India: Carlsberg Breweries vs. Som Distilleries And Breweries Ltd: A Composite Suit For Design Infringement And Passing Off Is Maintainable

This article is an attempt to analyze the judgement passed by a five-judge bench of the Hon'ble Delhi High Court in Carlsberg Breweries A/S v. Som Distilleries And Breweries Ltd C.S. (COMM) 690/2018, overruling the judgement in the case of Mohan Lal v. Sona Paint, 2013 (55) PTC 61 (Del) (FB) (hereinafter referred to as the "Microluble Judgement"). By way of this judgement, the Hon'ble Court has settled the position with regard to maintainability of composite suits for infringement of registered design and passing off.

Factual Background

The present suit was filed, complaining of infringement of a registered design as well as passing off (of the Plaintiff's trade dress) in respect of the bottle and overall get up of the "Carlsberg" mark. The reliefs claimed in the present suit were, inter alia, infringement of registered design and passing-off.

Legal Proposition

The moot point which arose in this case, which the Ld. Single Judge referred to the five judge bench, was in relation to maintainability of a composite suit in relation to infringement of a registered design and for passing off, where the parties to the proceedings are the same, in light of ORDER II RULE 3, CPC. The above-mentioned issue was perused in light of the decision in the Microluble Judgement.

Ratio of the Microluble Judgement

As per the ratio of the decision in Microlube Judgement a composite suit for infringement of registered design and passing off cannot be filed, and two separate suits need to be filed, which can be tried together, provided the Court has the jurisdiction to do so.

The decision in Microlube Judgement imports the principle laid down in the case of Dabur India Limited v. K.R. Industries (2008) 10 SCC 595 (hereinafter referred to as "Dabur India") which states that two causes of action cannot be combined.

As per the Microlube Judgement, a suit for design infringement is premised on the monopoly granted by registration on account of uniqueness, newness and originality of the design, whereas a claim for passing off is based on the use of a mark in the trade for sale of goods and services. Therefore, given the difference in the nature of causes of action, the two cannot be combined in a composite suit and separate suits have to be filed for design infringement and passing off.

Contentions of the Parties

The contentions raised by the parties are briefly, as follows:

Plaintiff

The counsel for Plaintiff argued that the position set out in the decision of Microlube Judgement is erroneous for two broad reasons. One, because Order II Rule 3, CPC was over-looked which clearly provides for joinder of different causes of action in the same suit, Two, because the decision of Dabur India was misconstrued. As per the counsel of the Plaintiff the decision in Dabur India provided that different causes of action cannot be clubbed together only if the same Court lacks the territorial jurisdiction to deal with both of them.

It was further contended by the counsel for the Plaintiff that Order II Rule 3, CPC should be read with Order I Rules 2 and 3, which enshrine within themselves the following dual fundamental principles:

  • Needless multiplicity of suits should be avoided.
  • The trial of suits should not be embarrassed by simultaneous investigation of totally independent and unconnected controversies.

The counsel also highlighted that if the Court feels that it is inexpedient to try multiple causes of action in a common suit, there lays a recourse to order separate trials under Order II Rule 6, CPC. Therefore, the Court is clothed with the power to order separate trials but not separate suits.

On the basis of the above, the counsels for the Plaintiff broadly contended that the joinder of allegations design infringement and of passing off, based on the same transactions and against the same Defendant, was not a case of misjoinder of causes of action which would attract rejection/return of Plaint under Order VII Rules 10 and 11, CPC.

Defendant

It was contended by the counsel for the Defendant that two disparate causes of action were incapable of being tried in one suit. Despite the underlying facts being common, the nature of reliefs claimed were in many senses mutually exclusive, therefore rendering a common trial inherently inconvenient. In the support of the contention, the Defendant's counsel stressed on submission that if in a suit for design infringement, the validity of the design is challenged, the Court has to cede the suit, which then has to be considered per force by the High Court, whereas no such compulsion exists in respect of a passing off suit, thereby differentiating the two causes of action.

The counsels for the Defendant argued that in the two claims, of infringement and passing off, there were diverse and disparate elements because of which their trials would involve contradictory and diametrically different elements, best suited to be tried separately. It was also argued that under a composite suit, there will be parallel enquiry that the Court will have to undertake. It could also lead to the Plaintiff being faced with contradictory situations, for example the Plaintiff could be required to show prior user which could evidence invalidity of a design.

It was further argued that composite suits cannot be used to confer jurisdiction on a court which otherwise does not have jurisdiction to try one of the causes of action.

The counsels for the Defendant further argued that, unlike Order I Rule 9, which states that no suit can be defeated on the ground of mis-joinder and non-joinder of parties, no provision of such nature exists in Order II, CPC. Therefore, a suit can be rejected on the ground of misjoinder of causes of action.

