Crocs Inc. USA v. Bata India Ltd and Ors.

Introduction

Hundreds and Thousands of cases are filed in courts for Intellectual Property and mainly on industrial design.  Industrial design or design patent is a type of intellectual property right that give exclusive right to the owner of the article to sell and protect the design. All these are embodied in Design Act of 2000 and these can be protected for a period of 10 years. If you see your rights are infringed you can raise the matter in court. Some cases are easy and straightforward issues but some needs a complete ramification. One such case is Crocs Inc. USA v. Bata India Ltd and Ors.

Facts of the case

  • Crocs had filed a suit against Bata India Ltd., Liberty Shoes Ltd., Action Shoes Pvt. Ltd.,   Aqualite India Ltd.,Bio World Merchandising India Ltd., RelaxoFootware Ltd., And Kidz Palace[1]. Crocs file a case for permanent injunction seeking to stop all the other manufactures from making the design of appellant footwear. The designs are related holed and non-holed shoe design. All these footwear manufactures for supposedly adopting and copying the registered design No. 197685 which is valid up to 28.05.2019 of clog- type slippers sold by Crocs .Cases were filed in different lower courts against different manufacturers and Delhi high court seeing the same interest clubbed all the cases pending in the court and heard it together.
  • Crocs Inc. USA had started to file suits against major players of the footwear in India when they were informed of the same. The Plaintiff asked for interim judgement and the defendant contended that suit is not maintainable in the light of the pronouncements of the Five Judge Bench of this Court in Carlsberg Breweries A/S vs. SomDistilleries and Breweries[2]. Plaintiff pleaded that that the design of its footwear can be used as a trademark, under the Trade Marks Act, 1999.
  • The Defendants opposed with the argument that trademark cannot be used as a design under Design Act, 2000.

Issues of the case:

Since the case is all about design this raises few issues in the case:

1.Whether the plaintiffs design was in the public domain prior to registration or not?

2.Whether the design of the plaintiff footwear was new, unique and original.

3. Whether the registered design constitute a trademark.  

4.Whether a Design can function as trademark or not?

Rules applied:

  1. Section 2(d) of the Designs Act
  2. Section 22 of the Designs Act, 2000
  3. Trade Marks Act, 1999
  4. Cancellation of registration

Analysis of case:

The above discussed case has set a new standard when it comes to dealing with design of a new product. In design of suit, Crocs failed to succeed in the account of “prior publication of the design”. Even though plaintiff had prior registered its designs in different countries .That did not give it any advantage in India to the Plaintiff. It was argued that the finding of prior publication did not stop it from seeking relief on the ground of passing off. [3]The concept of backdoor ever greening, was taken into consideration by the court. And it was observed that when a registered design is also protected as a trademark, it would allow an owner to enforce its rights in a subject design even if the designation for the offense is followed by the expiration of the registration – thus defeating the legislative intent to introduce a specific statute of design law.

The fact that this statute restricted the period of design registrationmeant that a registered design could not qualify for protection under the common law of passing off. It highlighted the applicability of the “principle of election”, under which a design’s owner must choose to either protect the rights of registration under the design law or enforce common law rights under trademark law. In India,The Indian Designs Act, like the Indian Patents Act, provides legal protection for a limited period: registration of designs is for a 15-year period, after which they fall into the public domain.

The Plaintiff argued that the registered design was used by in one or the other way by the defendants. But the defendants argued that piracy and infringement of the design never occurred.Passing off action are claimed on elements of the design as a trade mark, no passing off action lies. The court also agreed with the Defendant that the plaintiff has not been able to show any extra features, in addition to the design, which is used as a trade mark.

Crocs claimed passing off rights over its registered design and not on any other feature, the suits were dismissed as not maintainable. The court imposed a hefty fine on the plaintiffs. They were asked to compensate the defendants with 2 Lakh Rupees over and above the legal cost. It was to make the plaintiff realize the harm they have caused when defendants suffered losses during injunction period.

Conclusion:

The Court thoroughly examined the statutory provisions of the Design Act, the Trade Marks Act, the common law principles of passing-off and judicial precedents, including the Mohan Lal Case[4] and the Carlsberg Case.The court came to a conclusion that there was no ‘newness’ and ‘originality’because the design were available from 2002 and 2003 so the registration was not valid .The judgement give a sigh of relief to small and local companies who were hampered by multi-national corporations who use their power to get injections. Due to which all these companied suffer losses.

The judgement clearly mentions that the design does not constitute to be a trademark in eyes of law. The judge said that only the extra features which affect the goodwill not the ordinary features of the footwear.  Trademarks overlapping with design rights are a very big problem which came from the Landmark judgement. This problem is difficult to find and ensure that the rights are not over lapping. Applicants seeking design registration will look to define their claim more strategically, so that they can get the most from their intellectual property.

The court by charging heavy fines set an example in public domain. This also will be a warning for those powerful companies who get injunction in their favor and make the local company suffer losses. The judgement is a clear warning for those who gets injunction maliciously, will have to suffer harm at the end.


[1]2019 SCC  OnLine Del 6808

[2] 6 C.S.(COMM) 690/2018 & I.A. No.11166/2018

[3] C.A. Brijesh and Rohan Krishna Seth,“The overlap of design and trademark rights” ,https://www.worldipreview.com/contributed-article/the-overlap-of-design-and-trademark-rights

[4] Mohan Lal v. Sona Paint and Hardwares, AIR 2013 Del 143: This case had held that different causes of action, i.e., for design infringement and passing off, cannot be combined in one suit at all. It was noted that while “the fundamental edifice of a suit for infringement under the DA would be the claim of monopoly based on its registration, which is premised on uniqueness, newness and originality of the design, the action for passing off is founded on the use of the mark in the trade for sale of goods and/or for offering service; the generation of reputation and goodwill as a consequence of the same”.


[1] MANU/DE/0828/2019

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s