Delhi High Court Five-Judge Bench Overrules Mohan Lal and Upholds Maintainability of Composite Suits for Design Infringement and Passing Off

Summary

A five-judge bench of the Delhi High Court delivered a landmark judgment overruling the earlier three-judge bench decision in Mohan Lal v. Sona Paint & Hardwares, holding that plaintiffs can maintain composite suits combining design infringement and passing off claims against the same defendant. The Court clarified that when both causes of action arise from the same transaction and involve common questions of fact and law, they can be joined under Order II Rule 3 of the CPC to avoid multiplicity of proceedings and promote judicial efficiency.

Introduction

On December 14, 2018, a five-judge bench of the Delhi High Court delivered a significant judgment in Carlsberg Breweries v. Som Distilleries and Breweries Ltd., addressing the critical question of whether design infringement and passing off claims can be combined in a single composite suit. This ruling effectively overruled the earlier three-judge full bench decision in Mohan Lal v. Sona Paint & Hardwares, which had held that such claims could not be consolidated.

The case arose from a suit filed by Carlsberg Breweries complaining of infringement of its registered bottle design as well as passing off of its trade dress in respect of the bottle and overall get-up of the "Carlsberg" mark. The defendant objected to the framing of the suit, arguing that per the Mohan Lal judgment, the two claims could not be combined in one suit. This fundamental question of maintainability was referred to a special five-judge bench for authoritative determination.

Key Issue Before the Court

The central issue before the five-judge bench was:

Whether in one composite suit, there can be joinder of two causes of action: (i) infringement by the defendant of a registered design under the Designs Act, 2000, and (ii) passing off by the defendant of its goods/articles as those of the plaintiff?

Legal Framework: Joinder of Causes of Action

The joinder of two or more causes of action in a single suit is governed by Order II Rule 3 of the Code of Civil Procedure, 1908 (CPC), which permits plaintiffs to unite several causes of action against the same defendant to save cost, time, and effort.

The Mohan Lal Precedent

The earlier case of Mohan Lal v. Sona Paint & Hardwares had held that design infringement and passing off claims could not be combined, reasoning that they were fundamentally different in nature—one being statutory (design infringement) and the other common law (passing off). The Mohan Lal bench relied on Supreme Court precedents in Dabur India Limited v. K.R. Industries and M/s. Dhodha House v. S.K. Maingi.

The Five-Judge Bench's Analysis

1. Erroneous Application of Precedents

The five-judge bench held that Mohan Lal erroneously applied the Dabur and Dhodha House precedents. Both those cases were primarily concerned with territorial jurisdiction issues, not the maintainability of composite suits per se. Neither case held that composite suits are impermissible where common questions of law and fact arise from the same transaction.

2. Common Questions of Law and Fact

The Court relied on the Supreme Court's ruling in Prem Lata Nahata v. Chandi Prasad Sikaria, which held that the main purpose of joining suits is to save cost, time, and effort. The Court derived the principle that if the substantial evidence of two causes of action would be common, then there can be joinder under Order II Rule 3 CPC.

3. Same Transaction Test

Applying the precedent in M/s. Jay Industries v. M/s. Nakson Industries (which allowed joinder of trademark and copyright claims arising from the same sale transaction), the Court held that where design infringement and passing off claims arise from the same transaction of sale, they involve common questions and evidence, including:

• The plaintiff's registered design and its features
• The defendant's allegedly infringing design
• Comparison between the two designs
• Evidence of sales and use in commerce
• Evidence of market confusion and consumer perception

Final Holdings

1. Composite suits combining design infringement and passing off claims are maintainable when both causes of action arise from the same transaction and involve common questions of law and fact.
2. Mohan Lal v. Sona Paint & Hardwares is overruled to the extent it held that such composite suits are not maintainable.
3. Order II Rule 3 CPC permits joinder of design infringement and passing off causes of action when they satisfy the requirements of common questions and same transaction.

Significance and Practical Implications

1. Procedural Efficiency and Cost Savings

The judgment upholds the fundamental rationale behind joinder provisions—avoiding needless multiplicity of suits. With ever-escalating IP litigation costs, this ruling brings massive relief to plaintiffs through:

• Reduced litigation costs (single filing, single trial)
• Faster resolution (no parallel proceedings)
• Consistent findings on common factual issues
• Reduced burden on courts

2. Comprehensive IP Protection Strategy

Design proprietors can now pursue comprehensive protection strategies combining statutory and common law remedies in a single proceeding, providing layered protection addressing both technical piracy and commercial misrepresentation.

3. Alignment with Commercial Reality

The judgment recognizes that when a defendant copies a registered design and uses it in trade, that single act simultaneously infringes the statutory monopoly and creates market confusion—it would be artificial and wasteful to require separate suits.

4. Judicial Hierarchy and Precedential Value

As a five-judge bench decision, this judgment carries significant precedential weight, overruling the earlier three-judge bench and establishing clear, binding precedent for Delhi High Court's jurisdiction.

5. Strategic Litigation Guidance

Recommended Strategy for Practitioners:

• File composite suits combining design infringement and passing off claims where both arise from the same infringing conduct
• Plead both causes of action clearly while highlighting common evidence
• Present evidence showing the same transaction gives rise to both claims
• Demonstrate common questions of law and fact to justify joinder

6. Reconciling with Mohan Lal

This judgment does not completely overturn all aspects of Mohan Lal. The holdings regarding maintainability of design infringement suits against other registered proprietors and availability of passing off remedies for registered designs remain valid. What is specifically overruled is the prohibition on combining these claims in a single composite suit.

