Navigating the Jurisdictional Labyrinth: A Critical Examination of Challenging Registered Designs in India

In the contemporary landscape of intellectual property, registered designs serve as a pivotal tool for fostering product differentiation and brand recognition. The protection of these designs safeguards the aesthetic features of products that distinguish them further in the marketplace. In India, the Designs Act, 2000 (“Act”) furnishes a comprehensive legal mechanism for design registration, granting the proprietor exclusive rights provided the designs satisfy the criteria of novelty and originality. These rights enable the owners to protect their designs from unauthorized use, ensuring that their creative, innovative, and aesthetic efforts are legally recognized and safeguarded. Registration under the Act not only confers exclusivity but also enhances the commercial value of the designs, offering a significant competitive advantage in the marketplace.

However, the Act acknowledges the potential for erroneous registrations, as disputes frequently arise regarding the legitimacy of registered designs. Consequently, it empowers aggrieved parties to seek revocation, necessitating a robust legal framework for revocation and infringement proceedings. This article delves into the intricacies of contesting registered designs in India, with a particular focus on the jurisdictional conundrum presented by Sections 19 and 22 of the Act.

Two pivotal Sections of this Act, Sections 19 and 22, offer valuable insights into the intricate process of challenging design registrations and mitigating the issue of design piracy. Section 19 of the Act grants any interested party the right to file a petition seeking the cancellation of a registered design on specific grounds, such as prior registration, publication, lack of novelty, or non-registrability under the Act. It serves as a crucial check against the potential misuse of design registrations, ensuring that only legitimate and original designs are afforded protection.

Complementing Section 19, Section 22 addresses the critical issue of design piracy, prohibiting the unauthorized application of a registered design or its fraudulent imitation for the purpose of sale. This Section grants the registered proprietor the exclusive right to utilize the design, safeguarding their intellectual property and deterring potential infringers. The scope of protection extends beyond the domestic market, prohibiting the import of articles bearing the registered design or its imitation without the proprietor’s consent.

Additionally, Section 22(3) provides a right to seek revocation of the registered and asserted design on grounds available under Section 19 of the Act. Further, Section 22(4) mandates that whenever any ground on which the registration of a design may be cancelled under Section 19 has been availed of as a ground of defence under sub section (3) in any suit or other proceeding for relief under sub-section (2), the suit or such other proceedings shall be transferred by the Court in which the suit or such other proceeding is pending, to the High Court for a decision.

The Act provides a bifurcated framework for contesting registered designs. Section 19 of the Act vests the primary authority in the Controller to cancel a registration of a designs on various grounds. The said Section makes it abundantly clear that such a revocation petition is to be filed before the Controller-General of Patents, Designs and Trade Marks (“Controller”) who has granted the registration for the design in question.

Conversely, Section 22(4) mandates that where the registration of a design is challenged in defending any suit or other proceeding, such suit or proceeding must be transferred to the High Court.  Section 22(3) and 22(4) of the Act are available only to parties involved in a suit concerning infringement of a registered design, providing a cause of action only where a registered design is applied or caused to be applied to any article for the purposes of sale.

Section 22(4) provides,

" ... where any ground on which the registration of a design may be cancelled under Section 19 has been availed of as a ground of defence under sub-section (3) in any suit or other proceeding for relief under sub-section (2), the suit or such other proceeding shall be transferred by the court, in which the suit or such other proceeding is pending, to the High Court for decision.’"

While this seemingly offers a clear-cut rule for determining jurisdiction, complexities arise in determining the relevant “High Court” to approach for the revocation of the registered design.

The Supreme Court resolved this dilemma in SD Containers v. Mold-Tek Packaging Ltd., and held that the term “High Court” under Section 22(4) of the Act also includes a High Court that does not have ordinary civil jurisdiction.

Herein, the respondent (Mold-Tek) had initiated a design infringement suit against SD Containers seeking permanent injunction against use of its registered designs. Subsequently, a counter-claim was filed by SD Containers seeking the cancellation of registration of Mold Tek’s design under Sections 19 and 22 (4) of the Act, warranting the transfer of the petition to the High Court of Madhya Pradesh. However, the Commercial Court of Indore transferred the suit to the Calcutta High Court since the designs were registered in Kolkata. On an appeal filed by SD Containers before the High Court of Madhya Pradesh (Indore Bench), the High Court took a view that the Commercial Court Indore is itself competent to decide the suit in terms of the Commercial Courts Act, 2015.

