RFA (OS) No. 25/2006 Page 1 of 72 * IN THE HIGH COURT OF DELHI AT NEW DELHI + RFA (OS) NO.25/2006 Reserved on : January 21, 2009 Date of Decision : May 28, 2009 Microfibres Inc. .....Appellant Through : Mr. Raju Ramachandran, Sr. Advocate, with Ms.Ruchi Agnihotri and Ms.Anushree Tripathi, Advocates. Versus Girdhar & Co. & Anr. .....Respondents Through : Mr. Prashanto Chandra Sen, Advocate, for the respondent no.1. Mr.Rajendra Kumar and Ms. Punita Bhargava, Advocates, for respondent no.2. AND + FAO(OS) NO. 447/2008 Mattel Inc & Ors. .....Appellants Through : Mr. Praveen Anand, Ms. Swathi Sukumar and Ms. Tusha Malhotra, Advocates. Versus Jayant Aggarwalla & Ors. .....Respondents Through : Dr. A.M. Singhvi, Sr. Advocate, with Mr. Sushant Singh, Advocate. AND RFA (OS) No. 25/2006 Page 2 of 72 + FAO(OS) NO. 326/2007 Dart Industries Inc. & Anr. .....Appellants Through : Mr. Arun Jaitley, Sr. Advocate, Ms. Jaspreet Sareen, Mr. Angad Varma and Ms. Pragya Jha, Advocates. Versus Techno Plast & Ors. .....Respondents Through : Mr. Sanjay Jain, Sr. Advocate, with Mr. Sushant Singh, Advocate. CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL HON'BLE MR. JUSTICE VIPIN SANGHI 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes JUDGMENT 28.05.2009 : MUKUL MUDGAL,J. 1. This appeal bearing RFA (OS) No.25/2006 arises out of the judgment of the learned Single Judge dated 13th January, 2006 in Suit No. 1480/2002. 2. Since certain common issues arise in this appeal and the other two appeals i.e. FAO (OS) No. 326/2007 filed by Dart Industries Inc. and FAO (OS) No. 447/2008 filed by Mattel Inc., on the question of interpretation of RFA (OS) No. 25/2006 Page 3 of 72 Section 2(c) of the Copyright Act read with Section 2(d) of the Designs Act and Section 15(2) of the Copyright Act and their interplay with each other, we have permitted the parties in the connected appeals also to make submissions on the common legal principles arising in these appeals. However, the aforesaid two appeals bearing FAO(OS) Nos. 326/2007 and 447/2008 will be taken up for hearing on facts and other pleas after the pronouncement of the judgment in the present appeal bearing RFA(OS) No. 25/2006 in the appeal titled Microfibres v. Girdhar & Co. and Anr. 3. The appellant manufactures and sells upholstery fabrics with designs derived from the original and unique artistic works either conceptualized or drawn by its employees or by assignation of the copyright in such artistic works to the appellant by the original artists. 4. The respondents are also manufacturers of upholstery fabrics and the learned Single Judge in the judgment challenged in this court has held that the upholstery fabrics of the respondent do incorporate/reflect the designs founded upon the appellant‘s artistic works or a substantial reproduction thereof. 5. The grievance of the appellant arises from the premise that the learned Single Judge held that the designs in question were capable of being registered under the Designs Act, 2000 and consequently the appellant was not entitled to seek protection under the copyright law as the designs had not been registered RFA (OS) No. 25/2006 Page 4 of 72 under the Design‘s Act. 6. The learned Single Judge held as follows: - a. In order for the work of the appellant to qualify as an artistic work, it must fall within the sub-section (c) of the Section 2 of the Copyright Act. A reading of the said provision shows that the attempt of the appellant can only be to bring it to the concept of ‗painting‘. b. The comparison with the painting of M.F. Hussain, would be otiose, as the work in question in the present case, is not a piece of art by itself in the form of painting. c. The originality is being claimed on the basis of the arrangement made. What cannot be lost sight of is the very object with which such arrangements or works had been made. The object is to put the artistic work into industrial use. d. The two important aspects are the object with which it is made, which is industrial and its inability to stand by itself as a piece of art. In fact, it has no independent existence in itself. e. In India, there are special legislations governing the protection of different nature of rights. In so far as the industrial designs are concerned, the protection is provided under the Designs Act, 2000. f. Fabric designs on textile goods have been classified as proper subject RFA (OS) No. 25/2006 Page 5 of 72 matter of design protection by inclusion as a specific class in the rules framed under the Designs Act. Such protection is provided under clause 05 of the New Design Rules, 2001. g. The exclusion of an ‗artistic work‘ as defined in Section 2(c) of the Copyright