the Commercial Court reiterated its earlier conclusion the High Court again intervened and rejected LNG Express s application with a direction to the Commercial Court to consider Inox s plea for an interim injunction under Order XXXIX Rules 1 and 2 of the CPC. The reasoning of the High Court is agreed upon that the question as to whether the original artistic work would fall within the meaning of design under the Designs Act cannot be answered while deciding an application under Order VII Rule 11 of the CPC. This stage would involve only a prima facie inquiry as to the disclosure of cause of action in the plaint. The question pertaining to ascertaining the true nature of the Proprietary Engineering Drawings involves a mixed question of law and fact and could not have been decided by the Commercial Court at a preliminary stage based upon such a casual appraisal of the plaint averments. The Commercial Court is directed to consider the issue afresh and conduct trial by adopting an Occam s Razor approach to ascertain the true nature of the Proprietary Engineering Drawings . Additionally the Commercial Court would also need to independently assess the claims related to infringement of the Literary Works confidential information know-how etc. so as to resolve the matter comprehensively. Conclusion - i) The decision of the High Court rejecting the application under Order VII Rule 11 of the CPC is upheld. ii) The Commercial Court is directed to deliver its decision on the pending application seeking interim injunction preferred by Inox within a period of two months. iii) The Commercial Court is further directed to conduct trial and discern the true nature of the Proprietary Engineering Drawings based upon the test laid down in paragraph 60 of this judgement as also the other related IP right infringements claimed by Inox within a period of one year given that it has already wasted significant judicial time on this issue. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

(i) What are the parameters for determining whether a work or article falls within the limitation set out in Section 15(2) of the Copyright Act, thereby classifying it as a 'design' under Section 2(d) of the Designs Act?

(ii) Whether the High Court erred in setting aside the order of the Commercial Court and thus rejecting the application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC)?

2. ISSUE-WISE DETAILED ANALYSIS

Issue No. 1: Parameters for determining classification under Section 15(2) of the Copyright Act

Relevant legal framework and precedents:

The Copyright Act, 1957, and the Designs Act, 2000, form the statutory framework governing the protection of intellectual property rights in artistic works and designs respectively. Section 15(1) of the Copyright Act states that copyright shall not subsist in a design registered under the Designs Act. Section 15(2) provides that copyright in any design capable of registration under the Designs Act, but not so registered, shall cease once the design has been applied to an article reproduced more than fifty times by an industrial process.

Section 2(c) of the Copyright Act defines 'artistic work' broadly to include paintings, sculptures, drawings, and other works of artistic craftsmanship, regardless of visual appeal. Section 2(d) of the Designs Act defines 'design' as features of shape, configuration, pattern, ornament, or composition of lines or colours applied to an article by an industrial process, judged solely by the eye, but excludes modes or principles of construction, mere mechanical devices, trademarks, and artistic works as defined in the Copyright Act.

Judicial precedents from Indian High Courts, including the Delhi High Court in Microfibres Inc v. Girdhar and its subsequent affirmations, have clarified that artistic works and designs occupy overlapping but distinct spheres. The courts have emphasized that the legislative intent is to accord longer protection to pure artistic works under the Copyright Act, while industrial designs receive limited protection under the Designs Act.

International jurisprudence, especially from the United States, employs the 'conceptual separability' standard to distinguish artistic features separable from utilitarian aspects of a useful article. The US Supreme Court in Star Athletica LLC v. Varsity Brands Inc established a uniform test requiring that the feature be perceived as a separate two- or three-dimensional work of art and capable of existing independently of the utilitarian aspects.

International treaties such as the Paris Convention, Berne Convention, and TRIPS Agreement provide overarching principles but leave the harmonization of design and copyright protection to domestic laws. TRIPS explicitly recognizes the exclusion of designs dictated essentially by technical or functional considerations.

Court's interpretation and reasoning:

The Court undertook a comprehensive analysis of the statutory provisions, judicial precedents, and international principles to bridge the gap in the intersection between copyright and design protection. It recognized that the expression 'artistic work' under the Copyright Act has a wide ambit, including works with or without visual appeal, and that copyright protection extends to reproductions in material form, including three-dimensional depictions of two-dimensional works and vice versa.

The Court emphasized that when an original artistic work is reproduced industrially to create a finished article with features appealing to the eye, those features constitute a 'design' under the Designs Act. The intent behind producing the artistic work is immaterial; the key consideration is whether the finished article appeals visually and is produced by an industrial process.

The Court adopted a two-pronged test: first, to ascertain whether the work is a pure artistic work entitled to copyright protection or a design derived from such work subjected to industrial application; second, if it does not qualify for copyright protection, to apply the 'functional utility' test to determine whether the dominant purpose is functional or aesthetic, thereby deciding eligibility for design protection.

The 'functional utility' test, drawn from English and Indian jurisprudence, excludes from design protection those features dictated solely by function without visual appeal. The Court cited decisions such as Amp v. Utilux and Interlego A.G v. Tyco Industries Inc to illustrate that a design must blend industrial efficiency with visual appeal to qualify for protection.

The Court noted that the test of functional utility remains integral to determining design protection in India, as reaffirmed by recent judgments.

Key evidence and findings:

The Court examined the nature of the Proprietary Engineering Drawings, which pertain to internal components of cryogenic semi-trailers. It recognized that these drawings may qualify as original artistic works under the Copyright Act but also acknowledged the possibility that their industrial application might render them designs under the Designs Act, subject to the conditions of Section 15(2).

The Court found that visual appeal is a necessary but subjective criterion for design registration and that the industrial process and extent of reproduction are relevant to the applicability of copyright protection.

