Walking The Lines Between Trade Dress And Design Rights: Crocs' Battle To Protect Its Distinct Design And Shape

While dealing with intellectual property rights disputes, legal lines often get blurred when it comes to protecting product aesthetics. The Designs Act, 2000 and the Trade Marks Act, 1999, serve two different purposes for protecting the design or shape of a product; however, there are instances when the two intersect. This intersection became a focal point of dispute between Crocs Inc. USA, a global footwear company, and several Indian footwear companies, including Bata, Liberty, Relaxo, Action, and others. The matter of Crocs Inc. USA vs Bata India & Ors. involved Crocs seeking assertion of its intellectual property rights over the distinctive shape of its clogs against the Indian footwear companies.

The present suit involved fundamental questions of IP law, specifically whether the shape of a product, protected as a registered design, also acts as a source identifier under trademark law. Further, the matter revolved around the issue of whether the same shape could be enforced through the remedy of passing off.

Section 2(d) of the Designs Act, 2000, defines what constitutes a "design" while explicitly excluding anything that is a trademark under the Trade Marks Act. This implies that if a design is used as a trademark, obtaining registration for the same under the Designs Act would be questionable.

Even without trademark registration, Indian law protects business goodwill through the common law tort of passing off. A business can succeed in a passing off action if it proves that it has built a reputation or goodwill in a distinctive mark or get-up, the defendant misrepresented their goods as being connected to the claimant, and this misrepresentation caused or is likely to cause damage.

However, a critical question arises: when the "distinctive" element claimed to be passed off is a registered design, does this still apply? In Mohan Lal vs Sona Paint and Hardwares [200 (2013) DLT 322 (FB)], a Full Bench of the Delhi High Court held that a plaintiff could maintain separate actions, one for design infringement and another for passing off, even if both concern the same product. It also held that while the Designs Act does not expressly save common law rights, there is no bar against passing off claims being pursued alongside design rights, provided the plaintiff can show that the shape had acquired distinctiveness.

Separately, in Carlsberg Breweries vs Som Distilleries [256 (2019) DLT 1 (FB)], a larger Bench clarified that while composite suits for design infringement and passing off are procedurally permitted, the passing off action cannot rely solely on the features protected by the design registration. Instead, the plaintiff must show that the product's trade dress includes additional elements beyond the design, such as packaging, colour scheme, or branding that distinguish it in the market.

In the present matter, Crocs Inc. held Indian Design Registration No. 197685 for the shape of its clog-style footwear, dating back to 2004. The company claimed that over the years, this unique design had become widely recognised and associated with the Crocs brand globally. It did not, however, have a trademark registration for the shape in India.

When Indian footwear companies began marketing footwear that resembled Crocs' designs, Crocs filed a series of civil suits in the Delhi High Court, alleging not only design infringement but also passing off, claiming that the defendants' footwear was likely to deceive consumers into believing they originated from Crocs. The suits did not progress on the merits. Instead, the core issue became whether such suits were legally maintainable in the first place.

The Single Judge dismissed Crocs' suits in 2019, holding that Crocs was essentially seeking a dual monopoly: protection under the Designs Act, which is time-limited and offers narrower rights, and simultaneously under the passing off law, which could potentially extend protection in perpetuity. The Court noted that Crocs had not claimed any unique feature other than the registered design itself. There was no evidence of additional elements, such as colour, packaging, or logos, being misused by the defendants. Therefore, the court concluded that Crocs could not use the same design as a basis for a passing off claim.

The Division Bench of the Delhi High Court disagreed with that reasoning and held that registration under the Designs Actdoes not bar a party from seeking protection under common law for passing off, so long as the design has attained secondary meaning, i.e., consumers associate the shape with a specific source or brand. The Court emphasised that trade dress protection is a broader concept than trademark infringement and may cover the overall visual appearance of a product if it has become distinctive.

Further, the Court opined that the Single Judge had prematurely dismissed the suits without examining the evidence or considering Crocs' plea for interim relief. The Bench was of the view that the issues involved could not have been decided straightaway by a mere reading of the plaint. It was also of the view that the Single Judge erred in presuming, at the very outset, that the subject matter of Crocs' passing off claim was only its registered design, and nothing else, or beyond that. The Bench observed that the maintainability of a suit must be judged in light of the legal cause of action and not decided summarily when the issues are fact-intensive and require trial. The Court opined that the dismissal of Crocs' suits cannot be sustained in law and accordingly quashed and set aside the impugned judgment, dated February 18, 2019, of the Single Judge.

As a result, the High Court revived all of Crocs' suitsand remanded them back to the Single Judge, who would be required to proceed with the matters from the stage at which the impugned judgment was passed. The Court made it clear that the dismissal of the suits solely on the ground that a registered design cannot be a trade dress was legally erroneous.

The ruling also impacts FAO (OS) (Comm) 358/2019, an appeal filed by Dart Industries Inc., which was linked to the same underlying legal issue. Since the dismissal of Crocs' suits was the basis for rejecting Dart's application for interim relief, the Division Bench directed reconsideration of Dart's matter in light of its ruling on maintainability.

Significance of the Decision

This judgment clarifies that design rights and trade dress rights can co-exist, and a product shape, even if registered as a design, can form the basis of a passing off claim if the plaintiff can establish goodwill and deception. The decision strengthens the rights of design-led companies and aligns Indian IP laws more closely with international practices, where trade dress protection is well-established in common law systems.

In conclusion, the Delhi High Court's ruling marks a major win for brand ownerswho rely on distinctive product shapes and packaging as part of their identity. It strengthens the principle that courts must allow genuine IP disputes to proceed to trial, particularly where issues of consumer association, goodwill, and confusion are involved. The revived suits will now proceed for adjudication on merits, where Crocs will have the opportunity to prove that its product design and trade dress have acquired distinctiveness in the Indian market.

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