India: Clog in Crocs enforcement strategy for its footwear design
Crocs is embroiled in several disputes with local footwear manufacturers in India (the defendants) to protect its clog design. Separate actions were brought by Crocs based on registered design and passing off to protect its footwear design. The lawsuits based on registered designs were dismissed as the court found no novelty in Crocs' design based on its prior publication. The actions against six footwear manufacturers brought by Crocs are based on common law rights in the distinctive shape and design of the footwear. All the cases were heard together as they involved a common question of law. Further, the court wanted to examine the maintainability of the passing off action before hearing arguments on the grant of a preliminary injunction in favour of Crocs.
The essential issues before the court were:
a) Whether a passing off action that essentially relies on a registered design is maintainable.
b) The effect of overlap between the Designs Act and the Trade Marks Act on shape marks and can both design and trademark rights be claimed in the same subject matter.
a) The definition of 'mark' in Section 2(m) of the Trade Marks Act includes shape of goods. Thus the design/shape of footwear can also be a trade mark.
b) The bar to a design being a trade mark is contained in the Designs Act and not in the Trade Marks Act.
c) That merely because each of the defendants, while copying the design, instead of using the brand name of Crocs put their own brand name on the product, does not defeat the action for passing off.
In response, the defendants contended that:
a) A design cannot be a trade mark under the Designs Act.
b) A passing off action has been held to be maintainable in Mohan Lal v Sona Paint & Hardwares, ((2013) 55 PTC 61 (Del)) (Mohan Lal) and Carlsberg Breweries v Som Distilleries, (2018 SCC OnLine Del 12912 (Carlsberg)) with respect to elements of trade dress and overall get up other than registered design, and not with respect to registered design.
c) The plaint contains an express admission that Crocs is using the registered design as a shape trade mark/trade dress and it has neither pleaded nor argued as to what the overall get up and trade dress are beyond the registered design, for which passing off is claimed.
d) If what is registered as a design is also given protection as a trade mark, it would not only run counter to the rights in a design which are for a limited period but also permit rights as a trade mark (in a design) which are not registrable under the Designs Act.
The court, while dismissing the suits, held that "a registered design confers on the registrant only the right to restrain another from infringing the design and not to, also claiming the registered design as its trade mark/trade dress, restrain another from passing off its goods as that of the registrant, by copying the registered design" based on the following observations:
a) The actual bone of contention is about the maintainability of the passing off suit based on registered design and not the maintainability of composite suits as stressed by the parties in light of the Mohal Lal and Carlsberg cases.
b) As per Section 2(d) of the Designs Act, a registered design cannot constitute a trade mark.
c) The legislative intent is clear that a trade mark cannot be a design. The features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article, even if used as a trade mark, cease to be a trade mark on registration being granted to the same as a design. Thus a registrant (of a design) is deemed in law to have surrendered, abandoned, acquiesced and waived all rights to use such features as a trade mark.
d) A registrant of a design would be entitled to maintain a passing off action by showing that its product besides the registered design also has other/extra features and goodwill in respect of such features that have been copied. If the copying is of the registered design, only an action for infringement under the Designs Act would lie.
e) Crocs has failed to plead or show anything extra, beyond the registered design of the product in use, which has goodwill as a trade mark and can be protected in present passing off actions.
Overall, the decision seems to have clearly laid down that what is protected as a design cannot enjoy trademark protection under the guise of trade dress law. Further, the doctrine of election will apply and once a party chooses to register the shape, configuration, etc. as a design, its claim will be based on design infringement.