India: No Copyright Lies With Any Work Registrable Under The Designs Act, 2000

INTRODUCTION:

Delhi High Court recently disposed-off the suit filed by the Holland Company LP seeking injunction to restrain S.P. Industries from manufacturing or selling Automatic Twist Lock [ATL] and spare parts in 3-D form, evolving from the 2-D artistic work of Holland Company LP in the form of industrial drawings.

Plaintiff sought an interim injunction restraining defendant from manufacturing a product on the grounds that it was infringing the plaintiff's copyright on its engineering drawings. The plaintiff Holland Company LP and its Indian Partner, claimed to have invented "automatic twist locks" – ATL, to help secure containers on the railcars. The system is used by the Indian Railways which put out a tender for procurement of the ATL systems.

RELEVANT LAW:

Section 15 in the Copyright Act, 1957

As per the Section 15 of the Copyright Act, 1957, there is a special provision regarding copyright in designs registered or capable of being registered under the Designs Act, 2000. The copyright shall not subsist in any design which is registered under the Designs Act, 2000 and further the copyright in any design, which is capable of being registered under the Designs Act, 2000, 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 license, by any other person.

In this regard, as soon as any article to which a design has been applied has been reproduced more than 50 times by an industrial process, it ceases to have any copyright on the same. Meaning thereby the author will lose any protection or right over the creation as the owner has not opted for Design Registration and also has reproduced the article bearing the design more than 50 times by an industrial process.

FACTS OF THE CASE5:

The suit was filed by Plaintiff 1-Holland Company LP along with its exclusive licensee in India Plaintiff 2- Sanrok Enterprises. The Plaintiffs deals in the railways supply industry for car/wagon components, and manufactured and supplied the Indian Railways with ATL, which is a system for securing cargo containers to a support. The Plaintiffs also claimed to have a copyright over the industrial drawings of the ATL and spare parts thereto. Plaintiff 2 is the exclusive licensee of the Plaintiff no. 1 in India for manufacturing, selling, marketing and servicing ATL and spare parts. The Plaintiffs had previously supplied the drawings of the ATL device and its spare parts to Indian Railways, who thereafter used it on its BLC Wagon.

The Eastern Railway, Sealdah Division then floated a tender for carrying out the repairs, replacement of spare parts and the servicing of the defective parts for the ATL devices for BLC Wagon.

S.P. Industries ('Defendant') successfully outbid the Plaintiffs, and received the ATL repair contract. The Plaintiffs claimed that the Defendant do not have the requisite know-how to replace and repair the spare parts of the ATL devices which was earlier supplied to the Indian Railways by the Plaintiffs. That since Plaintiff have created the ATL devices, they have the right to maintain and sell the spare parts of the same and no other party has any right over the same. Accordingly, the said suit was instituted for permanent injunction.

The Hon'ble High Court of Delhi vide its order dated May 20, 2014, had dismissed the application filed by the Plaintiffs under Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908 seeking permanent injunction against the Defendant. Aggrieved by the said order, the Plaintiff filed an appeal bearing no. CS (COMM) 1419/2016 wherein vide order dated September 12, 2014, the Hon'ble Court was directed to decide the application afresh.

PLAINTIFFS' CLAIMS6:

  • The spare parts being the subject matter of the above-mentioned tender are components of ATL devices manufactured and supplied by the Plaintiffs, who also claim to have a patent over the said device (an application for registration of the patent has been moved and published) and copyright over the industrial drawings of the ATL and its spare parts.
  • Plaintiffs are the first owners of the ATL devices and spare parts thereof, and since the Plaintiffs possess copyright and patent over the same, no third party has the right to sell, manufacture, offer to sell or advertise ATL devices or spare parts thereto.
  • Plaintiffs held that the Defendant has intentionally, deliberately, knowingly and willfully offered its substandard products and services for use in Indian Railways.
  • Considering Section 2 (c), Section 13 (1) (a) and Section 14 (c) (i) (B) of the Copyright Act, 1957, it shows that a copyright exists in engineering drawings/technical drawings under the category of Artistic Works, which includes the exclusive right to depict the drawings in three dimensions. That such engineering drawings/technical drawings need not possess any artistic qualities to claim protection under Section 2 (c) of the Copyright Act, 1957.
  • The Designs Act, 2000, features "appeal to the eye alone" and it does not apply to the "functional" features. It is submitted that the Designs Act, 2000, therefore, is not applicable on the industrial/engineering drawings and technical drawings.
  • Further that the owner neither relinquished nor entered in public domain its copyright, it cannot be said that the work has entered in public domain.
  • Claim of the plaintiffs is that the drawings of ATL device and of its parts belong exclusively to the plaintiffs and that it is an artistic work in which plaintiffs have copyright

