Case Title: Relaxo Footwears Ltd v. Aqualite India Ltd & Anr.
According to the Delhi High Court, a registered design's owner does not automatically lose that right because they have yet to take legal action against all infringers.
The court ruled that even if it hasn't taken action against some of the infringers, the design holder still has the right to prevent infringement of the registered design.
"It is not unusual for small players to copy designs, which have become popular. It is not necessary for the proprietor of a design to pursue its remedies against each dealer/manufacturer selling infringing products. It is possible that the benefits of pursuing a particular infringer may not be commensurate with the cost and effort for doing so," it added.
Further, the division bench of Justice Vibhu Bakhru and Justice Amit Mahajan stated that it is acceptable for a design holder to consider commercial factors while evaluating its options.
"A design holder is not required to pursue the available remedies against all infringers in order to pursue its remedies against some infringers. It is open for the design holder to select the infringers it wants to proceed against. The rights of a proprietor of a registered design are not diluted merely because there are multiple infringers," said the court.
In its ruling on Relaxo Footwears Limited's appeal against a single bench's decision dismissing its request for an interim injunction in May 2019 and granting Aqualite's request to vacate an ex parte ad interim injunction dated 14.12.2018, the court stated the remarks.
Both Aqualite and Relaxo are well-known shoe manufacturers. In 2018, Relaxo launched a lawsuit against Aqualite, alleging infringement of its slipper design. Regarding the surface pattern, cuts, ridges, and curves, in particular, Relaxo asserted that the design is innovative and distinctive.
In its ruling, the Single Bench noted that a market assessment carried out by parties in accordance with its decision revealed that there were competing goods on the market that were comparable to the Subject Design.
The court further stated that although Relaxo did not make any such claims of innovation in its application for registration of the Subject Design, it claimed uniqueness in relation to the colour combination and the positioning of the label displaying the maximum retail price (MRP).
It also took note of the letter, dated 18.01.2019, from a Chinese manufacturer noting that the subject design's strap was first presented to the market seven to eight years ago and has seen significant growth since 2016. As a result, the court determined that the design was widely used in commerce.
In its ruling on the appeal, the division bench presided over by Justice Bakhru stated that it is obvious that the Aqualite items' designs are very similar to the Subject Design. The court stated right away that a single bench could not have ordered the parties to undertake a market study by itself.
"Further, we are also not persuaded to accept that the results of the market survey were relevant to address the controversy before the learned Single Judge. The market survey would, at best, indicate that the products were available in the market. It would not establish that the Subject Design lacked novelty and originality at the time when it was registered," said the court.
The court stated that it could not accept the idea that a conclusion about the Subject Design's lack of novelty and originality could have been made based solely on the results of a market survey without any proof regarding the precise date that the aforementioned products were first made available to consumers by their respective sellers. According to the court, it was necessary to make a determination in light of the date the Subject Design was registered.
As Relaxo had not asserted originality in the design of the strap, the court further stated that the letter saying the strap had been introduced to the market seven to eight years prior would be of little assistance in reaching the prima facie judgement in respect of the Subject Design.
"Relaxo had claimed novelty in the shape, configuration and surface pattern as illustrated in the images of the Subject Design. Relaxo had not claimed any novelty in respect of the strap of the footwear. The Subject Design indicates a surface pattern comprising four parallel stripes on one-half of the top surface. The central stripe runs at the centre of the surface with three further stripes on one side. In addition, there is a white stripe running through a groove at the centre of the vertical surface of the footwear. The question of whether the Subject Design is novel or original was required to be ascertained by determining whether it was published or available in the public domain prior to the registration," said the court.
It also mentioned Aqualite's assertion that a product with a comparable design was sold on Amazon, proving that the design in question was already in the public domain when the Subject Design was registered.
The court also stated that Aqualite would need to prove that the aforementioned product was offered for sale prior to the registration of the Subject Design. Aqualite bases its claims on a customer review from May 25, 2017, hence it was required to look at the material's admissibility as evidence, according to the statement.
In response to Single Bench's conclusion that the subject design is generic, the court emphasised that a mark that is generic cannot be used as a trademark.
"This is because it would fail to perform the primary function of the trademark as the source identifier of the product. However, this concept would have no application while considering infringement of a design. In terms of Section 2(d) of the Designs Act, by definition, a design does not include a trademark. If a product of a particular design is available prior to its registration, the same would be sufficient to render it incapable of registration on the ground that it is not original or novel.”
According to Section 4 of the Designs Act, a design must be unique and innovative, not have been revealed in any way before registration, and be noticeably different from a known design or a combination of known designs in order to be registered.
"Thus, a mere trade variant, which is a combination of known designs, would not be entitled to protection under the provisions of the Designs Act," it said.
The division bench, however, stated that the parties' market research would not provide a response as to whether the Subject Design was innovative or original at the time of registration or help in evaluating whether the Subject Design was considerably distinct from other designs at that time.
Aqualite asserted that the Subject Design is just a trade variation and cited the Coordinate Bench of this Court's ruling in Crocs Inc. Usa v. Bata India Ltd. & Ors, which stated that shoemakers have minimal influence over the development of new designs.
However, the court said, "Undoubtedly, there are constraints with regard to footwear design. Footwear designers have to function under the given constraints, however, the decision in Crocs Inc Usa v. Bata India Ltd & Ors. (supra) cannot be read to mean that there can be no registrable design in respect of the footwear merely because they are fit to the shape of the foot. If the creative pursuits of footwear designers lead them to express themselves in novel designs that are merely discernable, there is no reason to assume that such designs would not be registrable."
The court said that it is not persuaded to accept that Aqualite has provided enough evidence for it to determine that the Subject Design is just a trade variation and impossible to differentiate from existing designs or a mix of patterns.
"The conclusion of the learned Single Judge is not based on the findings that the Subject Design is indistinguishable from designs that were known at the time of the registration. It is based on the prima facie, opinion that there are products with similar designs currently available in the market. Thus the 'prima facie' conclusion of the learned Single Judge is not well founded," it added.
When granting the appeal, the court stated that Acqualite, their directors, primary officers, and employees were not allowed to manufacture, sell, offer for sale, advertise, import, export, or deal in any way with products that violated the Subject Design (Design bearing no. 294938) until the lawsuit was resolved.