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TMI Blog2025 (4) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... t, whereby the 4th Additional District Judge at Vadodara's (Commercial Court) order dated 03.05.2024 allowing an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC) was set aside, and the Suit filed by Respondent No. 2 was restored to its original number (Impugned Judgement). 3. The parties to the appeal are, inter alia embroiled in a dispute concerning the purported infringement of intellectual property (IP) rights in relation to the designing and manufacturing of the internal parts of Cryogenic Storage Tanks and Distribution Systems which are mounted on Trailers and Semi-Trailers, to effectively transport industrial gases, liquified natural gas (LNG) and such like substances. A. FACTS 4. That being so, given the shared sequence of events underlying these two appeals, this presents an appropriate juncture for a detailed examination of the factual matrix. 4.1. The dispute between the parties arose when Respondent No. 1 in these appeals, Inox India Limited (Inox), filed Trademark Suit No. 3/2019 (Suit) before the Commercial Court against the Appellants, i.e. Cryogas Equipment Private Limited (Cryogas) and LNG Express India Private Limited (LNG Express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither by the copyright owner or any authorised licensee. Specifically, it contested Inox's claim of generating revenue amounting to Rupees 122 crores, arguing that such proceeds could only have been realised through the sale of Cryogenic Semi-trailers manufactured by an industrial process and using the Proprietary Engineering Drawings in excess of the stipulated threshold of fifty reproductions. In this context, LNG Express assailed that protection could not be sought under the Copyright Act by virtue of Section 15(2), and the Suit thus falls at the threshold. 4.5. The Commercial Court, on 01.04.2022, allowed the application filed by LNG Express under Order VII Rule 11 of the CPC, consequently rejecting Inox's plaint and its application for interim injunction. Inox filed two appeals before the High Court challenging the orders of the Commercial Court. On 13.03.2024, the High Court, through a common order set aside the Commercial Court's order, holding that it erred in allowing the application under Order VII Rule 11 of the CPC, which had led to the rejection of both the plaint and the prayer for interim injunction. The High Court remanded the matter to the Commercial Court for fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right Act, alleging that Cryogas and LNG Express had infringed its IP rights in both the artistic elements of the drawings and the literary components detailing the processes and descriptions therein. Inox further sought to restrain Cryogas and LNG Express from converting the two-dimensional industrial drawings of cryogenic Semi-trailers into three-dimensional representations. However, these pleas ought to be outrightly rejected as they have been raised as an afterthought to circumvent the applicability of Section 15(2) of the Copyright Act. Admittedly, Semi-trailers can only be manufactured through an industrial and mechanical process. (b) LNG and Cryogenic Semi-trailers worldwide are designed in accordance with international standard-setting bodies such as the American Society of Mechanical Engineers (ASME) and the Pressure Equipment Directive (PED). Given that these trailers are used for transporting cryogenic liquids, their design must comply with country-specific regulations, while international standards prescribe detailed guidelines on design parameters, material selection, and internal components. Accordingly, all relevant stakeholders, including the parties herein, adher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. (2024) SCC OnLine SC 3844 (g) Inox has erroneously asserted that the Proprietary Engineering Drawings are not capable of registration as 'designs' under Section 2(d) of the Designs Act on the ground that the products manufactured using these drawings lack visual appeal, as they pertain to the inner vessel of the Semi-trailer, which remains concealed. This claim ought to be rejected, as the drawings fall within the category of designs capable of registration under the Designs Act but have not been registered. Moreover, it is incorrect to suggest that the Semi-trailers lack visual appeal, given that the drawings also encompass the external shape and components of a Semi-trailer. In any case, the question of visual appeal is inherently subjective and cannot be a determinative factor for considering an application under Order VII Rule 11 of the CPC. (h) The scope of inquiry before the Commercial Court in the Suit is limited to determining whether the Proprietary Engineering Drawings are capable of registration under the Designs Act and, if they have not been so registered, whether they lose the protection of the Copyright Act once applied to articles through an industrial proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roprietary Engineering Drawings cannot be deemed capable of registration under the Designs Act. (c) The Literary Work in question is not subject to the bar under Section 15(2) of the Copyright Act. The Commercial Court erred in concluding that the Literary Work, including details, processes, and descriptions, is merely a reference to the Proprietary Engineering Drawings and the information contained therein. Such an interpretation incorrectly assumes that all the rights asserted in the plaint are intrinsically linked to the Proprietary Engineering Drawings. This approach is inconsistent with fundamental principles of copyright law, which recognise that each category of copyright protection is distinct and must be assessed independently. (d) The infringement arising from the theft of confidential information constitutes a distinct legal issue and is not subject to the limitations imposed by Section 15(2) of the Copyright Act. Courts have consistently recognised that confidential information is a separate legal concept possessing independent value, warranting protection under common law principles. Accordingly, the misappropriation of confidential information should be assessed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonance in the parties' interpretations of the applicability of the Designs Act, we deem it appropriate to adjudicate and analyse the following issues: i. 