Conclusion

The Carlsberg Breweries v. Som Distilleries and Breweries Ltd. judgment represents a significant advancement in IP litigation practice in India. By overruling the restrictive approach in Mohan Lal and affirming the maintainability of composite suits, the five-judge bench has promoted judicial efficiency, reduced litigation costs, recognized commercial reality, and provided clear guidance to IP practitioners.

This decision reflects a pragmatic and progressive approach to IP litigation, balancing the interests of rights holders in obtaining comprehensive relief, defendants in defending consolidated claims efficiently, and the public interest in expeditious and economical administration of justice.

For design proprietors and IP practitioners, this judgment provides a clear roadmap: where design infringement and passing off arise from the same transaction and involve common evidence, they should be pursued together in a composite suit to maximize efficiency, minimize costs, and ensure consistent adjudication of related claims.

 

Trademark (Amendment) Rules 2014 notified

The Trademark (Amendment) Rules 2014 have been notified and w.e.f. August 1, 2014, the Govt fee for filing Trademark Application in India has been increased to INR 4000 from earlier 3500. There is approx 15% increase in Govt. fee towards filing Now. Earlier in December 2010 the Govt fee was increased from INR 2500 to INR 3500.

Further, the Govt fee towards express examination has also been increased from INR 17500 to INR 20000.

Supreme Court held that Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation

While considering under Section 32 of Constitution of India in Criminal Writ Petition no. 68 of 2008 titled Lalita Kumari Vs. State of UP & Ors. as to whether “a police officer is bound to register a First Information Report (FIR) upon receiving any information relating to commission of a cognizable offence under Section 154 of the Code of Criminal Procedure, or the police officer has the power to conduct a “preliminary inquiry” in order to test the veracity of such information before registering the same?” and in view of the conflicting decisions of Supreme Court on the issue, larger bench (5 Judge Bench) of the Supreme Court held that

(i) Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is

permissible in such a situation.

(ii) If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.

(iii) If the inquiry discloses the commission of a cognizable offence, the FIR must be registered. In cases where preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week. It must disclose reasons in brief for closing the complaint and not proceeding further.

(iv) The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed.  Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence.

(v) The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.

(vi) As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under:

(a)Matrimonial disputes/ family disputes

(b)Commercial offences

(c) Medical negligence cases

(d)Corruption cases

(e) Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months delay in reporting the matter without satisfactorily explaining the reasons for delay.

The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry.

(vii) While ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time bound and in any case it should not exceed 7 days. The fact of such delay and the causes of it must be reflected in the General Diary entry.

(viii) Since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, we direct that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said Diary and the decision to conduct a preliminary inquiry must also be reflected, as mentioned above.

DOCTRINE OF ESTOPPEL BY ACQUIESCENCE OR WAIVER FOR INFRINGEMENT

Acquiescence as a defense:

Section 33 (1) of the Trademarks Act, 1999 provides that if the earlier Registered Proprietor has acquiesced for a continuous period of 5 years in the use of a registered trademark, being aware of that use, he is not entitled to either seek invalidation of such later mark or oppose its use in relation to goods or services in relation to which it has been so used, unless registration of such mark was applied in bad faith.

The essential for defense of acquiescence shall be:

(a)    The mark should be registered

(b)   The earlier registered proprietor should be aware of use of such registered mark for a period of 5 years or more

(c)    The subsequent Applicant/ registered proprietor has used such registered trademark for a continuous period of 5 years

(d)   The subsequent mark if registered cannot be cancelled unless registration was applied in bad faith

(e)    The subsequent mark cannot be opposed for usage in respect of goods or services in respect of which it has been so used, unless application was made in bad faith

This section clearly establishes that if there is acquiescence for a continuous period of 5 years, the usage of such mark cannot be stopped by earlier registered proprietor. Though any application or registration of such mark can be challenged either in rectification or opposition proceedings if such application was made in bad faith.

Where such doctrine applies, the proprietor of later trademark is not entitled to oppose use of the earlier registered mark or exploitation of the earlier right. Burden of proof is on the defendant.

Acquiescence vs. Consent

Acquiescence is implied consent by remaining silent spectator. Section 30 (2) (c) of the Trademarks Act provides that express or implied consent by the registered proprietor or registered as to use of the mark is a defense to infringement. But as the infringement is a continuous process this consent may be withdrawn subsequently and such acts would amount to infringement unless a defense of acquiescence is available.  In other words implied consent of 5 years can be termed as acquiescence.

Laches:

Failure to assert one’s rights in a timely manner can result in a claim being barred by laches. Laches is an equitable defense or doctrine asserted in litigation. It is defined as an "unreasonable delay pursuing a right or claim by one party in a way that prejudices the opposite party". The person invoking laches is asserting that an opposing party has "slept on its rights," and that, as a result of this delay, circumstances have changed such that it is no longer just to grant the equitable relief sought for such as an interim or temporary injunction. Laches is a form of estoppel for delay. A successful defense of laches will find the court denying the request for equitable relief. However, even if equitable relief is not available, the party may still have an action at law if the statute of limitations has not run out.

The Hon’ble Supreme court of India in Khoday Distilleries Limited vs. The scotch whisky association and others, bared challenge to “peter scot” on principles of acquiescence and/ or waiver.

