The Delhi High Court’s decision in Novamax Industries LLP vs Prem Appliances & Anr. [CS(COMM) 177/2021] examines the relationship between statutory design infringement and the common law remedy of passing off in the context of a composite design suit. While the Court summarily dismissed the Plaintiff’s claim for design infringement after finding that the registered design had been published by the Plaintiff itself prior to registration, it refused to dismiss the accompanying passing off claim. Reaffirming the principles laid down by the Full Bench in Carlsberg Breweries A/S vs Som Distilleries and Breweries Ltd. and the Division Bench decision in Crocs Inc. USA v. Bata India, the Court held that the invalidity or vulnerability of a registered design does not, by itself, extinguish an independent cause of action for passing off. Since passing off is founded on common law rights and depends upon evidence regarding goodwill, misrepresentation and deception, the claim cannot be rejected through summary judgment merely because the infringement action fails.

The Plaintiff instituted the suit alleging infringement of its registered design bearing registration no. 322384-002 in respect of air coolers, along with claims of passing off, damages, rendition of accounts and other ancillary reliefs. According to the Plaintiff, the Defendant no. 1 was manufacturing and marketing coolers bearing an identical design while using the mark “AROKING” together with the sub-mark “NOVA”, which formed the dominant part of the Plaintiff’s trade name. It was alleged that the Defendants were passing off their goods as that of the Plaintiff.

During the pendency of the proceedings, the Plaintiff had secured an ex parte injunction against the Defendants. However, the injunction was subsequently vacated by the Court after the Defendant raised a credible challenge to the validity of the registered design. The instant proceedings concerned Defendant No.1’s application under Order XIII-A CPC, seeking summary judgment dismissing the suit on the ground that the Plaintiff had no real prospect of succeeding.

The principal defence taken by the Defendant was that the design was vulnerable to cancellation under Sections 19 and 22 of the Designs Act because the Plaintiff had commercially exploited and publicly disclosed the design before filing its design application. To establish this, the Defendant relied upon invoices produced by the Plaintiff, demonstrating that coolers embodying the subject design had been sold several months before the design registration application was filed. In addition, the Defendant relied upon screenshots from the Plaintiff’s website showing that the subject cooler design had been advertised and offered for sale before the date of filing of the application.

It further argued that the passing off claim was unsustainable since the plaint did not contain the necessary pleadings regarding shape, configuration, trade dress or other essential elements required to maintain such an action.

In response, the Plaintiff contended that even if the infringement claim fails, when the suit contains an independent cause of action for passing off, such claim cannot be dismissed summarily before trial.

Design infringement claim

The Court considered the infringement claim and observed that the invoices, together with the Plaintiff’s website displaying the products before the date of filing of the application, constituted evidence of prior publication of the design. Accordingly, exercising its powers under Order XIII-A CPC, the Court summarily dismissed the suit insofar as it related to infringement of the registered design.

Passing off claim

The Court, however, reached a different conclusion regarding passing off. Rejecting the Defendant’s argument that the plaint lacked necessary averments, the Court emphasised that pleadings are only required to contain material facts constituting the cause of action. Whether those facts are ultimately proved is a matter of evidence at trial.

Examining the plaint holistically, the Court found that the Plaintiff had alleged that:

• the Defendants were selling identical goods as those of the Plaintiff;
• the impugned products ‘imitated’ the ‘features of shape and configuration’ of the Plaintiff’s design;
• the Defendants intended to exploit the Plaintiff’s goodwill and reputation; and
• consumers were likely to be deceived into believing that the Defendants’ products originated from the Plaintiff.

The Court further observed that the Defendant’s written statement had not specifically traversed these allegations and had largely confined its defence to issues relating to territorial jurisdiction and denial of sales to Defendant no. 2, leaving the allegations of passing off substantially unanswered. In view of the same, the Court held that the viability of the passing off claim could only be determined after parties had an opportunity to lead evidence.

Further, the Court undertook an extensive discussion of the Full Bench decision in Carlsberg Breweries and the Division Bench judgment in Crocs Inc. USA. The Court reiterated that passing off is an independent common law remedy which, unlike infringement arising from statutory registration, depends upon proof of goodwill, misrepresentation and resulting damage. The Court observed that even where a design infringement action fails, the Court may still grant relief in passing off on the basis of the same evidence if the necessary ingredients are established.

The Court reproduced the Division Bench’s discussion distinguishing infringement from passing off and emphasised that while infringement arises from registration itself, passing off protects the goodwill generated through use and requires factual evidence regarding reputation and consumer deception.

The Court held that unlike design infringement, which largely depends upon the validity of the registration, passing off requires evidence concerning goodwill, reputation, deception and likelihood of confusion. Such issues necessarily require the parties to lead evidence at trial and therefore cannot ordinarily be resolved through summary judgment proceedings.

Accordingly, while the Court summarily dismissed the Plaintiff’s design infringement claim, it rejected the Defendant’s request to dismiss the passing off action.