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? 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 CPC? E. ANALYSIS E.1 Issue No. 1: The parameters for determining whether a work or an article falls within the limitation set out in Section 15(2) of the Copyright Act 8. We may clarify at the very outset that the discussion herein would be limited to determining the distinction between a 'design' under the Designs Act and an 'artistic work' that might warrant copyright protection. To be precise, we are not, either expressly or implicitly, addressing the merits of the case. This examination has been prompted by the intrinsic disagreement posited by the parties in terms of the applicability of the Designs Act. Such a divergence in interpretation brings to lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork; (iv) a cinematograph film; and (v) a sound recording. To put it in more clear terms, the language employed in the provision reads as follows: "14. Meaning of Copyright-For the purposes of this Act, "copyright" means the exclusive right subject to the provisions of this Act, to do or authorise the doing of any of the following acts in respect of a work or any substantial part thereof, namely:- (a) in the case of a literary, dramatic or musical work, not being a computer programme,- (i) to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies already in circulation; (iii) to perform the work in public, or communicate it to the public; (iv) to make any cinematograph film or sound recording in respect of the work; (v) to make any translation of the work; (vi) to make any adaptation of the work; (vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in subclauses (i) to (vi); (b) in the case of a computer programme,- (i) to do any of the acts specified in Clause (a); (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in section 479 of the Indian Penal Code (45 of 1860) or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957 (14 of 1957)." This aspect of IP thus focuses on the utility of work, as well as its visual appeal and aesthetic, making it an important factor in determining consumer preference or commercial viability. 13. It must be borne in mind that Section 2(d) of the Design Act, reproduced above, expressly bars the inclusion of 'artistic works' encapsulated under Section 2(c) of the Copyright Act. To further illuminate, the expression 'artistic work' has been defined in the Copyright Act which reads as follows: "2. Interpretation.- In this Act, unless the context otherwise requires- .... (c) "artistic work" means,- (i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality; (ii) a work of architecture; and (iii) any other work of artistic craftsmanship;" 14. Despite the clear language employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted by Courts in India; (ii) the factors employed by courts in the United States of America (US); and (iii) broader international principles that provide guidance on the interplay between copyright and design protection. 19. By synthesising these perspectives, we aim to formulate a definitive test that will provide clarity on the scope of protection afforded under the respective Statutes. E.1.2.1 Approach adopted by Courts in India 20. The test applied by various High Courts in India to resolve the intersection between the Copyright Act and the Designs Act can be categorised into two distinct approaches: i. Interpretation of Section 15(2) of the Copyright Act: This involves pulling back the curtains on the overlaps or intersections between the two Statutes and ascertaining whether an article would qualify protection under the Copyright Act for being an 'original artistic work' or whether it would earn protection under the Designs Act. ii. Examination of the 'Functional Utility' of the Article: This requires an assessment as to whether the article serves a functional purpose beyond mere artistic expression. If the primary characteristic of the work is its functional uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lesser; (v) 'Artistic work' defined under Section 2(c) of the Copyright Act has been excluded from the definition of 'design' under Section 2(d) of the Designs Act to exclude for instance, works such as the painting of M.F. Hussain; (vi) It is apparent that it is the Designs Act which would give protection to the plaintiff in this case and not the Copyright Act, as the work in question cannot be labelled as an 'artistic work'. 24. The Delhi High Court followed and affirmed the ratio in Microfibres I (supra) in subsequent judgements, such as in Dart Industries Inc and another v. Techno Plast and others, 2007 SCC OnLine Del 892 where the controversy concerned the plaintiffs, who were manufactures of 'Tupperware' products, alleging that the defendants had infringed their copyright and design rights by producing strikingly similar products. The High Court held that no copyright protection would subsist once a design had been registered under the Design Act. That was a case concerning product drawings meant to create the ultimate product design, for which the copyright claim in the said drawings was rejected. 25. The High Court in this context further enunciated as follows: "44. