Crocs Inc. USA obtained design registrations in India under numbers 197685 and 197686 for its perforated & non-perforated clogs/footwear designs. In and around 2014, Crocs Inc. became aware that there was use and fraudulent imitation of their registered designs and impugned design footwear were being sold in India by several footwear manufacturers. Crocs Inc. filed suits against several companies like Liberty Shoes, Relaxo Footwear Ltd., Bioworld Merchandising India Ltd. etc. Separate suits were filed for infringement of registered designs and passing off action.
In this post, I will focus on the suits filed by Crocs Inc. for infringement of their registered designs under numbers 197685 and 197686. The said design registrations were effective from 28.05.2004 and valid until 27.05.2019.
A. Brief facts
From 2014 to 2018 Crocs filed several suits for infringement of their registered footwear designs and sought decree of permanent injunction against the defendants, restraining the defendants from using the impugned designs or any other design deceptively similar to their registered designs. Based on Crocs design registrations, the Court granted ex-parte ad-interim injunction against the defendants. However, after receipt of summons the defendants contested the proceedings and also applied for vacation of ex-parte orders. The Delhi High Court clubbed all the matters and passed a common order on 8th February, 2018.
The defendants contested the claim of Crocs and based on Clauses (b) to (d) of Sub-Section (1) of Section 19 of the Designs Act argued that the registration of the design granted to Crocs is not valid as the same is not new or original design and was already existing in public domain /published prior to its registration. Therefore, such registered designs will not give any legal right to Crocs to allege piracy of the registered designs.
The defendants further argued that as per Section 22 of the Designs Act, even if the registrations were existing under the Act, the defendants in a suit alleging infringement of a registered design can show that the design which the plaintiff has got registration of was not one capable of being given registration, and hence the plaintiff is not entitled to seek any relief by filing the suit.
B. Issues
Following two issues were framed by the Learned Single Judge of the Delhi High Court:
(i) Whether the designs registered by Crocs with respect to the footwear are or are not new or original designs?
(ii) Whether the registered designs of the footwear of Crocs were in public domain prior to registration?
C. Discussions and findings of Single Judge
The Learned Single Judge first dealt with the second issue i.e. whether the registered designs of the footwear of Crocs were in public domain prior to registration. In deciding the same, the Single Judge examined the internet downloaded pages from the website of the Company Holey Soles (which made footwear with holes/spaces/gaps), which were placed on record by the defendants. The defendants argued that the said publications existed on the website of Holey Soles on 10.12.2002 and similar publications were also available on Holey Soles website on 17.02.2003, which was much prior to the registrations obtained by Crocs. Crocs admitted to the fact that the footwear designs available on the website of Holey Soles was similar to their designs (without the back strap), however argued that depiction in the website is no guarantee that depiction of the footwear in question in fact took place as on 10.12.2002 and 17.02.2003 as stated in the printouts downloaded and filed by the Defendants.
The Single Judge rejected Crocs claim calling it desperate argument and held that a design similar to the design of the footwear of Crocs had already been published and sold by M/s. Holey Soles prior to 28.5.2003. Hence such design already existed in public domain prior to Crocs registration. Crocs cannot claim exclusivity for its registered design merely on the ground that Crocs footwear/registrations have a strap at the back of its footwear.
Interestingly, the defendants also filed printouts from Crocs website. As per the said printouts, the subject designs were available on Crocs own website prior to 28.05.2003, the priority date of registration of Crocs. Therefore, the issue of prior publication was also held against Crocs.
The Single Judge held that the registered designs of Crocs were in public domain prior to 28.05.2003, priority date and consequently the said registrations of Crocs are liable to be cancelled in terms of Section 19(1)(b) read with Section 4(b) of the Designs Act. Therefore, the subject registrations granted to Crocs will not afford any legal entitlement to Crocs to allege piracy of the designs under Section 22 of the Designs Act.
The above findings of the Single Judge were sufficient to dismiss the interim injunction applications filed by Crocs. Nonetheless the Single Judge went ahead and dealt in length with the issue of design being new or original. The Single Judge emphasized that a design should be new or original to be registered under the Designs Act. The Single Judge further reiterated that in case a design gets registered which may be cancelled as per Section 19(1)(d) of the Act, then even if the design is not cancelled, the grounds of cancellation will be available as defences to the defendant in a suit alleging infringement of design as per Section 22(3) of the Designs Act.
Crocs argued that their registered designs for footwear/clogs should be looked as a whole and tried to highlight various features of their registered designs which when taken as a whole have a visual appeal and add newness or originality and are entitled to registration under the Designs Act.
Placing reliance on judgements of Division Bench of Delhi High Court and Supreme Court, the Single Judge observed that “it is necessary for protection of a registered design that the registered design must be an Intellectual Property Right created after application of sufficient time, labour, effort, etc, .and that there must be sufficient newness or originality i.e. existence of requisite innovation and that trade variations of known designs cannot result in newness and originality.”
The Single Judge briefly dealt with the evolution of footwear and remarked that “footwear is a footwear, shoe is a shoe is a shoe and sandal is a sandal is a sandal.” The Single Judge emphasised that for a footwear design to be termed as new and original to become an Intellectual Property Right as design under the Act, the effort put in to create the same should be more than an ordinary effort.
The Single Judge held that the features argued on behalf of Crocs, when taken as whole, or even individually do not qualify as new or original. The said features merely are variations or trade variations of footwear and trade variations of footwear/sandals cannot and should not be given exclusive monopoly. Accordingly, Crocs interim injunction applications were dismissed.
Finally, the Single Judge also awarded actual legal costs to be paid by Crocs to the defendants and additional a cost of Rs. 2 lacs per defendant.
Appeal filed by Crocs
Crocs filed appeal against the above order passed by the Single Judge of Delhi High Court. The Division Bench of Delhi High Court heard the appeal and held as follows:
With respect to the issue of Crocs designs being in public domain/prior published, the Division Bench held that they were satisfied that proper test for prior publication was gone into by the Learned Single Judge. The impugned judgement passed by the Learned Single Judge with respect to prior publication was in consonance with the laws and facts of the case.
Further, with respect to Crocs designs being new or original, the Division Bench held that based on the records available, the Crocs footwear designs are mere repetitions of the age-old designs with some variations – in strap, etc. The finding of the Single Judge on the issue of lack of novelty cannot be faulted and is reasonable.
The third aspect that the Division Bench dealt with was de-linking the design infringement suits from passing-off suits. The Single Judge had de-linked two suits pertaining to passing-off from the other suits for design infringement. The Division Bench held that in view of directions given in Mohan Lal, subsequently overruled by Carlsberg v. Som Distilleries A/S, since two separate sets of suits were filed by Crocs and were travelling together, segregating them was not appropriate.
The Division Bench further held that the Single Judge did not give any reasons for vacation of injunction so far as passing off suits were concerned therefore the Single Judge was directed to hear the two segregated suits of passing off alongwith other passing off suits. However, the findings by the Single Judge with respect to the merits of the claim for ad interim injunction in regard to design infringement claims was affirmed by the Division Bench.
Lastly, with respect to the cost imposed by the Single Judge, the Division Bench held that the costs imposed are neither unreasonable nor disproportionate.
Conclusion
Merely because a design is registered, it cannot be said that the design is new or novel or valid. A proprietor of a design will be entitled to claim piracy of its registered design only if its registered design is itself new or novel and has not been prior published in India or in any other country prior to the date of registration.
In the next part of my post I shall discuss about the passing off suits filed by Crocs with respect to their footwear designs/clogs and whether Crocs was held to be entitled to relief in a passing off action?
