IP Connect

Labels Excluded from the Definition of "DESIGNS" : Delhi High Court 

The High Court of Delhi, vide its judgment dated November 09, 2015 in Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia (Regular First Appeal Nos. 239, 240 & 241 of 2011), held that labels on packages of goods are clearly excluded from the definition of “designs” under the Designs Act, 2000.

Brief Facts of the Case

• The Appellant (Midas Hygiene Industries) claims to be pioneers in insecticides and pesticide production in the form of chalks in India. The Appellant obtained registration of the trademarks “Krazy Lines” and “Laxman Rekha” dating back to approximately 1989, and also copyright registration of the packaging of the products.
• The present appeals under Section 72 of the Copyright Act, 1957 are against the order dated April 4, 2011 of the Learned Copyright Board (“the Board”) which expunged the registered copyrights of the Appellant upon a petition filed by the Respondent (Sudhir Bhatia).

The Hon’ble High Court of Delhi restricted itself mainly to the issue of the design registration capability of the artistic work / labels used by the Appellant to market its products i.e. whether the Appellant’s labels will be hit by Section 15(2) of the Copyright Act, 1957 and hence the copyrights vested therein will become invalid on account of their reproduction more than 50 times?

Contentions of the Appellant

The Appellant, inter alia, made the following submissions:-

• The Appellant’s artistic work cannot be registered as a “Design” as it is excluded from its definition under the Designs Act.
• Even otherwise, the reproduction of the artistic work on a package as a label does not automatically compel the registration of the article namely the package or container as a design.

Contentions of the Respondent

• The Appellant’s labels / artistic work are capable of registration and compulsorily registrable under the Designs Act, 2000 and hence hit by Section 15(2) of the Copyright Act, 1957, thus, the copyrights vested therein have ceased to subsist due to their reproduction more than 50 times.
• Design in packaging is not excluded from registration. The design capability of such articles extends to packages. Particularly, the cartons for commercial use and industrially produced and therefore fall within class 19 of the Third Schedule to the Designs Rules, 2001.
• There cannot be any question about the Respondent being entitled to maintain the proceeding before the Board since he is a rival trader and unquestionably has an interest in ensuring that copyrights disentitled to protection are not conferred monopoly rights and are struck off the Register.

“Section 15 of the Copyright Act, 1957 – Special provision regarding copyright in designs registered or capable of being registered under the Designs Act. (1) Copyright shall not subsist under this Act in any design which is registered under the Designs Act; (2) Copyright in any design, which is capable of being registered under the Designs Act, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or, with his licence, by any other person.

Order of the Court and its Rationale

Clarifying the seeming overlap between three intellectual property rights viz. copyright, trademark and design, the Hon’ble High Court of Delhi stated that

• Copyright protection is to the original expression of an idea. Trademarks protect the distinctiveness of a mark, logo, symbol, and their association with a product or service i.e. an identifier as to the source of goods. Design rights protect novelty of the design elements (shape, presentation, etc.) of an article i.e. significantly based on the visual appeal of the product.
• "Design” means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article… and does not include any trade mark under the Trade Marks Act or any artistic work under the Copyright Act. The Board thus erroneously ignored the definition of “design” which excludes, inter alia, artistic works under the Copyright Act and labels as defined under the Trade Marks Act.
• From the language of Section 15 of the Copyright Act, copyright does not subsist in a registered design. The rationale for this is that someone’s choice of design registration is a conscious decision to use the underlying work, for mass production. The design then reaches, through the medium of the product or the article, a wider audience; it has a commercial element. This is possible in cases of designs of products and articles, which are sold widely or have a market. However, that is not always so for an artistic work – typically a painting, a drawing or even a sculpture for instance (which are closest species of copyrights that overlap with designs).
• Following the judgment of the Hon’ble Supreme Court of India in Bharat Glass Tube v. Gopal Glass Works Ltd. AIR 2008 SC 2520, cited the following example – for instance, a famous painting will enjoy copyright protection as an artistic work under the Copyright Act, and a design created from the painting for the purpose of industrial application on an article so that it appeals to the eye would also be entitled design protection under the Designs Act. Therefore, if the design is registered under the Designs Act, the Design would lose its copyright protection under the Copyright Act but not the original painting.
• A perusal of the Copyright Act and the Designs Act and the Preamble and Statement of Objects and Reasons of the Designs Act makes it clear that the legislative intent was to grant a higher protection to pure original artistic works such as paintings, sculptures etc. and lesser protection to design activity which is commercial in nature.
• Therefore, a work of art may be capable of both design and copyright protection. However, copyright in such a work of art can only subsist if it has (i) not been registered as a design or (ii) while answering to the description of a registerable design, it has not been registered as such and not been applied to an article which has been reproduced more than 50 times by an industrial process by the owner, licensee, or any other person. In other words, the copyright in the work can continue to survive independent of the work’s mere fitness for design protection.
• In the present case, the subject work is a label. There is no express indication in the Design Rules that a label fixed or printed on a container or package becomes capable of design registration. In any case, the statutory definition of designs excludes “artistic work” and “labels used as trademarks”. The label is clearly both a trademark (indicating the source of goods) as well as a copyright (containing a combination of colours, stylized lettering and image of cockroach) and clearly excluded from the definition of “designs”.

• If every object based upon some drawing were afforded design registration, soon, objects of common utility – vessels, containers, furniture items, etc. could not be replicated.
• A package design is essentially a promotion of the “trade dress” of the package, and may become a significant asset for market entrenchment and product valuation. Instances of some such product packaging synonymous with the article itself are TOBLERONE chocolate packaging, certain liquor bottle containers and packages; chocolate and cheese wrappers etc.
• Thus, the finding of the Board that the Appellant’s copyright registrations have to be cancelled or cannot stand, because they are capable of design registration and consequently covered by Section 15(2) of the Copyright Act, are set aside. With regard to whether the work could qualify for protection as an artistic work, matter remitted to the Board for fresh hearing of parties, and findings.

Concluding Remarks

This case concerns the seeming overlap between three intellectual property rights, viz. copyright, trademark and design. The judgment of the Hon’ble Delhi High Court provides much needed clarity on the purpose and legislative intention behind Section 15(2) of the Copyright Act, 1957. One hopes that this will reduce the misuse of the Section and provide relief to honest and legitimate traders.

The aforesaid Order dated November 04, 2015 can be accessed here.