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on registration of a design under the Designs Act, the copyright shall not subsist in that design and not in the drawings. Therefore, it is possible that when the moulded plastic article of novel shape is made from a working drawing, as in the instant case, the drawing may qualify as an original work entitled to copyright protection and, at the same time, a registered design for the shape of the article would be protected under the Designs Act. If an unauthorised copy is made of the article, it may constitute an indirect copy of the drawing and therefore may infringe the copyright." [Emphasis supplied] 26. Similarly, in Mattel, Inc v. Jayant Agarwalla, 2008 SCC Online Del 1059 the plaintiff Mattel alleged that the defendant had infringed their copyright by copying the design of their board game and creating an electronic game called 'Scrabulous'. Mattel further argued that all versions of their game, since 1932, qualified as 'artistic works' under Section 2(c) of the Copyright Act and were protected in India under the International Copyright Order, 1991. On the contrary, the defendant contended that Mattel's game board, being a three-dimensional article, could not be prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of Objects and Reasons of the Designs Act makes it clear that the legislative intent was to grant a higher protection to pure original artistic works such as paintings, sculptures etc and lesser protection to design activity which is commercial in nature. The legislative intent is, thus, clear that the protection accorded to a work which is commercial in nature is lesser than and not to be equated with the protection granted to a work of pure art. f. The original paintings/artistic works which may be used to industrially produce the designed article would continue to fall within the meaning of the artistic work defined under Section 2(c) of the Copyright Act, 1957 and would be entitled to the full period of copyright protection as evident from the definition of the design under Section 2(d) of the Designs Act. However, the intention of producing the artistic work is not relevant. g. This is precisely why the Legislature not only limited the protection by mandating that the copyright shall cease under the Copyright Act in a registered design but in addition, also deprived copyright protection to designs capable of being registered under the Designs Act, but not so regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible form or by use or in any other way prior to the filing date, or where applicable, the priority date of the application for registration then such design will not be registered or if it is found that it is not significantly distinguishable from known designs or combination of known designs, then such designs shall not be registered. It also provides that registration can be cancelled under Section 19 of the Act if proper application is filed before the competent authority i.e. the Controller that the design has been previously registered in India or published in India or in any other country prior to the date of registration, or that the design is not a new or original design or that the design is not registerable under this Act or that it is not a design as defined in Clause (d) of Section 2. The Controller after hearing both the parties if satisfied that the design is not new or original or that it has already been registered or if it is not registerable, cancel such registration and aggrieved against that order, appeal shall lie to the High Court. These prohibitions have been engrafted so as to protect the original person who has designed a new one by virtue of his own effor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be denied protection because that was not his object when he composed the design." [ Emphasis supplied ] 33. This decision was the first to draw a distinction in designs between 'features' and 'shapes' that were construed to be 'aesthetically appealing' to the eye of the consumer, in comparison to features that existed merely for 'purely functional purposes'. This demarcation based upon functional utility was further relied upon by the Judicial Committee of the Privy Council while interpreting the English Registered Designs Act, 1949, in Interlego A.G v. Tyco Industries Inc and others. [1988] UKPC 3. This line of distinction on the basis of features being eye-appealing or merely due to functional utility, as developed by English courts, has been subsequently employed by some of the High courts in India. 34. The Delhi High Court first addressed the issue of functional utility in Smithkline Beecham Plc. v. Hindustan Lever Ltd, 1999 SCC OnLine Del 965 where the plaintiff sought a declaration of ownership over toothbrush designs to prevent the defendants from infringing upon them. The Single Judge examined whether the 'S'-shaped design of the toothbrush was primarily functional o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f's claim for an injunction to restrain the defendant from infringing its copyright in artistic works, a Learned Single Judge succinctly held that : "29. What is that to which Section 15(2) refers? It speaks only of a 'design', and not an 'artistic work'. It has no application to the latter, but only to the former. Section 2(d) of the Designs Act makes this plain, for it excludes from the definition of design all 'artistic works'. Therefore, the Defendants' argument must necessarily be that the Plaintiff's drawings are not artistic works at all, but are designs. Following the Interlego decision, Mrs. Justice Dalvi held in Indiana Gratings that to be registrable under the Designs Act (even if not actually registered), the shape or configuration of the whole article is to be considered, for it is this of which a commercial monopoly is sought. The design and the article must, of necessity, be taken as a whole. If there is a part of it that is functional, that stands excluded from the definition of a design. The exclusionary intent extends only to that which has no appeal but describes or portrays purely functional features. If it does, it is not a 'design'. It may then enjoy copyrig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Mazer (supra) did not explicitly use the term 'conceptual separability', but that was seemingly the foundation to bifurcate an artistic expression from a utilitarian article. In fact, the position of law developed in Mazer (supra) was subsequently incorporated by the US Congress in the Copyright Act, 1976, which postulated that: "Pictorial, graphic, and sculptural works" include twodimensional and three-dimensional works of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans. Such works shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned; the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." "A "useful article" is an article having an intrinsic utilitarian function that is not merely to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 'Likelihood of Marketability Approach' wherein conceptual separability would exist if there is a substantial likelihood that even if the article had no utilitarian use, it would still be marketable to some significant segment of the community merely owing to its aesthetic qualities. Galiano v. Harrah's Operating Co., 416 F.3d 411, 419 (5th Cir. 2005). It thus seems that there was a time when multiple tests were applied by American Courts to determine the copyrightability of useful articles. 