 

Appellant i.e. Khoday Distilleries Limited hereinafter “Khoday” was a company incorporated under the Companies Act, 1956 and manufactured whisky under the mark “Peter Scot” since May, 1968.  Its application for registration of its mark was accepted and allowed to proceed with the advertisement, subject to the condition that the mark would be treated as associated with Reg. T.M. No.249226-B. The said trade mark was subsequently registered. Respondents came to know of the appellants mark on or about 20th September, 1974. They filed an application for rectification of the said trade mark on 21st April, 1986.  Appellant by way of affidavit explained coining of the mark “Peter Scot” where “Peter” was his father’s name and “Scot” was his nationality. Another factor behind the coining of this brand name was the internationally known British explorer, Captain Scott, and his son Peter Scott, who is widely known as an artist, naturalist and Chairman of the World Wildlife Fund. 

 

However, the application for rectification was allowed. The appellant then preferred an appeal before the High Court. One of the main ground of appeal was that in one of the affidavit filed on behalf of the respondents affirmed by Ian Barclay it was stated that the respondents were aware of infringement of mark as far back in 1974 but as no action was taken in relation thereto till 1986, therefore the application for rectification was barred under the principles of waiver and acquiescence.

 

A learned Single Judge of the High Court dismissed the said appeal and as regards the plea of acquiescence held that the acquiescence if it is to be made a ground for declining to rectify, must be of such a character as to establish gross-negligence on the part of the applicant or deliberate inaction which had regulated in the appellant incurring substantial expenditure or being misled into the belief that the respondents though entitled to, had deliberately refrained from taking any action and were unmindful of the use of the mark by the person in whose name it was registered and held that the facts of this case are not such as to warrant the conclusion that there has been acquiescence.

 

On an appeal a Division Bench of the High Court, dismissed the said appeal and appellant approached the Supreme Court against said order. 

 

Supreme Court relied on ratio laid down by Oliver, L.J., in Taylor Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. [ (Note) [1981] 2 W.L.R.] 576

“Of course, estoppel by conduct has been a field of the law in which there has been considerable expansion over the years and it appears to me that it is essentially the application of a rule by which justice is done where the circumstances of the conduct and behaviour of the party to an action are such that it would be wholly inequitable that he should be entitled to succeed in the proceeding.”

Supreme Court observed that “Thus, in cases involving equity or justice also, conduct of the parties has also been considered to be a ground for attracting the doctrine of estoppel by acquiescence or waiver for infringement.”

The ratio laid down in M/s. Power Control Appliances and others v. Sumeet Research and Holdings, [(1994) 2 SCC 448 ] was relied, where Supreme Court held :-

26. Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches. In Harcourt v. White Sr. John Romilly said: It is important to distinguish mere negligence and acquiescence. Therefore, acquiescence is one facet of delay. If the plaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J.G.) & Co. v. Boehm. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant as was laid down in Rodgers v. Nowill.

Supreme Court observed that the question again came up for consideration in Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and others, [(2006) 8 SCC 726] wherein it was held :-

103. Acquiescence is a facet of delay. The principle of acquiescence would apply where: (i) sitting by or allowing another to invade the rights and spending money on it; (ii) it is a course of conduct inconsistent with the claim for exclusive rights for trade mark, trade name, etc.

The delay by itself, however, may not be necessarily a ground for refusing to issue injunction.

It was opined:-

106. The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lays by in relation to the acts of another person and in view of that assent or laying by and consequent acts it would be unjust in all the circumstances to grant the specific relief.

It was furthermore observed:-

108. Specific knowledge on the part of the plaintiff and prejudice suffered by the defendant is also a relevant factor. (See Spry on Equitable Remedies, 4th Edn., p. 433.)

Taking into considerations all peculiar facts of the case as well as precedents laid down by Supreme Court it was observed that stand of respondents to object to the evidence that was produced before the learned Single Judge with regard to the increase in the volume of sale of Peter Scot, on the other hand urging that if a comparison is made of the Indian whisky and Scotch Whisky it would appear that some Indian whiskies are costlier than some of the Scottish brands.  The stand taken by the respondents is self-contradictory and is not fair and Supreme Court was of opinion that action of the respondents is barred under the principles of acquiescence and/ or waiver. 

 

As regards the question as to consideration is as to whether the use of the term Scot would itself be a sufficient ground to form an opinion that the mark Peter Scot is deceptive or confusing. The Supreme Court relied upon precedents operating in Australia and United States of America.

 

The Supreme Court observed that they are concerned with the class of buyer who supposed to know the value of money, the quality and content of Scotch Whisky. Who are supposed to be aware of the difference of the process of manufacture, the place of manufacture and their origin.  Trademark Registry, the learned Single Judge as also the Division Bench of the High Court, therefore, failed to notice the distinction, which is real and otherwise borne out from the precedents operating in the field. The SC further observed that had these tests been applied the matter might have been different.  In a given case probably SC would not have interfered but intend to do so only because wrong tests applied led to a wrong result. 

 

The Supreme Court allowed the appeal and dismissed the impugned judgement of High Court, thereby cancelling the rectification proceedings in respect of “Peter Scot’ mark abs reinstating the Registration in favour of Appellant.

Delhi High Court Three Judges Bench Recognizes Infringement and Passing Off Remedies for Registered Design Proprietors

Summary

The Delhi High Court delivered a landmark judgment affirming that holders of registered designs can file infringement suits against other registered proprietors, invoke common law passing off remedies even without explicit statutory provisions in the Designs Act, and pursue both remedies concurrently (though not in a single consolidated suit). This decision significantly strengthened legal protections for design proprietors by harmonizing statutory and common law remedies.

