Delhi High Court
Holland L.P. & Anr vs A.D. Electro Stell Co. Pvt. Ltd. on 26 April, 2017
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 18.4.2017
Judgment delivered on : 26.4.2017
+ CS(COMM) 83/2017
HOLLAND L.P. & ANR ...... Plaintiffs
Through Mr. J. Sai Deepak, Mr. Mohit Goel,
Mr. Shidhant Goel, Mr. Ashutosh
Nagar and Mr. Abhishek Kotnala,
Advs.
versus
A.D. ELECTRO STELL CO. PVT. LTD. ..... Defendants
Through Mr. Rajesh Mahendru, Adv for D-1.
Mr. Ashwani Bhardwaj, Adv for D-2
to D-4.
Mr. G. S. Chaturvedi and Mr. R.
Madhav Bera, Advs for D-3.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.
I.A. No.4740/2014 (under Order XXXIX Rules 1 & 2 CPC)
1 Present suit is a suit for permanent injunction restraining infringement
of copyright, rendition of accounts and damages. The plaintiff is a company
incorporated under the law of United States of America having its registered
office at Illinois, USA.
2 Plaintiff No. 2 is a partnership firm registered under the laws of India
having its registered office at Greater Kailash Enclave-I, New Delhi. Mr.
Naveen Sangri, the constituted attorney of plaintiff No.1 is also the
managing partner of plaintiff No. 2. The plaint has been signed and verified
through him.
3 Plaintiff No. 1 is stated to have pioneered the delivery of
comprehensive and progressive transportation solutions and especially 580
in the field of railway transport. It has an experience of more than 80 years
in the said industry and boasts of a global presence in more than 40
countries. Amongst several auto rack components, cable and chain
securement systems are a container securement locks developed by plaintiff
No.1, i.e. the automatic twist locks (ATLs). The plaintiffs‟ ATLs are used to
secure containers to railcars and to fit all ISO corner castings. The novel
constructional features of the plaintiffs‟ ATLs is a result of years of research
and development which has involved investment of tremendous amounts of
skill, labour of the engineers and experts of plaintiff No.1. The intellectual
rights in these ATLs including his drawings vests solely with plaintiff No.1.
He is entitled to enjoy all such exclusive rights under Section 14 of the
Copyright Act, 1957 (hereinafter referred to as the „Copyright Act‟).
4 The plaintiff No. 1 has been granted a patent for its ATLs in the USA.
Plaintiff No. 2 has also applied for a patent for its ATLs in India under
Patent Application No.1922/DEL/2007 dated 28.08.2006 which is currently
pending.
5 The two fundamental constructional features of the proprietary
drawings of ATLs of plaintiff No. 1 comprise of (i) a uniquely configures
shaft member for receiving springs of various types/material and (ii) spiral
torsional springs that are made of tempered steel. All these features which
are illustrated in the drawings of plaintiff No. 1 are proprietary to plaintiff
No. 1 who alone is the owner of copyright in such original drawings/artistic
work. Plaintiff No. 2 is the exclusive licensee of plaintiff No. 1 for ATLs in
the territory of India. Plaintiff No. 2 is authorized to manufacture,
reproduce, sell, offer for sale these ATLs based on the proprietary drawings
of plaintiff No. 1. The fact that plaintiff No. 2 is the licensee of plaintiff No.
1 has been communicated to the Ministry of Railways, Research Design and
Standard Organisation (RSDO) (defendant No.2). In September 1997, the
Container Corporation of India (CONCOR) selected the plaintiffs‟ ATLs
conforming to drawings No.CONTR-9405-S-21 (fitment details of the
plaintiffs‟ ATLs) which have been used by the Indian Railways in all its
containers. The RITES (defendant No.3) was assigned the task of carrying
out „vendor approval‟ for the ATLs of plaintiff No.2 but now the
responsibility has been taken over by defendant No.2. Once defendant No.2
took over this responsibility, the approval had been granted by defendant
No.2 in accordance with the „Guidelines for Multisourcing of Automatic
Twist Lock‟ (hereinafter referred to as the Multisourcing Guidelines) issued
by defendant No.2 in the year 2011. The RITES has also carried out trials of
ATLs of various other companies who have devised their own proprietary
drawings for such ATLs. The ATLs of plaintiff No. 1, licensed to plaintiff
No.2, was also tested by RITES. On 18.05.2012, defendant No.2 conveyed
its approval to plaintiff No. 2 for supply of plaintiffs‟ ATLs to RITES in
accordance with the Multisourcing Guidelines. This has made plaintiff No. 2
an approved vendor for ATLs. The quality assurance plan approved by
defendants No. 2 & 3 is also a part of the record. Till the date of filing of the
suit (2014), no other supplier except the plaintiff has been approved by
defendants No. 2 & 3/Indian Railway for the supply of ATLs.