47. The US Supreme Court, resolved these inconsistencies finally in 2017, vide Star Athletica LLC v. Varsity Brands Inc, Star Athletica, L. L. C. v. Varsity Brands, Inc., 137 S. Ct. 1002, 197 L. Ed. 2d 354 (2017). by establishing a clear test for the protection of features incorporated into the design of a useful article. It held that to be eligible for copyright protection, the feature would have to: (i) be perceived as a two or three-dimensional work of art separate from the useful article; and (ii) it would qualify as a protectable pictorial, graphic or sculptural work, either on its own or fixed in some other tangible medium or expression, if it were imagined separately from the useful a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh their domestic laws. Notably, it does not elaborate on the overlap between design protection and copyright, leaving the matter largely to municipal legislation. 51. The most major development in the realm of multilateral treaties on IP rights, however, came with the adoption of the Agreement on Trade Related Aspects of Intellectual Property Rights, 1995 (TRIPS). TRIPS, 1869 U.N.T.S. 299 33 I.L.M. 1197. In comparison to the Paris Convention or the Berne Convention, TRIPS discusses 'industrial designs' in a far more comprehensive manner. Articles 25 and 26 of the TRIPS recognise that Members may employ the test of 'functional utility' to exclude designs that are built on technical or fundamental consideration and require a minimum protection duration of 10 years, a provision which is also reflected in the Designs Act in India. 52. The relevant provisions of TRIPS have been highlighted as follows: "Article 25 - Requirements for Protection : 1. Members shall provide for the protection of independently created industrial designs that are new or original. Members may provide that designs are not new or original if they do not significantly differ from known designs or combinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight 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. Further, the holder of such an artistic work is entitled to draw protection under Section 14(c) of the Copyright Act, including the exclusive right to reproduce such work in any material form. Such a reproduction may also involve depicting a three-dimension work of a twodimensional work or vice versa. 56. However, 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. 57. It thus seems that 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right 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. 61. 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. With this approach, we have attempted to clarify the treatment of works at the intersection of 'copyright' and 'design' law(s), thereby ensuring coherence and consistency in the application of IP rights in India. 62. We hasten to add that this Court has undertaken the task of clarifying the perceived complexities arising from Section 15(2) of the Copyright Act. In this context, we appreciate the efforts of High Courts across the country in adopting best practices that align with our socio-legal framework. Our analysis and examination have hopefully resolved this legal issue to prevent any further ambiguity in the future ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied beyond the threshold set in Section 15(2) of the Copyright Act. Given these intricate distinctions, a more detailed analysis is warranted, and such determinations cannot be made at the very threshold. (d) Even if the drawing in question is not classified as an original artistic work, it does not automatically qualify for protection under the Designs Act. In such cases, it must be assessed whether the dominant aspect of the design is functional or whether the design is registrable under the Designs Act, meaning that when applied to an article through an industrial process, the finished product must possess aesthetic appeal rather than being purely functional. (e) Section 15(2) of the Copyright Act serves as a limitation on the protection granted to artistic works under the Act. Allowing Inox's claim may result in a cascading effect, potentially allowing every tracing or drawing to receive copyright protection while simultaneously being industrially or commercially exploited through its application to an article. Such an outcome would likely contravene the intent of the Legislature. (f) Ultimately, the determination of whether the 'Proprietary Engineering Drawings' of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation 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. 68. We therefore concur with the High Court that this case warrants a trial given the triable issues involved. The plaintiff before the Commercial Court, i.e., Inox, was erroneously non-suited due to incorrect assumptions made by the Commercial Court which misread the plaint, misapplied legal principles and overlooked the distinction between 'artistic work' and 'design.' 69. In light of our discussion on relevant precedents and legal positions, and the clear test we have outlined, we direct the Commercial Court 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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