Introduction

The case of Mohan Lal v. Sona Paint & Hardwares, adjudicated by the Delhi High Court on May 15, 2013, marks a significant development in the interpretation of the Designs Act, 2000. This judgment delves into the complexities surrounding the infringement of registered designs, the applicability of common law remedies such as passing off, and the procedural aspects of filing composite suits involving both statutory and common law claims.

Parties Involved

Plaintiffs:

• Mohan Lal (proprietor of Mourya Industries)
• Micolube India Ltd. (MIL)

Defendants:

• Sona Paints & Hardware (SPH) and other related parties

Key Issues Before the Court

The Court was called upon to determine three critical questions of law:

1. Whether a suit for infringement of a registered design is maintainable against another registered proprietor under the Designs Act, 2000?
2. Whether the remedy of passing off is available to a holder of a registered design in the absence of express statutory provisions within the Designs Act?
3. Whether passing off actions can be combined with infringement actions under the Designs Act in a single suit?

Summary of the Judgment

The Delhi High Court resolved the three central issues as follows:

Issue I: It is maintainable for a holder of a registered design to file a suit against another registered proprietor for infringement. The Court held that the statutory language of Section 22 does not exclude registered proprietors from being sued for infringement.

Issue II: A holder of a registered design can invoke the common law remedy of passing off, even in the absence of explicit statutory provisions in the Designs Act, provided the requisite elements of a passing off action are satisfied. The Court affirmed that common law remedies coexist with statutory protections.

Issue III: While passing off actions and statutory infringement suits can be filed concurrently, they cannot be consolidated into a single suit due to their distinct causes of action. However, courts may choose to hear them simultaneously for procedural efficiency.

Analysis and Legal Reasoning

Precedents Cited

The judgment extensively reviewed prior cases, highlighting a dichotomy in judicial perspectives:

1. Tobu Enterprises Pvt. Ltd. v. Megha Enterprises (1983): Held that infringement suits against other registrants are not permissible, advocating for design cancellation instead.

2. Joginder Metal Works Pvt. Ltd. v. Mohan Lal Ji (1985): Suggested that passing off remedies are excluded under the Designs Act.

3. Alert India v. Naveen Plastics (1997): Contradicted Tobu Enterprises by allowing passing off actions alongside registered design infringements.

4. Smithkline Beechem Plc v. Hindustan Lever Ltd. (1999): Affirmed the availability of passing off actions even when designs are registered under the Designs Act.

5. Gorbatschow Wodka KG v. John Distilleries Ltd. (2011): Reinforced the position that design registration does not negate passing off remedies.

Statutory Interpretation

The Court navigated through the statutory language of the Designs Act, emphasizing key provisions:

Section 22 of the Designs Act: The Court noted that Section 22 grants broad applicability by stating "any person" can be liable for piracy of a registered design. The statutory language does not explicitly exclude another registered proprietor from being sued for infringement. The Court held that if Parliament intended to exclude registered proprietors, it would have expressly stated so.

Design vs. Trademark: While designs pertain to the aesthetic aspects of goods (shape, pattern, ornamentation), trademarks act as indicators of origin. The Court acknowledged that designs could overlap with trademarks in function and commercial significance, but maintained that they attract distinct legal remedies under different statutory regimes.

Passing Off Remedies: Despite the Designs Act not explicitly recognizing passing off (unlike Section 27(2) of the Trade Marks Act, 1999), the Court held that common law remedies remain applicable to registered designs. The Court reasoned that:

• Passing off is a common law tort that predates statutory intellectual property regimes
• The absence of express exclusion does not mean exclusion by implication
• Design proprietors can acquire goodwill and reputation in their designs through commercial use
• Misrepresentation and confusion in the marketplace can occur regardless of design registration status
• All essential elements of passing off (goodwill, misrepresentation, damage) can be proven in design disputes

Composite Suits: Recognizing that infringement and passing off stem from different causes of action—one being statutory and strict liability, the other being common law and tort-based—the Court concluded they should be treated as separate suits, even if filed concurrently. However, for judicial efficiency and avoiding multiplicity of proceedings, courts may hear both matters together.

Key Holdings

1. Infringement Suits Against Registered Proprietors Are Maintainable

The Court held that the holder of a registered design can maintain an infringement suit under Section 22 of the Designs Act, 2000 against another person who is also a registered proprietor of a similar or identical design. The Court rejected the restrictive interpretation that infringement suits can only be brought against unregistered parties.

The Court reasoned that:

• Section 22 uses the broad term "any person" without carving out exceptions for registered proprietors
• If one registration is invalid (lacking novelty or originality), the holder of a valid earlier registration should be able to enforce their rights through infringement proceedings
• The validity of the defendant's registration can be challenged as a defense in the infringement suit under Section 22(3)
• Requiring separate cancellation proceedings would create unnecessary procedural hurdles and delay effective enforcement

2. Passing Off Remedies Are Available for Registered Designs

The Court conclusively held that common law passing off remedies are available to protect registered designs, even though the Designs Act does not contain an express saving provision like Section 27(2) of the Trade Marks Act.