6 Defendant No.1 (A.D. Electro Steel Company Pvt. Ltd.) is engaged in
the manufacture and supply of container securement locks. Defendant No.1
is not a licensee of the ATLs of the plaintiff or of the spare parts of ATLs of
the plaintiff. As per the information of the plaintiff, defendant No.1 till the
filing of the suit has not been approved as a vendor by defendant No.2 for
supply of securement locks. In the year 2009, defendant No.1 first attempted
to infringe upon the copyright of the plaintiff in their ATLs when it sought to
supply ATLs conforming to the plaintiffs‟ drawings to the Indian Railways.
On 12.08.2009, the Northern Railways had raised an order upon defendant
No.1 for supply of ATLs conforming to Holland drawings. Such an order
could not have been completed without defendant No.1 infringing upon the
original proprietary drawings of the plaintiffs. The plaintiffs raised an
objection both before the defendant No.1 and the authorities of the Indian
Railways. The General Manager, Northern Railways on 12.10.2009 wrote to
defendant No.3 seeking information as to whether defendant No.1 was an
approved vendor or not. On 27.10.2009, defendant No.3 wrote back to the
General Manager, Northern Railways stating that plaintiff No. 2 is only an
approved source for the supply of ATLs; defendant No.1 has so far not been
approved for supply of ATLs. Defendant No.1 has deliberately misled the
Railways that it has been approved by the RITES when it has not been done
so. Pursuant to a tender floated by Southern Railways for which defendant
No.1 had made a bid, a purchase order dated 10.12.2013 was placed upon
defendant No.1 for the supply of the said ATLs. To execute the order of
Southern Railways, defendant No.1 would have necessarily supplied the
ATLs in conformity with the original proprietary drawings of the plaintiffs‟
ATLs which would have amounted to an infringement of copyright of the
plaintiffs. An objection was raised by the plaintiff. It was learnt that
defendant No.1 in July has also procured a purchase order from East Coast
Railway for supply of these ATLs which were conforming to the original
drawings of the plaintiffs. A clarification was thereafter issued by the
Southern Railways qua the purchase order of the defendant clarifying and
directing the defendant to follow the Multisourcing Guidelines. Defendant
No.1 has bid for other tenders of the Railways and to fulfil these tenders, he
would necessarily have to infringe upon the original drawings of the
plaintiffs. It is reiterated that the plaintiffs‟ original proprietary drawings of
ATLs and its spare parts constitute an artistic work under Section 13 read
with Section 2 (c) of the Copyright Act. The unauthorized, illegal and
unlicensed use of such proprietary drawings of the plaintiffs amounts to an
infringement of his copyright. Present suit has accordingly been filed.
7 Defendant No.1 alone had been arrayed as a party; thereafter with the
intervention of the Court, on 19.03.2014, the RSDO, RITES and the Ministry
of Railways were also directed to be made parties. They have been
impleaded as defendants No.2, 3 & 4 respectively. Amended memo of
parties is on record.
8 Defendant No.1 has denied the averments made in the plaint. His
defence is that the plaintiffs have no right of the said drawings as they are in
public domain and have been issued by defendant No.2. The plaintiffs in
fact never challenged the tenders floated by the Railways for the supply of
ATLs conforming to the drawings of the plaintiffs; the plaintiffs cannot
claim any monopolstic right on the said drawings. No copyright subsists in
any design which is capable of being registered under the provisions of
Design Act; the copyright in any design which is capable of being registered
ceases as soon as the article to which the design has been applied has been
reproduced more than 50 times which is so in the instant case. The design of
the plaintiff was capable of being registered under the Design Act; it has not
been done so; thus the alleged copyright in the said design has even
otherwise ceased. Defendant No.1 from time to time has been participating
in the tenders floated by the Ministry of Railways for supply of ATLs. His
participation in these tenders is since the year 2009. The drawings and
guidelines for manufacturer and supply of ATLs are provided by defendant
No.2 to defendant No.1 on a request made by defendant No.1 to defendant
No.2. This tender inter-alia contains an item description of ATL devices
specifying the drawing numbers which are provided by defendant No.2 on
the basis of which specifications and final drawings have to be prepared by
defendant No.1 and to be submitted to defendant No.2 for its approval. In
order to meet the specifications and drawings given by defendant No.2, the
drawings prepared by defendant No.1 of the assembled devices are more or
less the same and in compliance with the specifications and drawings of
defendant No.2. They are in conformity and in compliance with the
specifications of the drawings provided by defendant No.2.