It was also submitted that Order II Rule 3 is an enabling provision which allows a plaintiff to institute a composite suit, however it does not give an absolute right to the Plaintiff. The said provision is not mandatory.

Therefore, the Defendant's counsel contended that a suit in which reliefs of design infringement and passing off are clubbed ought to be rejected.

Points for Consideration

The Hon'ble Court framed the following points for consideration:

(a) Is the Court compelled by anything in law to reject a plaint for misjoinder, if two causes of action cannot be clubbed?

(b) Are the two causes of action, i.e. a claim for design infringement and the other for passing off, so disparate or dissimilar that the Courts cannot try them together in one suit?

Analysis and Conclusions

Point (A)

In order to address the question raised, the Hon'ble Court examined Orders I and II, CPC. It was observed that a conjoint reading of Order I Rule 3 and Order II Rule 3 would indicate that question of joinder of parties also involves joinder of causes of action. This position is premised on the principle that if one is made a party to a suit because of a cause of action against him; when the causes of action are joined the parties too are joined. Therefore, the subject of joinder of causes of action is a mirror image of issue of joinder of parties. Provisions of Order I, Rules 3A, 4, 5 and 9, CPC which state that the suit shall not be barred and/or defeated as a consequence of misjoinder or non-joinder of parties, would also apply to Order II, CPC. Therefore, when a plaint suffers from misjoinder or non-joinder of parties or causes of action, the same is not barred by law or be liable to rejection. Throwing light on Order VII Rule 11, CPC, it was observed that an objection to frame of suit is at best a procedural one and cannot result in rejection of plaint (unlike section 80, CPC in which the bar is absolute). The Court heavily placed reliance on the case of Prem Lata Nahata and Another v. Chandi Prasad Sikaria, (2007) 2 SCC 551 (hereinafter referred to as "Prem Lata") in making these observations.

Dealing with the decision in Dabur India, the Court observed that in those facts, the causes of action could not be joined because the Court lacked the territorial jurisdiction to try each cause of action. That, however, does not mean that per se the Court does not have jurisdiction to try a composite suit encompassing two causes of action.

The Court also observed that the CPC visualizes in Order II, Rules 4 and 5, what causes of action cannot be united in one suit. These are express bar or exceptions to Order II Rule 3. Therefore, in presence of such express bar, there cannot be any other implied bar or exception.

The Court also observed that Order II Rule 6 enables the Court to segregate different causes of action, if it is inconvenient to try them together, or it is likely to embarrass the proceedings. Analysing the said provision, it is observed that it enables the court to order separate trial, direct sequencing of trial of disparate issues or to take any other step to facilitate the task of the Court but not to reject the plaint.

On the basis of the above-mentioned points, the court concluded that the decision in Microlube Judgement, that two causes of action, one for relief in respect of passing off, and other in respect of design infringement cannot be joined, is erroneous and accordingly overruled.

Point (B)

In order to address this question, the court examined the differences in the nature of suits for design infringement and one for passing off. Upon a detailed examination, the court observed that in regard to both the causes of action, suit claims are against the same defendants and in respect of the same set of acts or transactions. The only difference is that the relief claimed is different.

The court observed that the factual overlap is with respect to presentation- in the design, it is the novelty and aesthetic presentation; in a passing off action, it is the distinctiveness of a mark with the attendant association with the owner. In order to show infringement, fraudulent imitation has to be proved and to show passing off, misrepresentation by the defendant to the public and consequent harm to the plaintiff's reputation has to be shown.

It was observed that is evident that there is a similarity in the two causes of action. The complaint of passing off as well as that of design infringement emanate from the same fact - sale or offer for sale, by the defendant of the rival product.

The court observed that the basic facts which impel a plaintiff to approach a court, complaining of design infringement are the same as in the case of passing off. In such circumstances, it is inconceivable that a cause of action can be "split" in some manner and presented in different suits. In this context, this court notes that whereas Order II Rule 3 enables plaintiffs to join disparate causes of action, Order II Rule 2 compels the whole claim to be clubbed together.

The court also opined that a composite suit has the advantage of a bird's eye view by the court, with respect to a common set of facts - if for some reason, the claim for design infringement is prima facie weak and the plaintiff cannot secure interim relief, it does not have to face uncertainty of another action before another court; the same court can review the same facts and evidence, and conclude pendente lite, if prima facie passing off is made out, necessitating interim relief.

Conclusion and Comments

The Hon'ble Court has, by way of the present decision, set out the principle that the reliefs of design infringement and passing off can be clubbed together in a composite suit if causes of action arise from the same set of transactions and provided that the court has the necessary jurisdiction in respect of both the causes of action independently.

The present decision is a welcome move by the Hon'ble Court, since it not only reduces multiplicity of suits, but also avoids creating contradictory situations by ensuring that the same set of facts are being examined by a single forum and not multiple fora.

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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