The Court's reasoning included:

• Common law remedies are not excluded by statute unless expressly stated: The absence of a provision like Section 27(2) does not imply exclusion; it simply means the legislature did not feel the need to expressly preserve what already exists in common law.
• Designs can acquire distinctive character and goodwill: Through extensive use and commercial success, designs can become associated with a particular manufacturer or trader, creating protectable goodwill.
• Protection against misrepresentation is necessary: If a competitor uses a similar design to create confusion and misappropriate goodwill, passing off provides a remedy regardless of registration status.
• Precedent supports concurrent remedies: Multiple prior decisions (Alert India, Smithkline Beechem, Gorbatschow Wodka) have recognized passing off actions in design disputes.
• Designs and trademarks serve overlapping functions: While distinct in law, both can serve as indicators of commercial origin and quality, justifying similar protection against misrepresentation.

3. Concurrent But Separate Proceedings

The Court held that while infringement and passing off claims can be pursued concurrently, they should not be consolidated into a single suit because:

• Different causes of action: Design infringement is based on statutory rights, while passing off is based on common law tort principles
• Different elements of proof: Infringement requires proof of design piracy; passing off requires proof of goodwill, misrepresentation, and damage
• Different remedies and relief: Each cause of action carries its own specific remedies under law
• Procedural clarity: Keeping them separate ensures clear pleadings, focused evidence, and proper legal analysis

However, the Court noted that for practical efficiency and to avoid duplication, both suits can be heard together by the same court, with separate judgments issued for each cause of action.

Impact and Significance

This judgment significantly clarifies the scope of legal remedies available to design proprietors, ensuring:

1. Enhanced Protection Against Infringement: Design proprietors can now pursue infringement actions even against other registered proprietors, closing a potential loophole that could have been exploited by obtaining competing registrations.

2. Availability of Common Law Remedies: The recognition of passing off remedies ensures that design proprietors can protect the goodwill and reputation associated with their designs, not just the statutory monopoly. This is particularly important for:

• Designs that have acquired secondary meaning in the marketplace
• Protecting against unfair competition and consumer confusion
• Extending protection beyond the limited statutory term through acquired goodwill
• Addressing situations where design registration may be challenged or expire

3. Procedural Clarity: The guidance on concurrent but separate suits discourages improper consolidation of distinct legal claims, ensuring:

• Clear identification of causes of action
• Proper pleading and evidence presentation
• Appropriate remedies for each claim
• Judicial efficiency through coordinated hearings

4. Harmonization of Statutory and Common Law Protections: By recognizing both statutory design rights and common law passing off, the judgment creates a comprehensive protection framework that addresses both the technical aspects of design piracy and the commercial realities of market confusion and goodwill misappropriation.

5. Alignment with Trade Mark Law Principles: The judgment brings design law closer to trademark law in recognizing that visual features can serve as indicators of commercial origin and can acquire protectable goodwill through use.

Complex Concepts Simplified

Registered Design

A registered design refers to the unique visual features of a product, such as its shape, pattern, or ornamentation, that are registered under the Designs Act, 2000. Registration grants the proprietor exclusive rights to use and prevent others from using similar designs for the period of protection (initially 10 years, extendable to 15 years).

Infringement Suit

An infringement suit under the Designs Act allows the design proprietor to seek legal remedies if another party uses their registered design without permission. This is a statutory action based on the exclusive rights granted by registration. Remedies include injunctions to stop the infringement, damages or account of profits, and delivery up of infringing articles.

Passing Off

Passing off is a common law remedy used to prevent one party from misrepresenting their goods or services as those of another, thereby protecting the goodwill and reputation built by the authentic party. To succeed in a passing off action, the plaintiff must prove:

1. Goodwill: That the design has acquired reputation and distinctiveness in the market
2. Misrepresentation: That the defendant's use creates confusion or deception among consumers
3. Damage: That the plaintiff has suffered or is likely to suffer damage to goodwill or business

Composite Suit

A composite suit involves multiple legal claims within a single lawsuit. In the context of this judgment, attempting to combine an infringement suit with a passing off action into one lawsuit is not permissible due to their distinct legal bases (one statutory, one common law). However, both can be filed as separate suits and heard together for efficiency.

Practical Implications for Design Proprietors

For Litigation Strategy:

• Design proprietors should consider filing both infringement and passing off claims to maximize protection
• Even if design registration is challenged, passing off provides an independent basis for relief
• Infringement suits can now be pursued against competing registered proprietors without first obtaining cancellation
• Evidence of goodwill, reputation, and market confusion should be gathered to support passing off claims

For Design Protection:

• Design proprietors should build and document goodwill in their designs through marketing, sales, and brand association
• Early detection and action against similar competing designs is advisable
• Registration remains important for statutory remedies, but common law protection extends beyond registration

For Competing Businesses:

• Obtaining a design registration does not provide immunity from infringement suits by earlier registrants
• Even without registration challenges, use of similar designs may expose businesses to passing off liability
• Due diligence should include searching for both registered designs and unregistered designs with market goodwill

Conclusion

The Mohan Lal v. Sona Paint & Hardwares judgment serves as a cornerstone in the interpretation of the Designs Act, 2000. By affirming the maintainability of infringement suits against other registered proprietors and recognizing the applicability of common law remedies like passing off, the Delhi High Court has fortified the legal protections available to design owners.

Furthermore, the clarification on procedural aspects regarding composite suits ensures legal clarity and efficiency. This decision not only harmonizes statutory and common law protections but also empowers design proprietors to more effectively safeguard their creative and commercial interests.

In the broader legal landscape, this judgment underscores the judiciary's role in evolving intellectual property laws to address contemporary commercial realities, thereby fostering an environment conducive to innovation and fair competition. The decision recognizes that designs serve not just aesthetic functions but also commercial and branding functions, deserving comprehensive legal protection through both statutory and common law mechanisms.

