Important RulingsRulings

Victory for Crocs against footwear manufacturers

Drafted by Swati Thounaojam

HC finds balance in convenience in favour of Crocs, says that the impugned judgment of the learned Single Judge will not constitute a precedent to bar other suits of the Plaintiff; rules in favour of Crocs.

In the present matter, the six appeals in which these applications for interim relief have been filed, are directed against the common impugned order dated 18th February 2019 passed by the learned Single Judge whereby the six suits filed by CROCS Inc. USA (Appellant/Plaintiff) against – BATA INDIA, LIBERTY SHOES Ltd., AQUALITE India  Limited, BIOWORLD Merchandising India Ltd, RELAXO Footwear Ltd. and ACTION Shoes Pvt. Ltd. for passing off have been dismissed as not maintainable. The Shape Trademark Suits (STSs) filed by the Plaintiff pertained to the Plaintiff’s rights in the “Crocs Design Footwear” as a trademark/trade dress. In each of the said STSs, the relief sought was for a permanent injunction to restrain the Defendants from passing off their footwear as that of the Plaintiff under the trademark “CROCS” by adopting and copying the shape trademark and trade dress of the Plaintiff and for ancillary reliefs. In each of the STSs a separate application was filed for interim relief under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure, 1908 (CPC). The Plaintiff also filed six other suits against the same Defendants for infringement of its registered design [hereafter referred to as Design Infringement Suits (DISs)].

HC observes that the issue for consideration in the present matter is whether the Plaintiff has a prima facie case in its favour to seek interim relief; whether the balance of convenience is in favour of the Plaintiff and whether the Plaintiff would suffer irreparable hardship if such interim relief were to be refused?

HC examines the reliance placed by the Plaintiff on the decision in Mohan Lal v. Sona Paint & Hardwares (2013) 55 PTC 61 (Del)(FB) (Mohan Lal) and finds Issue II  in Mohan Lal viz. whether there can be an availability of remedy of passing off in absence of express saving or preservation of the common law by the Designs Act, 2000 and more so when the rights and remedies under the Act are statutory in nature – relevant for the present case. HC observes that on Issue II, the majority of two learned Judges summarily held that a “holder of a registered design can institute an action for passing off.”  

HC further examines the reliance placed by the Plaintiff on Carlsberg Breweries v. Som Distilleries 256 (2019) DLT 1 (Carlsberg) and observes that only Issue III in Mohan Lal constituted the subject matter of the reference before the Five Judge Bench in Carlsberg, which was whether a composite suit in relation to infringement of a registered design and for passing off was maintainable? In other words, Issue II, viz., whether a passing off action was maintainable along with an action for infringement of a registered design was not referred to and was, therefore, not before the Five Judge Bench in Carlsberg. HC finds that Issue III in Carlsberg was answered in the affirmative by holding that “a composite suit that joins two causes of action – one for infringement of a registered design and the other for passing of, of the plaintiffs goods – is maintainable.” Therefore, as far as the ratio of the judgment in Carlsberg is concerned, it was simply that there could be one composite suit to combine the two causes of action: design infringement and passing off.

HC further observes that the discussion in Carlsberg was only in the context of whether a composite cause of action can be “split in some manner” and presented as different suits considering that the basic facts which compelled the Plaintiff to approach the Court complaining of design infringement “are the same as in the case of passing off”. HC notes that the above observations were only in a limited context and for reaching the conclusion that it was not necessary to file two separate suits and that there could be one composite suit claiming both reliefs. HC further notes that the sentence in para 43 of the judgment of Bhat, J. that “the larger legal formulation in Mohan Lal that a passing off action i.e. one which is not limited or restricted to trademark use alone, but the overall get up or trade dress however, is correct” appears prima facie to place the issue beyond doubt that the FJB in Carlsberg upheld the view of the majority of the FB in Mohan Lal that a passing off action was indeed maintainable in respect of a registered design used as a trademark. HC reads para 43 in Carlsberg, together with the preceding and succeeding para, and finds that the only qualification in Carlsberg was that if such registered design was used as a trademark then it can lead to the cancellation of the registration of such design.  The words “as long as the elements of the design are not used as a trademark but a larger trade dress get up, presentation of the products through its packaging and so on” has to be seen in the context of the discussion preceding it which turns on what can be registered as a design and what cannot. HC observes that the FJB does not explicitly or impliedly overrule the FB in Mohan Lal as regards the answer to Issue II and rightly so since the FJB in Carlsberg was concerned only with Issue III (whether a composite suit for design infringement and passing off was maintainable).

HC observes that the understanding by the learned Single Judge in the impugned judgment of what the majority in Mohan Lal held and what Bhat J. as part of the FJB in Carlsberg observed does not appear to be correct. HC finds prima facie merit in the contention on behalf of the Plaintiff that the impugned order of the learned Single Judge unwittingly reiterates the minority view in Mohan Lal which by no means was, even impliedly, affirmed by the FJB in Carlsberg.

HC opines that the Plaintiff has made out a prima facie case for grant of the limited interim relief as prayed for and such interim relief would in no way prejudice the present Defendants since the STSs against them are not being revived for the present and no similar STSs against any of them is permitted to be filed by the present Plaintiff during the pendency of the present appeals. The balance of convenience is, therefore, in favour of the Plaintiff. Further, the impugned order if not made inapplicable to pending and proposed suits of the Plaintiff against other parties, would cause undue hardship to the Plaintiff as the in limine dismissal of such suits as non-maintainable would be imminent. HC directs that during the pendency of these appeals, the impugned judgment of the learned Single Judge will not constitute a precedent to bar other STSs of the Plaintiff, whether pending or to be filed against parties (other than the Respondents/Defendants in these appeals) seeking the relief of restraint of passing off qua its registered design used as a trademark/trade dress, get up, presentation of the products through its packaging, and so on.   

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