DOES CROCS LITIGATION BRING CLARITY ABOUT THE OVERLAP BETWEEN RIGHTS CONFERRED BY DESIGN

REGISTRATION AND RIGHTS AGAINST PASSING OFF TRADEMARK

Crocs is involved in various legal disputes in India with local or domestic foot ware makers (defendants) to safeguard its clog design. Crocs also filed separate cases to safeguard its footwear design based on registered design and passing off. The registered design cases were dismissed because the court determined that Crocs’ design was not new based on its prior publication. Crocs’ proceedings against six footwear manufacturers are based on common law right in the footwear’s peculiar shape and structure. All of the cases were reviewed concurrently since they all concerned the same substantive legal issue. Further, the court wanted to examine the maintainability of the passing-off action before hearing arguments on the grant of a preliminary injunction in favor of Crocs.

Crocs is a renowned American shoe company. In 2019 Crocs, filed suit against India’s 6 leading footwear manufacturers ie Bata India Ltd., Liberty Shoes Ltd., Action Shoes Pvt. Ltd., Aqualite India Ltd., Bioworld Merchandising India Ltd., Relaxo Footwear Ltd., and Kidz Palace to protect their clog design.

Issues

a) That, whether such a passing-off operation that fundamentally relied heavily on a registered design is sustainable.

b) That, would both design and trademark rights be maintained in the same subject matter due to convergence between the Designs Act and the Trademarks Act?

Crocs’ contentions

a) The Trademarks Act’s definition of ‘mark’ covers the shape of items in Section 2(m). As a result, the design or shape of footwear can be used as a trademark.

b) The Designs Act, not the Trademarks Act, contains the impediment to a design being a trademark.

c) That merely because each of the defendants while copying the design, instead of using the brand name of Crocs put their brand name on the product, does not defeat the action for passing off.

Defendants contended

a) A design cannot be a trademark under the Designs Act.

b) A passing off action has been held to be maintainable in Mohan Lal v Sona Paint & Hardware[1], and Carlsberg Breweries v Som Distilleries[2], concerning components of trade dress and overall get-up that aren’t part of a registered design, rather than the registered design itself..

c) The plaint contains an express admission that Crocs is using the registered design as a shape trademark/trade dress and it has neither pleaded nor argued as to what the overall get up and trade dress is beyond the registered design, for which passing off is claimed.

d) If what is registered as a design is also given protection as a trademark, it would not only run counter to the rights in a design that is for a limited period but also permits rights as a trademark (in a design) which are not registrable under the Designs Act.

Court Order

The court determined that “a registered design bestows on the registrant just the entitlement to restrain others from impinging the design but not the right to or also the claiming to registered design as its trademark/trade dress, constrain others from passing off its goods as those of the registrant, by duplicating the registered design,” depending on the aforementioned anecdotes:

  1. The real issue is the dependability of the passing off suit relying on registered design, not really the maintainability of compounded suits, as the parties have emphasized in light of the Mohal Lal and Carlsberg cases.
  2. A registered design cannot be used as a trademark, according to Section 2(d) of the Designs Act.
  3. The legislative intent is clear that a trademark cannot be a design. The features of shape, configuration, pattern, ornament, or composition of lines or colors applied to any article, even if used as a trademark, cease to be a trademark 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 trademark.
  4. 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, the only action for infringement under the Designs Act would lie.
  5. Crocs has failed to plead or show anything extra, beyond the registered design of the product in use, which has goodwill as a trademark and can be protected in present passing off actions.

My Comment

Fundamentally, the decision appears to have established that what has been safeguarded as a design cannot be safeguarded as a trademark under trademark law. Furthermore, once a party decides with regards to  registration of the shape, arrangement, or other features as a design, its claims will be based on design infringement. Statutes governing the protection of trademarks in most countries, including India, recognize that designs of products can be a trademark. However, if the shape of a product is used as a trademark, then it is not considered a design in India. Section 2(d)[3] excludes a trademark from the definition of “design”, which is protectable under the Designs Act.

 

–       The Trademark Act of 1999, on the other hand, does not prevent a design registered under the Designs Act from being recognised as a trademark. When a registered design also is asserted to be a trademark, one of the following methods may be used to interpret the Designs Act and the Trademark Act in a consistent manner:

–       Design registration should be revoked; or

–       Registered design should not be considered a trademark.

II.         Conclusion

In the Indian context, till such time, if ever, a registered design has protected a trademark when the design acquires the trait of a trademark, it is advisable to decide beforehand whether a design is likely to be used as a trademark. In case the design is likely to be used as a trademark, then registering the design under the Designs Act may be detrimental to the interests of the owner of the design since design protection is for a limited period and protection of the registered design as a trademark is unlikely.

 


[1] THE DESIGNS ACT, 2000 No. 16 of 2000 [25th May, 2000]

By Saransh Srivastava

Leave a Reply

Your email address will not be published.

No widgets found. Go to Widget page and add the widget in Offcanvas Sidebar Widget Area.