Nothing FAIR In FRAND (Ericsson- Micromax Patent Litigation)

Ericsson filed patent infringement litigation against Micromax Informatics Ltd. and Mercury Electronics Ltd. for infringing its patents. Essentially these patents relate to use of speech codec (combination of speech coder and speech decoder) for coding the voice signal (in a compressed form) from the caller end and transmitting it via a radio link as coded/ compressed speech frames to the receiver end where it is decoded. Typically in a discontinuous transmission no coded speech frames are send while speaker is inactive. Here transmitter at regular interval sends speech parameter suitable for generation of comfort noise in the decoder.

Ericsson states in its patents that speech coders and decoders are conventionally provided in radio transmitters and radio receivers, respectively and cooperate to permit speech (voice) communications between a given transmitter and receiver over a radio link. A mobile phone is a conventional radio communication device comprising a Radio transmitter having a speech coder (for sending coded voice frames) and a radio receiver having a speech decoder.

Now various Patents that appear to have been asserted are discussed herein below:

Patent no. 203716 (IN/PCT/2001/00551/MUM): A method and apparatus for preserving perceptually relevant non-speech information in an audio signal

This intervention relates to method for first determining whether audio signal is considered to be speech or noise formation (well known) and then determining whether the audio signal includes non-speech information that is perceptually relevant to a listener and selectively overriding first determination of speech or noise in response to second.

The method (First IC) herein only determines and overrides determination carried under first step. It may either treat the non-speech information as to noise and non-relevant to listener or it may consider such non-speech information as relevant to listener. In both instances the claims are only determining and how they are determining it is not claimed at all. The first determination is prior art and consequent the second determination is nothing but an obvious determination, the moment there is determination as to audio signal as to speech or noise, the determination of relevancy begin then and there itself. Relevancy of such non-speech information is a subjective term and may vary from individual to individual.

The apparatus IC similarly refers to an apparatus that performs above method. Conventionally a mobile phone has all those components that are referred to in such an apparatus. Non tangible component such as audio signal are included therein in the apparatus. The Apparatus as such lacks novelty and is obvious for same reasons as the method claim.

The LPD in relation of above Patent was issued on January 8, 2007.

Patent no. 213723 (IN/PCT/2001/00552/MUM): Method and apparatus for generating comfort noise in a speech decoder

This invention from the title appears to relate to invention for generating comfort noise, but in effect all the claims of this Patent are identical to claims granted in above Patent.

The LPD in relation of above Patent was issued on February 1, 2008.

The International filing date is shown as November 12, 1999 in E-register of Patents, it is shown as November 8, 1999 in the LPD issued by Patent office. The Corresponding PCT Application no. is PCT/SE/1999/002073 (with International filing dated as November 12, 1999) and its national phase details on WIPO identify both Patent Application no. i.e. IN/PCT/2001/00551/MUM as well as IN/PCT/2001/00552/MUM. Apart from India the corresponding PCT national phase applications was filed twice only in South Africa as this is the country that lacks substantial examination system, but India does have substantial examination system, yet it granted identical claims in both Applications. The PCT claims are identical to claims granted in both Applications in India as available in respect of above Patent from Indian Patent office website. All these claims are silent about comfort noise generation as asserted by Ericsson.

It raises serious questions as to why identical Patents are granted to Ericsson in this matter, and raises serious questions about nature of Examination carried out by the Examiner concerned and Patent office.  

The Patent No. 213723 is very vital for Ericsson in the above litigation as it was the major claim asserted by Ericsson in their initial communication to Micromax alleging infringement. Ericsson had claimed that mapping of the above Patent (that time they did not identify the Patent no. but only the Patent Application no.) claims to the AMR speech codec and claimed that Micromax model X332 is capable to supporting AMR speech and can set up AMR speech class successfully. The claims identified in the said communication refer to different set of claims then what are made available by Patent office on their website or what was there on PCT Application when filed. Later on other Patents were also asserted but without any detailed mapping like the above Patent.      

The technology is stated to consume comparatively lesser bandwidth/space and allows the service provider to serve more customers at one point of time. This technology can also be used to cut off the noise from the caller side so that when decoded at receive side, the voice signal is clear and with least background noise. It   also suggest in one of the embodiment of invention, that some selective voice frames (dividing voice signal to frames/ sub frames), determining the noise frames and selectively avoiding transfer of such voice frames (to save lesser bandwidth and space and allowing telecom company to have more user at a time) and generating matching voice frames at the receiver end.. As the patent claims though claiming method and apparatus are essentially system based claims suggesting a particular method of performing the invention employing various components/ apparatus and not all of the apparatus may belong to the Ericsson. All these claims disclose is need and how this need can be fulfilled (receiving, coding and decoding), can be assumed by person skilled in art (I would say semi-skilled in art). It needs to be checked whether they have claimed how their coder and decoder function and if there is any novelty in such coder and decoder, considering Section 3(k) of the Indian Patents Act.

Their invention allow the telecom company to find out which one of the subscriber is using the technology and accordingly the telecom company would prefer those using the technology so that it can accommodate more subscribers at a time (those not using the technology would be dumped or asked to wait till the no. of active subscribers reduces).