9 Defendant No.2 provides the necessary drawings which drawings
numbers are mentioned by the Railways in their tenders along with the
Guidelines for the supply of ATL devices. These Guidelines in fact specify
that in order to maintain the public and pricing policy, at least 80% of the
demand should be covered invariably from the registered/approved suppliers,
the balance quantity upto 20% should be covered from un-registered firms
whose capacity could not be tried by an educational order earlier but whose
offers are competitive and prima-facie the Railway is satisfied that they are
capable of executing the order. The Railways have floated tenders for supply
of ATLs keeping in mind the public policy. With this policy in mind, the
Railways offered 20% of the demand to various unregistered firms including
defendant No.1 from time to time. This discretion of such an offer is wholly
upon the Railways and it is on their approval that defendant No.1 has been
supplying these ATL devices to the Railways. Defendant No.1 has been
participating in these tenders for supply of ATL devices since the year 2009
along with the plaintiffs. The plaintiff was at all material point of time aware
of these orders which were being placed upon defendant No.1. The plaintiffs
inspite of being aware of the specifications, character and dimensions of the
ATL device supplied by defendant No.1 have never raised any objection till
the filing of the suit. In 2011, defendant No.1 submitted his drawings for the
manufacture of its ATLs to defendant No.2 for approval. He was registered
as a registered supplier. These ATLs are since being supplied by defendant
No.1 to defendant No.2. Defendant No.2 in 2014 had given a letter to
defendant No.1 asking him to supply three wagons of ATL devices for
experimental running and there is every possibility that a final approval
would be granted to defendant No.1. Copy of the letter dated 23.08.2014
exchanged between defendants No. 1 & 2 is also on record. It is denied that
the plaintiff has made any novel constructional features of the ATLs
including its drawings as has been alleged by him. The claim of plaintiff
No.1 is barred under the Design Act and the Patent Act as the said drawings
have been provided by defendant No.2 to the Ministry of Railways for
public purpose. The drawings prepared by defendant No.1 are from the
drawings provided by defendant No.2 and thus cannot be termed as
„infringement‟ committed by defendant No.1 of any copyright of the
plaintiffs. It is denied that plaintiff No. 1 is the owner of such drawings as
has been alleged. The drawings of defendant No.1 have been approved by
defendant No.2 for which reason defendant No.2 had in the last letter of
2014 asked defendant No.1 to be tested by defendant No.1 for a period of
three months. The defendant has committed no infringement of the drawings
of the plaintiff. These drawings are readily available for reference by
purchasing a publication for a sum of Rs.2,300/-; such a publication has been
done by the Indian Railways to encourage further innovation and
competition in the space of ATLs.
10 Defendants No. 2 & 4 i.e. RSDO and Ministry of Railways have filed
a common written statement. Their submission is that the Railways have no
role in the manufacture of this product. It is stated that drawing No.
CONTR-9405-S/21 details the interfacing of the plaintiff‟s ATL‟s with the
container flat wagons; it does not detail the internal components of plaintiffs‟
product. The quality assurance plan of the plaintiffs was acknowledged and
returned with a mark „noted for record only‟. It was not approved by
defendant No.2 as has been claimed by the plaintiffs. The plaintiff has been
declared as a „developed source‟ of ATL devices on the Indian Railways.
Defendant No.2 has been writing to the Zonal Railways to re-direct any
source to them so that defendant No.2 can engage with them for their
development in accordance with the structural multisourcing regime. A
series of correspondence have in fact been addressed by defendant No.2
asking the Zonal Railways to direct other firms for development and
multisourcing. The letter dated 27.10.2009 issued by defendant No.3
indicates that defendant No.1 is not an approved source for ATLs. In para
36, it has been stated that efforts for multisourcing have been made by
defendant No.2 to develop newer vendors and such informations are given to
the Zonal Railways/stake holders. These communications do not stop the
Zonal Railways from procuring any item from other sources known to them.
