Plea Of 'Passing-Off' Can't Be Negated Solely On Ground That Plaintiff Had Asserted Trademark Rights In Registered Designs: Delhi High Court

The Delhi High Court has held that a plea of passing-off cannot be negated solely on the ground that the Plaintiff had asserted trademark rights in the registered designs. A composite suit seeking action in respect of both design infringement and passing off is maintainable.

A single judge bench comprising Justice Jyoti Singh observed that while it is trite that asserting trademark rights in registered designs makes the designs vulnerable, however, where the elements of the design are used as a larger trade dress get-up, presentation through its packaging etc., the passing off claim shall lie.

It observed,

"A composite suit that joins two causes of action, one for infringement of a registered design and other for passing off the Plaintiff's goods, is maintainable...Even if the Plaintiff asserts a claim of trademark in a registered design, which makes a design vulnerable, it is open to the Plaintiff to plead that it has a goodwill and reputation and Defendant No.1, by misrepresentation is passing off its goods as that of the Plaintiff, thereby causing damage and injury and Defendant No.1 by fraudulent imitation of the article to which the registered design is applied is guilty of infringement of the said design."

The observation was made in a suit for alleged infringement of design and passing off filed by Havells India (Plaintiff), which claims to have conceptualised a design for ceiling fans called the ENTICER, against Panasonic Life Solutions (Defendant) over its new series of ceiling fans called VENICE PRIME which, as per the Plaintiff was a blatant copy of Plaintiff's design.

It was contended that the class of consumers purchasing the competing products were unwary customers of average intelligence and imperfect recollection. The customer base generally includes electricians, electric contractors, builders etc. who purchase these products from the retail shops and usually do not read the mark or label or the name of the manufacturer on the packaging of the product and owing to the high degree of visual similarity in the products of the Plaintiff and Defendant, the Plaintiff stated that the chances of confusion were extremely high. Thus, it was submitted by the Plaintiff that it was entitled to an interim injunction against Defendant.

Per contra, the Defendant submitted that the claim of novelty by Plaintiff was vague and its design did not qualify as 'new or original' and it was merely an introduction or substitution of ordinary trade variants in a prior published design. It was also contended that the Plaintiff had claimed trademark rights in the registered designs. Thus, having claimed trademark in the suit designs, the design registration becomes vulnerable and is liable to be cancelled under Section 19(1)(e) of the Act.

The Defendant relied on a Full Bench decision of the Delhi High Court in Carlsberg Breweries A/S v. Som Distilleries and Breweries Ltd., where it was held that if the registered design per se is used as a trademark, it can be cancelled. It was also contended that no monopoly can be claimed over a concept which is common place or exists in nature. In any event, it was contended that the Defendant's adoption of marble pattern was bona fide.

The court first addressed the objection raised by the defendant that the Plaintiff had alleged infringement of designs under the Designs Act and has also asserted trademark rights in the registered designs as well as invoked the common law remedy of passing off, which are self-destructive pleas and make the Plaintiff's designs vulnerable. Here, the stand of the Plaintiff was that holder of a registered design can institute a suit for passing off and infringement of the registered design. Reliance was placed on Mohan Lal, Proprietor of Mourya Industries v. Sona Paint & Hardwares, 2013 SCC OnLine Del 1980 for the same.

The court stated that a registered design per se if used as a trademark is liable for cancellation. However, where the elements of the design are not used as a trademark but a larger trade dress, get-up, presentation of the product through its packaging etc., action for passing off would lie, given that a passing off claim can include but is also wider than infringement of a trademark.

The court found merit in the contention of Defendant that Plaintiff had sought to assert trademark rights in the registered designs, thereby making the designs vulnerable and entitling Defendant to take this as a defence. However, the question raised was whether irrespective of the said pleadings, Plaintiff could lay a claim of passing off, not restricted or limited to the registered design alone but in the overall get-up, trade dress etc. The court stated that –

"It is settled law that parties can raise alternate and inconsistent pleas but should not be permitted to raise pleas which are mutually destructive of each other. Therefore, even if the Plaintiff asserts a claim of trademark in a registered design, which makes a design vulnerable, it is open to the Plaintiff to plead that it has a goodwill and reputation and Defendant No.1, by misrepresentation is passing off its goods as that of the Plaintiff, thereby causing damage and injury and Defendant No.1 by fraudulent imitation of the article to which the registered design is applied is guilty of infringement of the said design."

Thus, the plea of passing off could not be negated only on the ground that the Plaintiff had asserted trademark rights in the registered designs and required consideration on its own merits.

The court opined that in order to succeed, Plaintiff was required to establish that Defendant had misrepresented to the public that its goods are that of the Plaintiff, resulting in injury and harm to Plaintiff's reputation. Insofar as Plaintiff's Design was concerned, it was registered for 'shape and configuration'. Therefore, the claim for passing off could only be asserted in 'something extra' beyond the registered design which could only be in the ornamentation, overall get up, trade dress, etc.

The court stated that to determine infringement under Section 22(1) of the Act, the test was to compare the rival designs and judge by the eye, if the essential features of the impugned design were substantially different from the registered design sought to be protected. In the present case, the court found that the visual comparison of the two fans showed that the visual features of the two competing designs were strikingly similar to the eye.

The court also found that the defendant was estopped from taking any objection to the novelty of Plaintiff's design since it has itself applied for registration of its own design in 2021 and the application was for registration in shape, configuration and surface pattern. Thus, its contention that no monopoly could be claimed over a concept which is common place or exists in nature was devoid of merit. The court held that–

"Estoppel prevents Defendant No.1 from taking such contradictory stands. And the principle is clearly based on the maxim quod approbo non reprobo that no party to a litigation can be allowed to approve and reject or blow hot and cold at the same time."

The court also found that from a mere visual comparison, it was visible that every attempt had been made by Defendant to come as close as possible to Plaintiff's fans. The impugned product had the same shape and configuration, ornamentation on the blade, body ring on bottom cover, layout and placement of the ornamentation. The court also stated that minute dissimilarities were not proof of the fact that the design was not copied as if the Courts were to examine the dissimilarities with great minuteness, no Plaintiff would ever succeed in a claim for infringement or passing off as a clever Defendant, with some skill would always be in a position to make some cosmetic or minor changes and get away with deceit and infringement.

Finally, regarding the argument of Defendant's design being bona fide, the court stated that if the design in question was such a common place, why did the defendant not use the same on the fans before. It was only after the Plaintiff designed its fans and earned goodwill and reputation did the Defendant came out with the impugned products. The court held that this was not merely a coincidence. It was held that this was misrepresentation with a view to deceive the public and encash on the goodwill and reputation of the Plaintiff.

The argument that the packaging of the fans was different and contained the name of Defendant was not accepted by the court. The court held that it was common knowledge that ceiling fans were displayed as installed on the ceilings without boxes. Thus, it was only after the customer had chosen a particular fan, a fresh piece packed in a box was given to the customer on payment. Thus, the Defendant could easily pass off its fans as that of Plaintiff's.

Accordingly, the could held that the Defendant was infringing the design of the Plaintiff and passing off its goods as that of the Plaintiff, thereby deceiving the public. Thus, interim injunction was granted in favour of the Plaintiff.

Case Title: HAVELLS INDIA LIMITED v. PANASONIC LIFE SOLUTIONS INDIA PVT LTD & ANR.

Citation: Citation: 2022 LiveLaw (Del) 585

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