Delhi High Court

Holland Company Lp & Anr vs S.P. Industries on 20 May, 2014

Author: Rajiv Sahai Endlaw

          *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.

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

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,

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

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;

(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;

(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

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

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

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

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