Do we need to look at into who is the beneficiary of these inventions? First thing that comes into mind is telecom service provides and they are not included in this litigation (as they are already managing the telecom services of these service providers). An invention that requires involvement of at least two mobiles (subscribers) both equipped with coder and decoders and at least one telecom tower, can an infringement action lie against mobile company alone. The system and methodology is incomplete till all participants are involved. If an action can be performed collectively, then the liability should be collective in nature.       

Second, if Micromax happen to be honest and bonafide purchaser of Chip/ circuit board and it is within the express knowledge of the Ericsson that their technology (essential part is use of coding and decoding algorithms) is being manufactured and sold by said company (I believe it is also made one of the defendant in the suit). But Ericsson chose to ignore the small company as the royalty they would be getting there would be minimal compared to if they catch the mobile company (as cost of mobile would be higher than the chip/ circuit board).

The single bench of the Delhi High Court passed an ex parte interim order against Micromax and authorized seizure of documents from Micromax’s office regarding the sales and import of the mobile phones using said technology. Micromax preferred an appeal but the Divisional bench directed them to approach Single bench and approach only if they are not heard within 30 days as per the provisional of Law (CPC).  Constrained that their sale would be effected during the interregnum period, Micromax entered into an interim arrangement with the Ericsson. It appears that royalty rates are agreed between 1.25% to 2% of the sale price. The single bench referred the matter for meditation and Justice A.P. Shah (Retd.) was appointed as a mediator for proceedings.

Micromax should go against Ericsson for these 8 Patents and assertion of infringement. First of all, when they are rightful purchaser of the chip from a third party and had Ericsson sued that company alone their 1-2% royalty rates would be insignificant (as the cost of chip is comparatively low), so they come after the bigger guy to seek bigger royalty. This issue needs to be examined, is this suit bad for non-joinder for necessary party as telecom service provider is not made party here by Ericsson (question is can they make them parties randomly as it is in subscriber’s hand which telecom company they choose) and secondly can they assert patent infringement against Micromax just because some of their mobile have those chips which when used in a mobile together with communication system of service provider (at both end) makes a system that is actually claimed by Ericsson. In totality their so called system cannot work unless the signals are coded and decoded and it requires the chip with same technology at both ends (with hardware requirements of the service provider).

If this litigation is carried forward by Micromax, this could be a landmark judgment in evaluating system claims.

Novartis Patent for Beta Crystalline form of Imatinib Mesylate rejected by Supreme Court of India

Supreme Court of India while hearing the Appeal ( as a matter of exception this appeal was admitted and heard, though all appeal against Order of IPAB are to be heard by High Court first) preferred by Novartis AG against the order of Intellectual Property Appellate Tribunal (IPAB) rejected the product Patent rights for Beta Crystalline form of Imatinib Mesylate for failing in both test of invention (under Section 2(1)(j) & 2(1)(ja) as well as patentablity (under Section 3(d)). The Court consequently allowed the counter-appeal filed by two of the respondents i.e. Natco Pharma Ltd. and Cancer Patients Aid Association.

There is no separate finding on the counter-appeals preferred by Natco Pharma Ltd. and Cancer Patients Aid Association therefore it can be assumed that Novartis AG still retains the process Patent rights for manufacturing Beta Crystalline form of Imatinib Mesylate. 

It would be essential to go into the brief history of the Patent Application filed by Novartis AG for Beta Crystalline form of Imatinib Mesylate and its prosecution in India: 

1.         On July 17, 1998 Novartis AG filed Patent Application in India i.e 1602/MAS/1998, claiming priority from Swiss Patent Application dated July 18, 1997 for invention titled "Crystal modification of N- phenyl-2-pyrimidineamine derivative, process for its manufacturer and its use. The said Patent Application was opposed by way of Pre-Grant Opposition under Section 25(1) of Indian Patents Act by Cancer Patients Aid Association, Natco Pharma Ltd., Cipla Ltd, Ranbaxy Laboratories Ltd., Hetero Drugs Ltd. 

2.         Vide order dated January 25, 2006 the Assistant Controller of Patents rejected the Patent Application for following grounds

(i) Anticipated by Zimmermann Patent  (US Patent no. 5, 521,184, continuation in part of US Patent Application serial no. 08/042,232 dated September 9, 1993) and article published on May 1996 in “Nature Medicine” and Patent extension certificate issued by USPTO that mentions Imatinib Mesylate (Gleevac) as product. Also on the satisfactory proved by Natco pharma that salt normally exists in beta crystalline form which is most thermodynamically stable product.

(ii) Obvious for reasons of prior publication as mentioned above

(iii) Non Patentable under of Section 3(d) of Indian Patents Act, claims new form of a known substance without any significant improvement of efficacy.

(iv) Claiming wrong priority as Switzerland was not a conventional country on date of making of application

3.         Novartis AG filed Writ petitions against the said order of Assistant Controller of Patents in Chennai High Court as at that time the IPAB was not established, vide order dated February 23, 2007 the High Court converted said writ petitions to appeal.

4.         Simultaneously Novartis AG itself and through its POA holder in India filed two writ petitions challenging the provision of Section 3 (d) of the Indian Patent Act, as being unconstitutional and against the TRIPS obligation of India

5.         During pendency of writ petitions on April 3, 2007 the Govt. of India brought provisions as to appeal to IPAB with effect from April 2, 2007 and consequently the 5 appeals were transferred by High Court to IPAB vide order dated  April 4, 2007.

6.         The Technical member (Patents) to the IPAB previously hold post of the Controller General of Patents, therefore Novartis AG filed Petitions for ceasing the Technical member (Patents) from hearing the appeals. By Order dated July 20, 2007 the petitions were dismissed relying on doctrine of necessity.