Act from the definition of ‗design‘ under Section 2(d) of the Designs Act, 2000 is only meant to exclude the original artistic works like paintings of M.F. Hussain. It is, thus, the original paintings, sculptors and such works of art which are sought to be specifically excluded from the definition of Design under the Designs Act, 2000. h. It is, thus, apparent that in the context of the Indian Law, it is the Design Act of 1911 or 2000, which would give protection to the appellant and not the Copyright Act. i. The application of mind and skill is not being denied nor the fact that the respondents have copied the same, but that would still not amount to the works in question being labeled as ‗artistic work’ within the definition of Section 2(c) of the Copyright Act and, thus, the protection is not available under the Copyright Act. j. At the relevant stage of time, it was the Designs Act of 1911 which was in operation since the Designs Act, 2000 came into force only in May, 2001. The works of the appellant were capable of registration under the RFA (OS) No. 25/2006 Page 6 of 72 Designs Act of 1911. The appellant, however, failed to register the same at that relevant stage of time. That the appellant itself has set out that it had registered the patterns under the Designs Act in England. k. Designs copyright was, thus, held to be distinguishable from artistic copyright. The rights under the Patent and Designs Act were much narrower than those given by the Copyright Act and in respect of such products, it was not intended that they should have cumulative protection both under the Copyright Act, the Patent Act and/or the Designs Act. l. What the appellant was actually required to do, was to register the designs, which the appellant has failed to do. The designs are older and, thus, would have been registrable under the Designs Act of 1911. The appellant failed to register the designs. Insofar as the Designs Act of 2000 is concerned, the appellant has also admittedly not registered the designs under the said Act. m. It would suffice to say that the patterns and designs of the appellant were capable of registration both under the old Act and the new Act and the appellant failed to do so with the result that the protection is not available to the appellant which would have arisen if they had been so registered. RFA (OS) No. 25/2006 Page 7 of 72 n. The appellant has failed to make out a case of having completed the requisite formalities in law so as to avail the benefit of the exclusive use of the patterns and designs in question. 7. It has been submitted on behalf of the appellant that the above finding of the learned Single Judge that the works of the appellant were not original artistic works within the definition of Section 2(c) of the Copyright Act proceeds on the misappreciation of law and seeks to draw an artificial distinction between those works which are pure artistic works and those which are not. In particular, he has questioned the finding of the learned Single Judge that the artistic work in question does not have the ability to stand by itself as a piece of art and in fact has no independent existence in itself. It has been contended that the exclusion of an ‗artistic work‘ as defined in Section 2(c) of the Copyright Act from the definition of ‗design‘ under Section 2(d) of the Designs Act, 2000 is meant to exclude the original artistic work. 8. The following three conclusions of the learned Single Judge have been questioned in this appeal:- (i) Re the works in question ―…its inability to stand by itself as a piece of art. In fact, it has no independent existence in itself.” (para 62 of the impugned judgment) (ii) The exclusion of an ‗artistic work‘ as defined in section 2(c) of the RFA (OS) No. 25/2006 Page 8 of 72 Copyright Act from the definition of ‗design‘ under Section 2(d) of the Designs Act, 2000 is only meant to exclude the nature of artistic works like painting of M.F. Hussain (para 65 of the impugned judgment). (iii) The application of mind and skill is not being denied nor the fact that the respondents have copied the same, but that would still not amount to the works in question being labeled as ‗artistic works‘ within the definition of Section 2(c) of the Copyright Act and, thus, the protection is not available under the Copyright Act (para 62 of the impugned judgment). 