DEFENDANT'S CLAIMS7:

  • As per defendants, the industrial drawings are not an artistic work and, therefore, no copyright exists. The Plaintiffs are not the real author of the work and hence, by necessary inference, are not entitled to protection under the law. Even if it was presumed that the Plaintiffs are the authors of the industrial drawings of the ATL, the same are capable of being registered under the Designs Act, 2000, are exempted from the purview of the Copyright Act, 1957.
  • By virtue of Section 15 of Copyright Act, 1957, no copyright exists in any drawing or design once the production has been done more than 50 times by an industrial process using such drawing or design, and that the Plaintiffs have themselves admitted that they have supplied ATL devices to the Railways and thus by using drawing they have reproduced more than 50 articles.
  • After having lost the tender, the Plaintiffs now cannot claim to have the exclusive rights to repair and replace the ATL devices which belong to Indian Railways. Further, it was contended that the Plaintiffs also cannot be said to have exclusive intellectual property right over the said drawings since these drawings have been published and are readily available in the market.
  • The defendant is not infringing any copyrights of the plaintiff rather it is acting as per the contract awarded to it by the Railways for service and maintenance of ATL.

COURTS DECIDED ON THE FACTS8:

  • "A conjoint reading of Section 2(d) of Designs Act, 2000, Section 14(c) and 15(2) of the Copyright Act, 1957, makes it amply clear that where a design of an article is prepared for the industrial production of an article, it is a design and registrable under Designs Act and under Section 14(c), the author of such design can claim copyright. However, since such a design is registrable under the Designs Act, and if such design has been used for production of articles by an industrial process for more than 50 times by the owner of the copyright, or, by any other person with his permission, then such person ceases to have copyright in such design."
  • "Plaintiffs had prepared the engineering drawings for the purpose of production of ATL devices. The industrial drawings are, therefore, a design of the ATL device which the Plaintiffs had supplied to the Railways under a contract given to them by the Railways. The drawings of the ATL devices of the Plaintiffs, therefore, are registrable under the Designs Act. The said drawings have not been registered under the Designs Act. The Plaintiffs have also not disputed the fact that while using these engineering drawings, it had used for more than 50 ATL devices by an industrial process. Therefore, it is clear that it has used these engineering drawings for more than 50 times in an industrial process. By virtue of Section 15(2) of Copyright Act, therefore, even if assuming the Plaintiffs had a copyright in these engineering drawings, it ceases to have the same."
  • "The Plaintiffs have not made the Railways a party to the suit although in the facts and circumstances of the case it is a necessary party because prima facie it is the Railways who have used the engineering drawing of the ATL devices for inviting tenders."

Decision by the Court9:

"For being entitled to interim injunction under Order 39 Rule 1 and 2, the Plaintiff is required to show a strong prima facie case which means that the Plaintiff is required to show that it has a right which needs protection. The Plaintiffs have failed to show any prima facie case in their favour. In the light of the same, the application of the Plaintiffs under Order 39 Rules 1 and 2 CPC stands dismissed."

Footnotes

5 CS(COMM) 1419/2016

6 CS(COMM) 1419/2016

7 CS(COMM) 1419/2016

8 CS(COMM) 1419/2016

9 CS(COMM) 1419/2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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