In fact defendant No.2 also advised the Zonal Railways to direct these
sources to defendant No.2 for consideration under the multisourcing
guidelines. It is denied that any proprietary drawing of the plaintiffs‟ ATL
have been published by defendant No.2. Defendant No.2 has incorporated
the interfacing of the plaintiffs‟ product with the container wagons design i.e.
owned by defendant No.2 i.e. drawing No. CONTR-9405-S/21. This
interfacing does not publish any detail of the plaintiffs‟ internal components.
In fact drawing No. SB-71350/S is available on the website of plaintiff No. 2
itself.
11 Defendant No.3 (RITES)‟s defense is that the only role attributed to
him was to grant an approval which it did for a period of two years;
thereafter, the process of vendor approval was taken over by defendant No.2
i.e. w.e.f August, 2010 who has since then been dealing with all approvals in
respect of ATLs. It is not denied that defendant No.3 had written a letter
(dated 27.10.2009) to the General Manager, Northern Railways informing
them that defendant No.1 was not an approved source for supply of ATLs.
12 Replication has been filed by the plaintiff to the respective written
statements. The averments contained in the plaint have been reiterated. It is
reiterated that the claim made by defendant No.1 that the drawings of the
plaintiffs‟ ATLs are in public domain is false. Defendants No. 2 to 4 have
specifically stated that drawing No. CONTR-9405-S/21 details only the
interfacing of the plaintiffs‟ ATLs with the Indian Railways; the drawing
does not detail the internal components of the plaintiffs‟ ATLs.
13 In the course of these proceedings, defendant No.1 had filed an
additional affidavit dated 06.03.2017 wherein it is stated that drawing No.
CONTR-9405-S/21 of the ATLs was provided by the Railway Authorities in
the year 2007-2008; based on these details and specifications, defendant
No.1 had designed the ATLs.
14 On behalf of the plaintiffs, arguments have been addressed by Mr. Jai
Sai Deepak, Advocate. Contention is that the plaintiff is the owner of the
copyright in the drawings of the ATLs‟; it is an artistic work within the
meaning of Section 2 (c) read with Section 13 of the Copyright Act with the
plaintiffs‟ right to convert a two dimensional artistic work into a three
dimensional constructions. Plaintiff No. 1 is the exclusive owner of this
copyright and plaintiff No. 2 is his exclusive licensee. Defendant No. 1 in
para 9 (v) of the written statement has in fact admitted that he is copying the
drawings of the plaintiff; his justification is that this copyright in the
drawings has ceased in view of the provisions of Section 15 (2) of the
Copyright Act; submission being that it is only an aesthetic feature which
can be registered under Section 2 (d) of the Design Act; the functional
features are not capable of a registration under the Design Act. To support
this proposition, reliance has been placed upon 2013 (55) PTC 61 Mohan Lal
Vs. Sona Paint and Hardwares as also another judgment of a Bench of this
Court reported as 1999 PTC 36 (DEL) Escorts Construction Equipment Vs.
Action Construction Equiptment,. Further submission being that the fact that
plaintiff No. 1 has been granted a patent by USA for these ATLs prima-facie
demonstrates that the same have functional features; the exclusive right to
reproduce these drawings into a 3-D object vests with the plaintiffs. The
drawings of the plaintiffs are not in public domain as defendant No.2 has
admitted that no drawings have been given by defendant No.2 to defendant
No.1. Moreover, drawing No. CONTR-9405-S/21 details only the
interfacing of the plaintiffs‟ ATL and does not detail the internal
components. The Multisourcing Guidelines which regulate the grant of
approval deals with the physical characteristics of the ATLs; the
Multisourcing Guidelines do not permit defendant No.1 to infringe upon the
drawings of the plaintiffs; merely because the plaintiffs‟ drawings are used
as reference point or quoted in the tender so prescribed by defendant No.2
does not take away the copyright of the plaintiff; they do not come into
public domain.