9. The appellant through Senior Counsel Sh. Raju Ramachandran submitted as follows: - a. An erroneous and artificial distinction has been drawn by the learned Single Judge in between artistic works which are a piece of art by themselves and other works through the interpretation of Section 2(c) (i), whereas the subjective assessment of the artistic quality of a work is not required so as to qualify for the protection available under the Copyright Act, 1957. Reliance has been placed on the judgment in the case of British Northrop vs. Texteam Blackburn Ltd. (1974) RFA (OS) No. 25/2006 Page 9 of 72 RPC 57 (ChD) to submit that the works must originate with the author and not being copies from another work as the only requirement, so as to qualify for copyright protection. b. The learned Single Judge found that the works in question were capable of being registered under the designs law as the Designs Act classification includes ‗fabrics‘ as articles whose design can be registered. However, this finding fails to take note of the fact that it is the nature of the work which determines the intellectual property rights vested therein and not merely the fact that it falls under the classification of the Designs Act or the Trade Marks Act. Even the Trade Marks Act provided for registration of fabrics/textiles in Class 24. What was required to determine the capacity of being registered under the Designs Act was not whether the object fell into the classification within the Designs Act, but whether the work in question satisfied the substantive requirements for registration as a ‗design‘. c. The phrase ‗capable of being registered‘ must be understood as referring to designs possessing, at the time of being made, such essential characteristics which qualify them as ‗designs‘ under the Designs Act, 2000 i.e. being novel and original as opposed to merely RFA (OS) No. 25/2006 Page 10 of 72 original as required under the Copyright Act, 1957. The Copyright Act requirement was merely the originality of the work. For a work to be within the meaning of ‗capable of being registered‘, it must satisfy the definition of ‗design‘ as well as the test of the work being novel or original and of it being sufficiently distinguishable from known designs or combination of known designs. While the learned Single Judge noted the respondents submission to the following effect ―..designs in use are built around permutations and combinations of a limited number of motifs/limitations from various sources and requiring very little by way of distinguishing variations to claim originality”, yet he went on to hold that the said works are capable of being registered as designs and the two conclusions are incompatible. It is also found erroneously by the learned Single Judge that there is an element of labour and skill applied to a particular pattern of work in question which clearly required original artistic works and nevertheless a finding was made that the artistic works in question are not ‗original artistic works‘. d. The operation of Section 15(2) of the Copyright Act, 1957 does not exclude from the ambit of copyright protection, the subject/underlying artistic works. Consequently, the original RFA (OS) No. 25/2006 Page 11 of 72 underlying paintings created and acquired/owned by the appellant which were applied to the textiles with certain modifications do fall within the meaning of ‗original artistic works‘ defined under Section 2(c) of the Copyright Act, 1957 and thus entitled to copyright protection. In fact, such works were clearly and expressly excluded from the definition of ‗design‘ in Section 2(d) of the Designs Act. e. The paintings are either purchased from a third party or created inhouse by the appellant, and when an artistic work is purchased from a third party, a Certificate of Authenticity is obtained from the author of that painting, declaring that the copyright and the artistic work is assigned by the owner to the appellant. The original paintings undergo a series of processes and adaptations for them to be applied to fabrics, and each of these paintings and the modified drawings are separately and independently entitled to protection as an ‗artistic work‘ under the Copyright Act, 1957. The intermediate paintings leading to the final product satisfy all the requisites of ‗artistic works‘ and have independent existence by themselves as opposed to technical/engineering drawings solely created for the purposes of production of a corresponding product, which were no more than instructions for manufacturing applied to the product in question to RFA (OS) No. 25/2006 Page 12 of 72 which they may have been applied. The application of adaptations and modifications to such artistic works on fabrics, may under Section 15(2) of the Copyright Act, extinguish the copyright protection therein after 50 productions, but does not affect the copyright protection afforded to the original work as ‗the artistic work‘. It also does not affect the existence of separate