India: Special Bench allows combined design infringement and passing off action

February 25 2019

In the latest international briefing for India, Ranjan Narula and Suvarna Pandey analyse Carlsberg Breweries v Som Distilleries and Breweries Ltd

In Carlsberg Breweries v Som Distilleries and Breweries Ltd, the Special Bench, consisting of five judges of the Delhi High Court, decided on the maintainability of a composite suit in relation to infringement of a registered design and passing off. The primary issue before the court was whether a composite suit joining the two causes of action (one for infringement of a registered design and the other for passing off of the plaintiff's goods) was maintainable. The court allowed the joinder of the suits in the case "on account of existence of common questions of law and fact between the two causes of action" i.e. infringement of a registered design and passing off. The court stated that to avoid multiple proceedings, the two causes of action of infringement of a registered design and passing off should be joined against the same defendant in one suit (arising out of the same facts). Multiplicity of proceedings would result in waste of time, money and energy for the parties and also for the courts.

The detailed facts of the case and the court's interpretation of the subject are outlined below:

Carlsberg alleged that Som Distilleries (Som) had adopted an imitation of its registered bottle design, trademark and trade dress to sell its Hunter beer which amounted to infringement of design and trademark, as well as passing off. Carlsberg also filed an injunction application to restrain Som from carrying out its infringing activities. The interim injunction application was considered by the court and it ruled in favour of Som.
Carlsberg's claim was based on:

the unique and distinctive bottle and trade dress/get-up of its Tuborg beer bottle registered under the Designs Act 2000;
an infringement of registered trademark Clockman shape label on the bottle; and
common law rights in the distinctive shape of the bottle.

Som countered Carlsberg's claim on the following grounds:

The frame of the suit was defective considering the two claims for passing off and relief for design infringement [as per Mohan Lal v Sona Paint, 2013 (55) PTC 61 (Del) (FB)], could not be combined in one suit.
Carlsberg by subsequently filing another suit alleging passing off, seeking injunction and other reliefs had indicated that it could not uphold the suit filed.
To determine design infringement, the test to be applied is of a knowledgeable person who knows the field and not of an unwary customer. Further, design resides in the shape of the bottle without the label and when the designs of the bottles are compared there are marked differences.
In 2011, Som had initiated steps to adopt a new design for its Hunter beer and the bottle design and label it adopted are a result of its creativity and efforts.
There was no novelty in Carlsberg's bottle design, as the shape, pull caps and labels are common to the trade over which no monopoly can be claimed.

The single judge analysed the parties' submissions and made the following observations:

With regard to the validity of Carlsberg's design, the court considered whether the design was novel and appealed to the eye. It also considered the similarity or difference between the rival designs and held that Carlsberg's bottle by itself was not new or novel and was like any other bottle existing in the prior art.
The court remarked: "though the indentations/groovings may be novel as such the bottles of other manufacturers may not have identical indentations/groovings, the idea of adopting a bottle design with indentation/groovings is not new in itself, since there are scores of other bottles being used by other vendors of beer and other beverages, and other products, which too have indentations/groovings." Further, Carlsberg had not claimed novelty in any particular feature of the bottle, but the bottle as a whole.
When the two bottles were compared it could not be said that the Hunter beer bottle was an obvious imitation of Tuborg. The adoption of the Hunter beer bottle design appeared to be bona fide – taking into account Som's consultations with design professionals dating back to 2011.
The balance of convenience also favoured Som as it had invested heavily in designing and procuring its bottles.
With regard to the filing of a composite suit by Carlsberg for design infringement, trademark infringement and passing off, the court decided that it was bound by an earlier decision of the three-judge bench (also referred as a full bench) where it was held that a composite suit for infringement of a registered design and a passing off action was not maintainable. The court observed, however, that it could try the suits together if they were filed in close proximity and there were aspects which were common to the suits. The court also disagreed with the previous decision of the full bench (three judges bench) in relation to maintainability of a composite suit with regard to design infringement and passing off and recommended placing the issue of maintainability of a composite suit before a larger bench for reconsideration.

The Special Bench considered the following issues resulting from this case:

Is the court compelled by anything in law to reject a plaint for misjoinder, if two causes of action cannot be clubbed?

The court came to the conclusion that a composite suit with disparate causes of action can be entertained if the court has jurisdiction on both the subject matters. The court also made important suggestions as below:

There is no per se or threshold bar to maintainability of suits, on the perceived ground of misjoinder of 'causes of action'.
The misjoinder by itself is not sufficient to entitle the defendant to have the proceedings set aside or action dismissed.

(b) Are the two causes of action, i.e. a claim for design infringement and the other for passing off, so disparate or dissimilar that the court cannot try them together in one suit?

The bench made the following important suggestions on the issue:

That the basic facts which impel a plaintiff to approach a court, complaining of design infringement are the same as passing off. In such circumstances, it is inconceivable that a cause of action can be split in some manner and presented in different suits.
A composite suit has the advantage of a bird's eye view by the court, with respect to a common set of facts. If for some reason, the claim for design infringement is prima facie weak and the plaintiff cannot secure interim relief, it does not have to face the uncertainty of another action before another court. The same court can review the same facts and evidence.

Finally, the bench, on the argument that there is a significant difference between causes of action relating to design infringement and those based on passing off, held that the factual overlap here is

with respect to presentation in the design, the novelty and aesthetic presentation;
in a passing off action, the distinctiveness of the mark and association with the owner.

The bench concluded, to establish infringement (of a design), fraudulent imitation has to be proved. Likewise, in a passing off action it is necessary for the owner of the mark to establish that the defendant has misrepresented to the public (irrespective of the interest) that its goods are those of the plaintiff and the resulting harm to its reputation is actionable. Thus it found that the two actions can be clubbed.

The reasoned judgement has brought long awaited clarity on the subject. It will also help simplify the management of a combined action and its procedural aspects.