15 Arguments have been refuted. The contesting defendant is in fact
defendant No.1. His submission is that drawing No. CONTR-9405-S/21 has
in fact been uploaded by defendant No.2 and given to defendant No.1 who
has conformity features of the said drawings; it does not amount to an
infringement as these drawings are now in public domain. It is further
pointed out that shape, configuration and pattern detailed in the drawings fall
within the meaning „design‟ under Section 2 (d) of the Design Act and
necessarily have to be registered. Under Section 15 (2) of the Copyright Act,
a copyright in any design which is capable of being registered under the
Design Act but it has not been registered will cease where the article has
been reproduced 50 times. The allegation of the plaintiff that these drawings
are the original artistic work of the plaintiff is wrong. The plaint is also
lacking in material particulars. The allegations in the plaint are vague with
no details, numbers and no marks of identification are disclosed as to what
drawings, information, know-how or secrets belonged to plaintiff No. 2 and
which have allegedly been infringed by defendant No.1; the so called alleged
intellectual properties are not identifiable. It is further pointed out that
defendant No.1 cannot be restrained from carrying on a lawful trade; the
plaintiff was well aware of the fact that defendant No.1 has entered into this
business since the year 2009; he has chosen to file a suit only in 2015 i.e.
after almost six years. He has acquiesced the approval to defendant No.1 by
defendant No.2. Defendant No.1 has been making supplies of ATLs to the
Indian Railways and to various Zonal Railways and the last letter dated
28.03.2014 issued by the Ministry of Railways in favour of defendant No.1
clearly shows that he has been directed to supply three wagons set of ATLs
to CONCOR for a study; the various other orders which have been placed
upon him also support his submission that in fact defendant No.1 has almost
reached the stage of having become an approved vendor. The Multisourcing
Guidelines also encourage other vendors to participate in this venture; it
cannot be the monopoly of plaintiff No. 2 alone; it is pointed out that ATLs
which were original priced at Rs.12,000/- has now been reduced to a figure
of Rs.4,900/- and this is all because of the competition in the market where
defendant No.1 is only a small fish. This is a healthy competition which
should be encouraged and this is clear from the Multisourcing Guidelines
which envisage such a situation. Learned counsel for defendant No.1 in
support of his submission has placed reliance upon a judgment of a Bench of
this Court reported as 2002 (25) PTC 327 (Del) Polymer Papers Ltd. Vs.
Gurmit Singh & Others as also another judgment of the Division Bench of
this Court reported as 2009 (40) PTC 519 (Del) Microfibres Inc. Vs.
Girdhar & Co. & Anr. Submission is that the plaintiffs have failed to make
out any prima-facie case in their favour. The application is liable to be
dismissed.
16 Arguments have been heard. Record has been perused.
17 Plaintiff no.1 on 03.02.2009 was granted a patent qua his container
securement device i.e. the automatic twisted lock (ATL). This is evident
from the patent application of plaintiff No.1 which has been placed on
record. On 11.7.2006 plaintiff nos.1 and 2 had entered into an agreement by
virtue of which plaintiff no.2 became the exclusive licensee of plaintiff no.1
in the territory of India. The patent application filed by plaintiff no.2 seeking
a grant of patent in his favour is pending before the Competent Authority
since 28.8.2006; he has not yet been granted a patent. Drawing No.CONTR-
9405-S-21 is a copy of the drawing of plaintiff no.1‟s ATL. This drawing
has been filed at serial no.4 in the list of documents of the plaintiff. The fact
that this drawing number has been uploaded by defendant no.2 and in fact
had been passed on to defendant no.1 on the basis of which defendant no.1
had prepared his drawing and the ATL which he was manufacturing for the
Railway is not in dispute. The supplementary affidavit of defendant no.1
dated 06.3.2007 specially so states. This affidavit of defendant no.1 states
that drawing No.CONTR- 9405-S-21 of the ATL has been provided to him
by the Railway Authorities in the year 2007-08 and based on the details and
specification contained in the said drawing defendant no.1 designed his
ATL with all its specifications. The fact that this drawing had been given to
defendant no.1 as way back as in the year 2007-08 by defendant no.2 is not
disputed. There is no opposition to this affidavit dated 21.01.2017 which has
been taken on record and which was in compliance of the directions
contained in the order dated 21.3.2017. In fact this has always been the
stand of defendant no.1 who has stated that it was on the basis of this
drawing which has been given to him by defendant no.2 that defendant no.1
had made his own drawing and manufactured his ATLs which were then
being supplied to the Railway since the year 2009. The fact that ATLs had
been manufactured and were supplied by defendant no.1 to various
departments of the Indian Railways including the Zonal Railways since the
year 2009 is evident from the documents of the defendant. Various purchase