Application of law to facts:

The Court clarified that the question whether the Proprietary Engineering Drawings qualify as designs under the Designs Act or artistic works under the Copyright Act cannot be conclusively answered at the threshold stage. It requires a full trial and evidence-based inquiry to determine the nature of the works and the extent of their industrial application.

Treatment of competing arguments:

The Court rejected the appellants' argument that the drawings were designs and thus barred from copyright protection under Section 15(2) as a matter of law at the preliminary stage. It also dismissed the contention that the drawings lacked visual appeal and could not be registered as designs, pointing out the subjectivity of visual appeal and the need for detailed examination.

Conversely, it accepted the respondents' position that the drawings are original artistic works and that the bar under Section 15(2) is not automatically triggered without proof of industrial application exceeding fifty reproductions. The Court also recognized the distinctness of literary works and confidential information claims, which are not barred by Section 15(2).

Issue No. 2: Whether the High Court erred in setting aside the Commercial Court's order allowing the application under Order VII Rule 11 of the CPC

Relevant legal framework and precedents:

Order VII Rule 11 of the CPC empowers courts to reject a plaint if it does not disclose a cause of action. The scope of inquiry at this stage is limited to a prima facie assessment of whether the plaint, taken at face value, discloses a legally sustainable cause of action without delving into complex factual or legal disputes.

Precedents establish that mixed questions of law and fact, especially those requiring detailed evidence, are unsuitable for summary rejection under Order VII Rule 11.

Court's interpretation and reasoning:

The Court agreed with the High Court's approach that the Commercial Court erred in allowing the application under Order VII Rule 11 to reject the plaint outright. It held that the determination of whether the Proprietary Engineering Drawings qualify as designs under the Designs Act or artistic works under the Copyright Act involves mixed questions of law and fact unsuitable for summary adjudication.

The Court noted that Section 15(2) of the Copyright Act requires an inquiry into whether the design has been applied industrially beyond the threshold, a fact-intensive question not resolvable at the threshold.

The Court emphasized that the plaint also contained claims related to literary works, confidential information, and know-how, which are distinct and not barred by Section 15(2). Therefore, the entire suit could not be rejected partially or wholly on the basis of the copyright claim alone.

The Court underscored that the role of the court at the Order VII Rule 11 stage is to assess whether any cause of action is disclosed, not to evaluate the strength or likelihood of success of the claim.

Key evidence and findings:

The Court relied on the plaint's averments asserting copyright in the Proprietary Engineering Drawings and Literary Works, as well as claims of misappropriation of confidential information. It noted the existence of factual disputes, including the extent of industrial reproduction and registration status, necessitating trial.

Application of law to facts:

Given the factual disputes and mixed legal questions, the Court held that the plaint disclosed a cause of action and was not liable to be rejected summarily. The matter requires trial and evidence-based adjudication.

Treatment of competing arguments:

The Court rejected the appellants' argument that the plaint was barred under Section 15(2) and thus liable for rejection. It also dismissed the contention that the Commercial Court's order was correct based on a prima facie reading of the plaint. The Court found that such a conclusion was premature and legally unsustainable.

3. SIGNIFICANT HOLDINGS

"The expression 'artistic work' under Section 2(c) of the Copyright Act has a very wide connotation and may also include abstract work(s) comprising a few lines or curves arbitrarily drawn, which could be either two or three-dimensional. It may be clarified that such a work may or may not have any visual appeal."

"If such reproduction is done by employing an industrial process, which may be manual, mechanical or chemical, and which results in a finished article that may appeal to the eye, then 'the features of shape, configuration, pattern, ornament or composition of lines or colours applied to the article by such an industrial process', constitutes 'design' within the meaning of Section 2(d) of the Designs Act."

"The intent of producing an original artistic work is not determinative of its protection under the Copyright or Designs Regime. Rather, the legislative intent is to harmonise the two Statutes so that while an 'artistic work' qualifies for copyright protection, its commercial or industrial application-i.e., the 'design' derived from the original work for industrial production-is subject to the limitations set out in Section 15(2) of the Copyright Act."

"The courts, while applying this test, ought to undertake a case-specific inquiry guided by statutory provisions, judicial precedents, and comparative jurisprudence. It must be kept in mind that the overarching objective is to ensure that rights granted under either regime serve their intended purpose without unduly encroaching upon the domain of the other."

"The determination of whether the original artistic work would fall within the meaning of 'design' under the Designs Act cannot be answered while deciding an application under Order VII Rule 11 of the CPC. This stage would involve only a prima facie inquiry as to the disclosure of cause of action in the plaint."

"Order VII Rule 11(a) of the CPC empowers a court to reject a plaint if the plaintiff fails to disclose a cause of action. In determining this, the court is not required to delve into complex legal questions but must simply assess whether the allegations, if taken as true, establish a cause of action without evaluating the likelihood of success."

"Even if the claim for copyright infringement is deemed untenable, the Suit would still be maintainable with respect to the other rights asserted. As a result, the entire Suit must proceed to trial, since a plaint cannot be partially rejected."

Final determinations on each issue:

(i) The Court established a definitive two-pronged test to distinguish between copyright protection and design protection in cases involving works at the intersection of the Copyright Act and the Designs Act. This test involves first determining whether the work is a pure artistic work or a design derived and industrially applied, and second, applying the functional utility test to assess eligibility for design protection.

(ii) The Court upheld the High Court's decision setting aside the Commercial Court's order that allowed the application under Order VII Rule 11 of the CPC, holding that the plaint disclosed a cause of action and that the matter requires trial for full adjudication.

(iii) The Court directed the Commercial Court to conduct trial on the merits, including the nature of the Proprietary Engineering Drawings and related claims of infringement of literary works, confidential information, and know-how, applying the outlined legal tests.