7.         Novartis AG challenged the order by a writ petition before the Chennai High Court and the High Court directed IPAB to constitute a special bench of Chairman, Vice Chairman to hear the appeals and for seeking assistance of Scientific advisers, if they found fit. 

8.         Natco Pharma filed a SLP before Supreme Court against said order for appointment of new Technical Member to hear instant appeals because of involvement of high technology in the matter as well as for statutory requirement of presence of technical member in the Board having special qualification. Supreme Court vide order dated 1, 2008 directed reconstitution of IPAB including Dr. P.C. Chakraborti, Assistant Controller as Technical Member and to hear appeals on daily basis from November 3, 2008.

9.         IPAB vide Judgment dated June 26, 2009 allowed only the process claims for manufacture of Beta crystalline form. 

10.       Against the impugned judgment by IPAB, Novartis AG approached the Supreme Court directly and after hearing all the parties, a very detailed, well-reasoned order was passed by Supreme Court of India on April 1, 2013.

While adjudicating on the issue Supreme Court considered interplay between qualifying criteria of invention and criteria of patentability of an invention. It had to consider if the product qualifies as “invention” within the meaning of clauses (j) and (ja) of section 2(1), can its patentability still be questioned and denied on the ground that section 3(d).

Few historic date concerning the development of product Imatinib, Imatinib Myselate and Beta crystalline form of Imatinib Myselate are as follows:

April 28, 1994                        Application for derivatives of N-Phenyl-2 pyrimidine-amine including Imatinib filed before USPTO by Jurg Zimmermann

January 1, 1995                     On March 26, 1999 Parliament passed the Patents (Amendment) Act 1999 (Act No. 17 of 1999) which amended the provisions of the Patents Act 1970 retrospectively, with effect from January 1, 1995, the date when the TRIPS Agreement came into force. By the Amendment Act of 1999, section 5 of the Parent Act was amended to provide for making “a claim for patent of an invention for a substance itself intended for use or capable of being used, as medicine or drug. The Amendment Act further incorporated in the Parent Act, Chapter IVA, which contained provisions for grant of exclusive marketing rights in respect of pharmaceutical substances for which a claim for patent was made under section 5 of the Act. The Amendment Act of 1999 thus complied with Article 70(8) and (9) of the TRIPS Agreement.

January 1996                         Cancer Research published an article under the title “Inhibition of the Abl Protein-Tyrosine Kinase in Vitro and in Vivo by a 2- Phenylaminopyrimidine Derivative” authored by several people, including Jurg Zimmermann. There was detailed discussion about the antitumoral properties of Imatinib and its methanesulfonate salt, i.e., Imatinib Mesylate.

May 28, 1996                         Patent granted by USPTO (5, 521, 184) referred herein after as Zimmerman Patent

July 18, 1997                          Application filed in Switzerland by Novartis AG, for grant of Imatinib Mesylate Patent to Beta Crystalline Form

April 9, 1998                          Novartis AG filed for Investigational New Drug Application (IND #55,666) for Gleevac before Food and Drug Administration (FDA) USA

July 17, 1998                          Application filed in India by Novartis AG, for grant of Imatinib Mesylate Patent to Beta Crystalline Form (1602/MAS/1998) claiming priority from Swiss Patent Application

November 30, 1998              Switzerland notified as convention country

January 18, 2000                   Novartis AG made application for Patent for Beta Crystalline Form of Imatinib Mesylate in USA

February 27, 2001                 Novartis AG filed for Original New Drug Application (NDA #21-335) for Imatinib Mesylate before Food and Drug Administration (FDA) USA. It declared that active ingredient of the drug is Imatinib Mesylate. The drug substance, active ingredient, drug product (composition/ formulation) and method of use were declared to be covered by US Patent no. 5, 521, 184. It was declared that said patent covers composition, formulation and/or method of use of Imatinib Mesylate.

May 10, 2001                         FDA approval granted to drug “Gleevac (Imatinib Mesyalte) 50 mg and 100mg capsules.

July 3, 2001                            Patent Term extension application made for US Patent no. 5, 521, 184 and term extended to further 586 days from original expiry date of May 28, 2013

March 27, 2002                      Novartis AG, made application for grant of Exclusive Marketing Rights (EMR) to Indian Patent Office

November 10, 2003              EMR granted to Novartis AG, by Indian Patent office

November 23, 2003              US Appellate Court reversed rejection of Beta Crystalline Form of Imatinib Mesylate by the USPTO

January 1, 2005                     Provisions related to Product Patent introduced w.e.f. January 1, 2005 in India

May 17, 2005                         Patent for Beta Crystalline Form of Imatinib Mesylate Granted in USA

January 25, 2006                    The Assistant Controller of Patents rejected the Patent Application for Beta Crystalline Form (1602/MAS/1998) of Novartis filed in India on basis of pre Grant oppositions

February 23, 2007                  Writ Petitions filed against the Assistant Controller’s order converted into Appeals

April 3, 2007                          Govt. of India brought provisions as to appeal to IPAB with effect from April 2, 2007

April 4, 2007                          Appeals of Novartis AG were transferred by High Court to IPAB.

June 26, 2009                         IPAB allowed only the process claims for manufacture of Beta crystalline form and rejected the product and use claims for beta crystalline form

April 1, 2013                          Supreme Court rejected the appeal of Novartis AG against the judgment of the IPAB