orders have been placed on record. The purchase order dated 26.9.2011 of
the East Cost Railway shows that ALTs had been supplied by defendant no.1
to the East Cost Railway. Purchase order dated 06.6.2013 issued by the
Indian Railways, purchase order dated 19.7.2013 issued by the South
Western Railway all evidence this same position that orders for manufacture
and supply of ATLs were placed by the Railways upon defendant no.1
pursuant to which ATLs were manufactured and supplied. These purchase
orders were followed by subsequent orders dated 23.9.2013 issued by the
Southern Railways in favour of the defendant followed by another purchase
order of the Southern Railway dated 10.12.2013. Letter dated 28.3.2014
issued by the Ministry of Railway in favour of defendant no.1 had advised
him to supply three wagons supply of ATLs to CONCOR for purposes of a
case study. On 10.02.2014, defendant no.2 (RSDO), who was the certified
body to grant approval to a party for the quality of his product had granted a
certificate of approval to defendant no.1 which was for a period of three
years i.e. up to 10.02.2017. The issuance of this communication by
defendant no.1 details the approval granted by defendant no.2 in favour of
defendant no.1 subject to terms and conditions annexed along with this
document. These various purchase orders ranging from the year 2011 all
show that the Indian Railways under the Ministry of Railway as also the East
Coast Railways, South Western Railways and Southern Railways had placed
several orders on defendant no.1 for supply of ATLs which purchase orders
had been completed meaning thereby it was to the satisfaction of the
Railways that these ATLs which had been manufactured by defendant no.1
had been accepted by the Railways. The letter dated 20.01.2014 sent by the
Ministry of Railway to defendant no.1 also reflects the intent of the
Government to accord to defendant no.1 the status of a regular supplier of
his ATL‟s.
18 The fact that the drawing of the plaintiff No.CONTR- 9405-S-21 has
been handed over by defendant no.2 to defendant no.1 is also not in dispute.
This document is thus in public domain. Pictorial representation of the
drawing of both plaintiff and the defendant has also been perused. To the
naked eye, the drawings appear to be almost similar and this is also the stand
adopted by defendant no.1 who has stated that it was on the basis of these
drawings which had been given to him by defendant no.2 that defendant no.1
had prepared his specifications and drawings and assembled his device
which was in compliance of the specifications of the drawings approved by
defendant no.2.
19 The fact that these supplies had been made by defendant no.1 to
various branches of the Railways since 2009 which has been specifically
stated in the written statement of defendant no.1 to which there is no denial.
This suit has been filed in March, 2014. There appears to be no explanation
as to why the plaintiff did not take any action prior in time if he was really
aggrieved by the fact that his own drawings upon which he had a proprietary
right has been infringed upon by defendant no.1; why no action has been
taken for such a long period has not been answered.
20 Section 2(d) of the Design Act reads as follows:
2(d) "design" means only the features of shape, configuration, pattern,
ornament or composition of lines or colours applied to any article whether
in two dimensional or three dimensional or in both forms, by any industrial
process or means, whether manual, mechanical or chemical, separate or
combined, which in the finished article appeal to and are judged solely by
the eye; but does not include any mode or principle of construction or
anything which is in substance a mere mechanical device, and does not
include any trade mark as defined 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
(14of 1957).
21 The shape, configuration, pattern and composition of the lines
mentioned in the pictorial drawing of the plaintiff prima facie fall within the
definition of "design" as contained in Section 2(d) of the Designs Act. This
drawing (CONTR-9405-S-21) cannot simpliciter be termed as a mechanical
device to get the benefit of being excluded from Section 2(d) of the said Act.
The plaintiff has admittedly not made any effort to get his design registered.
22 Section 15(2) of the Copyright Act reads as under:
15. Special provision regarding copyright in designs registered or capable
of being registered under the Designs Act, 2000 (16 of 2000)-
(1) ........
(2) Copyright in any design, which is capable of being registered under the
Designs Act, 1911 (2 of 1911), but which has not been so registered, shall
cease as soon as any article to which the design has been applied has been
reproduced more than fifty times by an industrial process by the owner of the
copyright, or, with his licence, by any other person.
23 Since the design in the instant case which was capable of being
registered under the Designs Act and which has not been registered, it would
lose its copyright, if any, since admittedly this article has been reproduced
more than 15 times by an industrial process. Reliance upon Section 15(2) of
the said Act by defendant no.1 appears prima facie to be in his favour.