copyright in any independent work which may have been used in the context of the creation of a particular product. The copyright in the underlying/original artistic work would continue to subsist and can be enforced by the copyright owner. f. The respondents‘ fabrics being colorable imitations or substantially similar copies of the original underlying modified paintings of the appellant amounted to infringement of the artistic copyright therein. This is particularly so when inspite of the work of the respondent being claimed to be independent, no details of such original independent work were forthcoming. Reliance was placed on the judgment in the case of Rajesh Masrani vs. Tahiliani Designs Pvt. Ltd. [2009 (39) PTC 21 (Del.)] which held that Section 2(d) of the Designs Act, 2000 does not include any artistic work as defined in Section 2(c) of the Copyright Act. It was also held in the above RFA (OS) No. 25/2006 Page 13 of 72 judgment that it is evident from the definition of ‗design‘ under the Designs Act, 2000 that the artistic work as defined in Section 2(c) of the Copyright Act, 1957 is excluded if any party is able to bring his case within the framework of Section 2(c) of the Copyright Act, 1957 while claiming the copyright. In such a situation, the suit for infringement is maintainable. g. Lastly, the plea of unfair competition which was evident from the almost identical product of the respondent was lost sight of. The finding of the learned Single Judge clearly demonstrated that the respondent having copied the artistic work of the appellant were not entitled to protection and such an interpretation has led to the blatant act of copying being permitted on account of mere technicalities. It has also been submitted that in the criminal proceedings instituted by the appellant under Section 63 of the Copyright Act, the Additional Chief Metropolitan Magistrate has rejected the report of the Investigating Officer stating that no case was made out on the following findings: - ―The investigating agency did not consider that the accused by counterfeiting the works of the complainant were intentionally and dishonestly deceiving innocent customers into believing that their products are made by RFA (OS) No. 25/2006 Page 14 of 72 the complainant and thus dishonestly and fraudulently induced them to part with monies for such counterfeit and spurious products. The IO failed to examine the aspect that the accused have committed an offence of cheating and fraud within the meaning of Section 415 & 420 read with Section 120B IPC….‖ 10. The learned senior counsel summarized his arguments as follows:- a. The artistic works of the appellant were original ―artistic works‖ within the meaning of Section 2(c) of the Copyright Act, 1957 and hence the appellant could claim exclusive rights in the same under Section 14(c) of the said Act. b. The true import and content of the definition of Design under the Designs Act, 2000 specifically excludes ―artistic works‖ as defined by Section 2(c) of the Copyright Act, 1957 from the definition of ‗Design‘. c. The artistic works in question being ―artistic works‖ within the meaning of Section 2(c) of the Copyright Act, 1957, were squarely covered within the exceptions carved out under Section 2(d) of the Designs Act, 2000, and were hence ―incapable of registration‖ under the Designs Act, 2000, rendering them protectable, solely under the Copyright Act, 1957. d. Section 15(2) of the Copyright Act, 1957, cannot be said to apply to an ―original artistic works ―, such as those which were the subject matter of RFA (OS) No. 25/2006 Page 15 of 72 the suit and the appeal, which are incapable of being registered as Designs. e. The exclusion in Section 15(2) applies only in respect of works which have been applied to an article and the said article has been reproduced more than fifty times. f. The copyright in the paintings are not extinguished by virtue of Section 15(2) of the Copyright Act, 1957. g. ―Design‖ as defined by the Designs Act, 1911 as well as the Designs Act, 2000; means only the features of shape, configuration, pattern or ornament applied to any article by any industrial process or means; and to be such must satisfy, inter alia, the test of ―new‖ and ―original‖ and not merely ―originality‖ as under the Copyright Act, 1957. h. The analysis to be undertaken to determine whether a work is ―capable of being registered‖ is not whether the same falls into a classification within the Designs Act, 2000 or not but rather whether the work in question satisfies the substantive requirements for registration as a ―design‖. 