Recently, the Delhi High Court, while adjudicating a series of suits filed by Crocs Inc. against Indian footwear manufacturers including Bata, Liberty, and Relaxo, addressed a significant question at the intersection of design and trademark law, whether a passing off action can be maintained during the subsistence of a registered design. The Single Judge had dismissed the suits as non-maintainable on the ground that the claim was based solely on a registered design. However, the Division Bench reversed this view, holding that where trade dress and goodwill are properly pleaded, the claim warrants a full trial and cannot be rejected at the threshold.
Brief Facts:
Crocs Inc. filed passing off suits against several Indian footwear manufacturers, including Bata, Liberty Shoes, Relaxo, and others, alleging imitation of the distinctive design of its clog-style footwear registered under Design No. 197685. Crocs argued that the design had become source-indicative through extensive global use and commercial reputation.
The learned Single Judge dismissed the suits at the outset, holding that an action for passing off could not lie where the subject matter was protected by a registered design. This dismissal was challenged before the Division Bench.
Contentions of the Petitioner:
The counsel appearing for Crocs asserted that its design had acquired transborder reputation and had become distinctive of its brand. It claimed that the defendants had misrepresented their products as those of Crocs, thereby causing confusion and damage to its goodwill. The petitioner relied on the decision in Mohan Lal v. Sona Paints & Hardwares to argue that separate causes of action could be maintained for design infringement and passing off.
Contentions of the Respondent:
The counsel for the respondents argued that the claimed design was not novel and had existed in the public domain even before Crocs' registration. They submitted that Crocs could not assert exclusivity or goodwill in a non-distinctive product design and that no elements beyond the registered design were pleaded to sustain a passing off action.
Observations of the Court:
The Division Bench of the High Court held that the Single Judge had erred in summarily dismissing the suits without conducting a factual inquiry into whether Crocs had pleaded non-design elements forming the basis of a passing off claim.
Quoting directly from the judgment, the Court observed, “The learned Single Judge, in our considered opinion, has erred in dismissing the suit at the threshold without returning a finding on whether the ingredients of a cause of action for passing off existed on the basis of the pleadings. The finding that the cause of action in the suit is solely premised on the registered design, and not on any trade dress or other non-design elements, could not have been returned without trial.”
The Court clarified that the protection under the Designs Act is limited and time-bound, whereas passing off protects ongoing common law rights. Relying on the 5-Judge Bench decision in Carlsberg Breweries A/S v. Som Distilleries, it reiterated, “A passing off action, founded on misrepresentation and deception, is not per se barred merely because the product design is registered, unless the plaintiff seeks to extend the design monopoly beyond its limited statutory term.” Addressing the key issue of coexistence, the Court noted, “There is no statutory interdict on a design registrant also asserting common law rights in trade dress or source-identifying features of the product, so long as such assertions are not exclusively based on the registered design.”
Moreover, the Bench disagreed with the conclusion that Crocs had failed to plead non-design elements. The Court stated, “The assertions of trans-border reputation, global use, consumer recognition, and source identification through the overall get-up of the product... if proved, could sustain a cause of action for passing off independent of the design registration.”
Importantly, the Court distinguished between maintainability and merits, observing, “The learned Single Judge conflated maintainability with success on merits. Whether the plaintiff ultimately succeeds in proving that the design has acquired source-identifying distinctiveness is a matter for trial, not for rejection at the threshold.”
The decision of the Court:
The Division Bench accordingly set aside the order dated 18 February 2019 and remanded the matter back to the Single Judge for adjudication on merits. It held that, “A design registrant may, during the currency of the design registration, bring a passing off action based on features of the product that have acquired distinctiveness, provided such distinctiveness is not solely attributable to the registered design.”
Case Title: M/S Crocs INC USA vs. M/S Bata India & Ors
Case No.: RFA (OS) (Comm) 22/2019
Coram: Justice C. Hari Shankar, Justice Ajay Digpaul
Advocate for Petitioner: Adv. J. Sai Deepak, Sr. Adv.), S.K. Bansal, Ajay Amitabh, Suman, Gaurav Gogia, Deepak Shrivastava, R. Abhishek
Advocate for Respondent: Adv. Neeraj Grover, Mohona Sarkar, Kashish Vij, Saikrishna Rajagopal, Julien George, Arjun Gadhoke, Deepika Pokharia, N. Parvati, Ishith Arora, Simranjot Kaur, CA Brijesh, Hemant Singh, Mamta Rani Jha, Shruttima Ehersa, Rohan Ahuja, Diya Viswanath, N. Mahabir, P.C. Arya, Parveen Arya, Noopur Biswas, Udit Gupta, Gaurav Miglani, Anil Dutt
