*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 20th May, 2014.
+ CS(OS) 160/2013
HOLLAND COMPANY LP & ANR ..... Plaintiffs
Through: Mr. Varun Eknath, Advocate.
Versus
S.P. INDUSTRIES ..... Defendant
Through: Mr. J.M. Kalia and Mr. D.V. Singh,
Advocates.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
IA No.1375/2013 (of the plaintiffs u/O 39 R-1&2 CPC).
1.
The two plaintiffs have instituted the suit, (i) for permanent injunction restraining the defendant from manufacturing, selling, offering for sale Automatic Twist Locks and parts thereof by using the knowhow information, drawings, designs, specifications and product information of the plaintiff no.1, amounting to infringement of the copyright of the plaintiff no.1 therein; (ii) for permanent injunction restraining the defendant from manufacturing, selling, offering for sale Automatic Twist Locks and parts thereof by using the industrial drawings, designs, specifications and product information supplied by the plaintiffs to the Indian Railways; and, (iii) for ancillary relief for delivery of infringing products. CS(OS) 160/2013 Page 1 of 11
2. The plaint was accompanied with this application claiming the same interim relief as in the plaint.
3. Summons of the suit and notice of the application were issued to the defendant.
4. The defendant has contested the suit by filing a written statement and to which the plaintiffs have filed a replication. The counsels have been heard.
5. The case of the plaintiffs is:-
(i) that the plaintiff no.1 is a company incorporated under the laws of Illinois, USA and is a pioneer in railways supply industry for car / wagon components;
(ii) that the plaintiff no.1 has a copyright over the industrial drawings of its product and mechanical parts thereof namely Automatic Twist Locks system for securing a cargo container to a support such as a deck of a vehicle or a second container with which the first container is to be stacked;
(iii) that the industrial drawings of the automatic securing device of the cargo container was first conceived and invented by M/s. Mclean-Foga Company; the plaintiff no.1 in the year 1986 CS(OS) 160/2013 Page 2 of 11 acquired the railway product portion of the McLean-Foga Company along with all Intellectual Property Rights including copyright and patents; the plaintiff no.1 is thus the proprietor of the copyright in the said design and has further developed the same;
(iv) that the plaintiff no.1 in the year 2006 launched its updated concept of Automatic Twist Locks device;
(v) that the drawings of the Automatic Twist Locks Device along with its components are the original artistic work and the plaintiff no.1 is the owner of the copyright therein and is entitled to exclusive right thereto, whether two dimensionally or three dimensionally;
(vi) that the plaintiff no.1 also claims its copyright over the industrial drawings of the spare parts / components of the Automatic Twist Locks;
(vii) the application of the plaintiff no.1 for grant of patent is pending and has been published;
(viii) that the plaintiff no.2 M/s Sanrok Enterprises is the exclusive licensee of the plaintiff no.1 in India for manufacturing, selling, CS(OS) 160/2013 Page 3 of 11 marketing and servicing the plaintiff no.1's Automatic Twist Lock and its spare parts;
(ix) that the product of the plaintiff no.1 was chosen by the Indian Railways for fitment on the Low Platform Container flat Wagons and the first order of which was executed by the plaintiff no.1;
(x) that the Automatic Twist Lock devices of the plaintiffs are being used on Container Flat wagons of Indian Railways;
(xi) that the plaintiff no.1 in December, 2012 learnt that Eastern Railway, Sealdah Division had granted a contract to the defendant for carrying out the repair / replacement of spare parts and service which includes overhauling and replacement of defective parts, of Automatic Twist Lock devices supplied by the plaintiffs to the Eastern Railways;
(xii) that the plaintiff no.2 was also one of the bidders in the tender floated for the same;
(xiii) that the defendant though not having the technology as well as the original parts of Automatic Twist Lock devices to be replaced, accepted the contract - the same amounts to CS(OS) 160/2013 Page 4 of 11 infringement of the proprietary rights of the plaintiffs as the defendant has claimed to be manufacturer and supplier of the plaintiffs' original spare parts which is not possible to manufacture without using the Industrial Drawings of the plaintiffs;
(xiv) that the plaintiffs' drawings of the spare parts of Automatic Twist Lock devices are readily available as it is a public document published by the Indian Railways with due permission of the plaintiffs;
(xv) that the defendant has copied the drawings of the plaintiff no.1 for manufacture of spare parts of Automatic Twist Lock devices by using reverse engineering; and, (xvi) that the spare parts to be so supplied by the defendant are bound to be inferior / of substandard quality as the defendant does not have the required technology and systems to produce the same.
6. The defendant has contested the suit by pleading:-
(a) that the drawing in respect of which the plaintiffs claims copyright is not an artistic work within the meaning of Section 2(c) of the Copyright Act, 1957;
CS(OS) 160/2013 Page 5 of 11
(b) that the engineering drawing is always the work of an engineer or technical expert, hence, Section 14 (c) of the Copyright Act would have no application thereto;
(c) that the drawing so created by an expert or engineer for any engineering product / article would amount to design within the meaning of The Designs Act, 2000;
(d) it is the admitted case of the plaintiff that it has manufactured similar engineering products since long; by virtue of Section 15 of the Copyright Act, no copyright exists in any drawing or design after its reproduction more than 50 times by an industrial process; the plaintiff for this reason also has no right;
(e) the aim of the plaintiff by filing the suit is to monopolize Automatic Twist Locks for wagons / its spare parts and oust all competitors from market and which is not permissible in law;
(f) denying the copyright of the plaintiff no.1;
(g) that the suit is a counterblast to the plaintiffs' failure and the defendant's success in the tender invited by the Indian Railways;
CS(OS) 160/2013 Page 6 of 11
(h) denying that the defendant has misappropriated any rights of the plaintiffs; and,
(i) that the Indian Railways on earlier occasions also had placed similar orders / contracts on various others than the plaintiffs.