24 The Multi Sourcing Guidelines of defendant no.2 are also on record.
This is an admitted document. Along with this Guidelines annexure II/4-21
which is a copy of the letter dated 27.01.1979 is also on record. This
document is admitted. This document is a communication inter se the
various departments of the Railway Board and the Indian Railways wherein
instructions are given that even unregistered firms should furnish their
quotations in order that supply can be placed upon them for the supply of
railway equipments; their capacity can be verified by deputing
representatives of the Department for the said purpose. This circular in fact
states that 80% of the demand should be covered invariably by a
registered/approved supplier but the balance quantity of 20% should be
covered from unregistered firms whose capacity could not be tried by an
educational order earlier but whose offers are competitive and prima facie
the Railway is satisfied that they are capable of executing the order. This is
also the stand adopted by defendant no.1. In his written statement this
circular has been relied upon to substantiate this defence that this circular is
in fact an instruction to control healthy pricing and to remove the monopoly
of bother big giants like the plaintiff. The fact that after participation of
defendant no.1 in the fray the original price of an ALT which was priced at
Rs.12,000/- per lock has been reduced to Rs.4900/-. This is not in dispute.
This reduction is primarily because of the healthy competition which has
been created by defendant no.1. The last order placed upon defendant no.1
by defendant no.2 through its communication dated 28.3.2014 substantiates
the submission of defendant no.1 that a trial testing is going on his product;
the fact that earlier orders had been placed upon him and they had been
satisfactorily implemented qua various Zonal Departments of the Railways
also not being in dispute, the submission of defendant no.1 that he is at the
stage of getting a status of an "approved vendor" cannot be discounted. The
fact that he had been granted a certificate of approval by defendant no.2 on
10.02.2014 is also not in dispute. This document is on record. He is a
registered supplier. Defendant no.1 who is carrying out his trade lawfully
cannot be restrained from doing so. Merely because he is in competition
with the plaintiff does not make out a case to return a finding that the
petitioner having a patent under the US law is automatically entitled to the
benefit of the same for which an application is admittedly pending since the
year 2006.
25 The plaintiffs have failed to show that they are the exclusive owners of
this drawing CONTR- 9405-S-21 which they are using for the purpose of
manufacturing their ATLs. There claim to be the originators of the said
ATLs is destroyed by the fact that it is this drawing which has been used by
defendant no.2 as a benchmark to allow other competitors to come into the
market and to make ATLs which would be in the conformity and as per the
specifications laid down in this drawing. This drawing has entered the
public domain; it cannot be the proprietary right of the plaintiffs. Heavy
reliance placed by the plaintiff upon the stand of defendant nos.2 to 4 that the
drawing along has been uploaded and not its internal component is neither
here and nor there. This statement of the plaintiff is vague; what are those
internal components, know-how; secrets which have been obtained by
defendant no.1 unauthorizedly has not been detailed. The drawing
No.CONTR- 9405-S-21 admittedly having been supplied by defendant no.2
to all persons, who wish to apply to bid for supply of ATLs to the Railways,
have to follow the design and pattern laid down in the said drawing. Such a
drawing would fall prima facie within the definition of Section 2(d) of the
Designs Act and was required to be registered. Admittedly the plaintiff has
not applied for registration under the Designs Act. Section 15(2) of the
Copyright Act, at the cost of repetition, comes to the aid of the defendant.
26 The Multi Sourcing Guidelines as discussed supra also permit
unregistered owners to participate in tenders floated by the Department and
in fact defendant nos.2 to 4 in their written statement have been crying
hoarse hoping that the Zonal Railways would redirect other suppliers to them
in order that orders could be placed upon on such like suppliers even if they
are unregistered. Thus in terms of the Multi Sourcing Guidelines, 20% of
such orders have to be placed upon such unregistered firms; this is to
promote a healthy competition and which exactly the Government has been
following; as a result the price index of the ATLs has been reduced
considerably.
27 The plaintiffs have failed to make out a prima facie case in their
favour; balance of convenience is also not in their favour; irreparable loss
and injury will be suffered by the defendants in case defendant no.1 is
restrained from carrying on his trade.
28 Application is dismissed.
INDERMEET KAUR, J
APRIL26, 2017
A/ndn