11 Mr. Arun Jaitley, Sr. Advocate, appeared on behalf of the appellants in FAO(OS) No. 326/2007 titled as Dart Industries Inc and Anr. vs. Techno Plast RFA (OS) No. 25/2006 Page 16 of 72 and Ors. and FAO(OS) No. 447/2008 titled as Mattel Inc and Ors. vs. Jayant Aggarwalla and Ors. He addressed the arguments only on the question of interpretation of Section 15(2) of the Copyright Act as according to him the decision in the present case i.e. Microfibres Inc. vs. Girdhar and Co. and Anr. would also affect the appeals filed by his client. 12. He submitted that his client in the first case is a manufacturer of plastic utility products. The process involved is the preparation of the drawing which is called the first stage which then leads to the production of mould/engraving which is the second stage and from the said mould/engraving, the final product emerges, which is the third stage. 13. As far as the second case of Mattel is concerned, he submitted that the stage of mould/engraving is not there and straightaway from the drawing the product emerges. He further submitted that a design is related to aesthetics and visual features and utility part of the product relates to, at best, the patent and not the design law. He submitted that Section 14(c) of the Copyright Act defines the rights of an owner of a Copyright in an artistic work within the meaning of Copyright Act. By placing reliance on Section 14(c) (i), he submitted that such a copyright owner has a right to reproduce the work either in two-dimensional or three-dimensional products. Section 2(c) which defines ‗artistic works‘ covered specifically both drawings and engravings. The RFA (OS) No. 25/2006 Page 17 of 72 offending product of the respondent, was made by a process of reverse engineering which would involve the taking up of the product, creating a mould from it and finally a drawing. That the moulds and the drawings of the appellant are copyright protectable under the Copyright Act and could not be, and are incapable of forming part of the design registration. Inter alia he submitted that the mould and the drawing do not appeal to the eye as required under Section 2(d) of the Designs Act. Reliance was placed on Section 15(1) read with Section 2(c) of the Copyright Act to submit that upon the registration of a design the loss of copyright is restricted to the stage III i.e. the eventual product. Section 15(1) does not contemplate stages I and II, that is, the drawing and the mould not being protected under the Copyright Act. Section 15 of the Copyright Act in its entirety does not affect stages I and II and will apply to only those cases, which are design registrable and copyright registrable. That in so far as Section 15 (1) is concerned, the copyright is lost immediately upon the registration under the Designs Act and the exclusion under S.15(2) covers the cases which are registrable under the Designs Act and the product is produced 50 times. Reference was made to Section 2(d) of the Designs Act and reliance was placed upon a judgment in Ahuja Intellectual Property Cases Vol.3 NO.5, August 1998 Smithkine Beecham Consumer Health Care vs. Eden Cosmetics Ltd. RFA (OS) No. 25/2006 Page 18 of 72 14. The learned counsel for the respondent no.2, Sh. Rajender Kumar submitted as under: - A. The appellant‘s case was that the claim of artistic copyright in the fabric designs is not affected by the definition of ‗design‘ in the new Designs Act, 2000 which specifically excludes ‗artistic work‘ as defined in Section 2(c) of the Copyright Act, 1957. This plea of the appellant has been termed as incorrect in law and fact by the learned counsel for the respondent no.2. It is submitted that the interpretation negates the rationale underlying the copyright legislation and the design legislation and is not only anti-competitive but also would throttle and stagnate the industry. Reliance has been placed on the case of Interlego A.G. vs. Tyco Industries Inc. (1988) R.P.C. 343; Premier Hangers CC vs. Polyoak (PTY) Ltd. (1997) (1) SA 416 and S.S. Sarna Inc. and Anr. vs. Talwar and Khullar Pvt. Ltd. and Ors. I.A. Nos. 6597 and 6944 of 1991 in Suit No. 1481 of 1991 decided on August 08, 1991. B. Reliance on the above judgments has been placed to show that the copyright protection relates to the image per se and design protection is for the manufactured article as a whole. While the protection of the image per se confers a very broad protection, the protection of the manufactured article confers only a limited monopoly. C. The term ‗artistic work‘ under the Copyright Act, 1957 include two RFA (OS) No. 25/2006 Page 19 of 72 dimensional works such as drawings, paintings, photographs and engravings and three dimensional works such as sculptures, models and works