7. I had during the hearing enquired from the counsel for the plaintiffs whether the plaintiffs, while supplying the Automatic Twist Locks to the Railways had imposed any condition on the Railways that the spare parts could be supplied and the repair and overhauling thereof conducted by the plaintiffs only. What has emerged is that the orders for the supply of Automatic Twist Locks were placed on the plaintiff no.2, not by the Railways, but by the manufacturer of wagons for the Railways. No such condition existed in the said supplies by the plaintiffs;
8. Else, the counsels during the hearing reiterated their case as noted above. The counsel for the defendant also argued that the plaintiff, by seeking the interim relief was effectively seeking relief against the Railways without choosing to implead Railways as a party to the suit. It was further argued that the supply of spare parts by the defendant to the Railways is to be as per the specifications given by the Railways. Referring to Section 22 of the Copyright Act it was also argued that since the same refers to the CS(OS) 160/2013 Page 7 of 11 death of the author, the copyright cannot be held by a Company. Distinction was also sought to be made out between a copyright and a design. While the counsel for the plaintiffs referred to Babbar Wreckers Private Ltd. Vs. Ashok Leyland Ltd. 2011 (45) PTC 164 (Del), the counsel for the defendant referred to Aga Medical Corporation Vs. Faisal Kapadi 2003 (26) PTC 349 (Del).
9. Having bestowed my consideration to the matter, I find the plaintiffs to be not satisfying the essential tests, neither of a prima facie case nor of irreparable injury nor of balance of convenience.
10. The grievance of the plaintiffs is with respect to a particular contract placed by the Indian Railways on the defendant. The nature and scope of the work and the earnings of the defendant therefrom are ascertainable. If at all the plaintiffs ultimately succeed, it would be open to the plaintiffs to assess and prove the damage if any suffered by the plaintiffs; though it may be noticed that the plaintiffs in the suit have not claimed the relief of recovery of damages. It can thus not be said that the injury even if any to the plaintiffs would be irreparable.
11. As far as the ingredient of balance of convenience is concerned, the result of the interim relief claimed by the plaintiffs would be interference CS(OS) 160/2013 Page 8 of 11 with the contract placed by the Indian Railways on the defendant. If the case made by the plaintiffs in this suit were to be accepted, it is not the defendant alone who has to be restrained from supplying the spare parts of and overhauling of Automatic Twist Locks supplied by the plaintiffs. In fact it is the Railways who are the ultimate consumer of the said Automatic Twist Locks who have to be restrained from giving the contract for supply of spare parts and overhauling of the said Automatic Twist Locks to anybody else than the plaintiffs. However the plaintiffs while making the said supplies did not insist on any such condition. The plaintiffs must have been aware that the Automatic Twist Locks supplied by them would need replacement of parts, overhauling and repair. If it is the case of the plaintiffs that none else is entitled to manufacture the said spare parts, the plaintiffs should have imposed such condition while making the supplies. It is inexplicable as to why the plaintiffs did not do so. The plaintiffs cannot now be permitted to have any better rights than they contracted for, particularly at the interim stage. Thus the balance of convenience is also not in favour of the plaintiffs.
12. As would be obvious from the narration of the pleadings, the plaintiffs cannot be said to be having a prima facie case either. Though the plaintiffs have refuted the plea in the written statement of the Intellectual Property CS(OS) 160/2013 Page 9 of 11 Right sought to be protected in the suit being a design and not a copyright but the plaintiffs themselves have pleaded having applied for registration thereof as a design. However as per Section 15 of the Copyright Act, upon the application for registration as a design being made, the copyright if any therein is deemed to have been surrendered / abandoned.
13. The application thus fails and is dismissed.
CS(OS) 160/2013.
14. On the pleadings of the parties, the following issues are framed:-
(i) Whether the plaintiff no.1 is the holder of copyright in the drawings of Automatic Twist Locks and parts thereof? OPP
(ii) Even if the Issue No.(i) is answered in favour of the plaintiffs, whether the plaintiffs, after applying for registration as a design, are entitled to assert any copyright? OPP
(iii) Whether copyright even if any of the plaintiffs, being capable of registration under the Designs Act and being not registered has ceased for the reason of the plaintiffs having not controverted the averment in para 4 of the preliminary objections of the written statement, of the articles to which the CS(OS) 160/2013 Page 10 of 11 said design has been applied being produced more than 50 times by an industrial process? OPPr
(iv) Whether the defendant by executing the contract with the Eastern Railways Sealdah Division of repair / overhauling of Automatic Twist Locks supplied by the plaintiffs has infringed any copyright of the plaintiffs? OPP
(v) Relief.
15. No other issue arises or is pressed.
16. The Issues No.(ii) & (iii) are ordered to be treated as preliminary issues as the decision thereon is not found to require recording of any evidence.
17. List for hearing on the preliminary issues on 21st August, 2014.
RAJIV SAHAI ENDLAW, J.
MAY 20, 2014.
pp CS(OS) 160/2013 Page 11 of 11