The Hon’ble Supreme Court, while taking note of various Sections of the Commercial Courts Act, 2015 (“Commercial Courts Act”), the Designs Act 2000 and various precedents cited before it, held that there is no inconsistency between the two Acts and such suits where the registration of a design is challenged under Section 22(3), ought to be transferred before the High Court. One of the arguments raised before the apex court, that such suits cannot be transferred to a High Court which does not have Ordinary Original Civil Jurisdiction, was rejected.

Upon reviewing Section 7 of the Commercial Courts Act, the Supreme Court concluded that it pertains solely to High Courts with ordinary original civil jurisdiction and that there is no provision in the Commercial Courts Act either prohibiting or permitting the transfer of proceedings under the Designs Act to High Courts without such jurisdiction. The Court asserted that if there is a counter-claim for the cancellation of registration, then the transfer of the suit to the High Court is mandatory and a ministerial act, regardless of the High Court’s jurisdictional status. The Court further distinguished between revocation action which is before the Controller and an infringement suit by asserting that they are independent provisions leading to different and distinct causes of action. The Supreme Court ultimately determined that, since the cause of action arose in Madhya Pradesh, the suit should be transferred to the Madhya Pradesh High Court, Indore Bench.

Recently, in Novateur Electrical v. V-Guard Industries, an objection was taken by the plaintiff that a separate petition in the form of a counter-claim by a defendant challenging the design registration of a plaintiff is not maintainable before the High Court under the Design Act 2000 and such separate petitions ought to be filed before the Controller under Section 19 of the said Act. The Hon’ble High Court of Delhi, rejected such arguments while relying upon SD Containers v Mold-Tek (supra) and held that the right to seek revocation of a registered design under Section 19 is independent of the right to raise invalidity of the registered design as a ground of defence in a piracy proceeding under Section 22 of the Act. The Delhi High Court noted that the Supreme Court in SD Containers v Mold-Tek not only transferred the suit to the High Court but also transferred the counter- claim which was separately instituted by the defendant.

In the realm of intellectual property litigation, particularly design protection, a unique situation can arise. In a situation where the plaintiff initiates a lawsuit alleging infringement of its registered design, the defendant may take a defence that the design in question used by it is also registered. This scenario presents the plaintiff with a potential grievance – the validity of the defendant's subsequent registration. Consequently, the critical question arises about the legality of a plaintiff challenging such registration, the form of such challenge and consequently the correct jurisdiction for such challenge.

The decision of the Bombay High Court in Whirlpool v. Videocon, gives some insight on these queries.  The High Court of Bombay, while dealing with a question as to whether a suit for infringement can lie against a Defendant who is also a registered proprietor, held that such suits are perfectly maintainable The Court distinguished the remedies available to a plaintiff in cases of a design infringement. First, the plaintiff has the right to approach the Controller under Section 19 of the Act, whereby, the plaintiff also has the option to file an appeal against the decision given by the Controller in the High Court. Second, the plaintiff also has the option of getting the proceedings transferred under Section 22(4) of the Act to the High Court, which is a separate option, and gives rise to a completely different cause of action, as compared to Section 19 of the Act. The Court stated that Section 19 and Section 22 of the Act operate independently in different circumstances. Section 19 of the Act is invoked to seek cancellation of a registration of a design. Section 22 of the Act is invoked where a registered designs of a proprietor is infringed by any person and the registered proprietor seeks reliefs in the form of damages, injunction, etc. against the infringer. Such relief can be sought even against a registered proprietor of a designs by questioning his registration. The Court clearly held that Court can examine not only the registrations of the plaintiff but also of the defendant.

A conjoint reading of the decisions in Whirlpool v Videocon, SD Container v Mold-Tek and Novateur Electrical v. V-Guard Industries leads to a conclusion that a defendant’s design registration can be called in question in a suit initiated by the plaintiff; and that Section 22(3) and 22(4) of the Design Act not only envisages a defence but also a separate pleading in the form of counter-claim. Further, Section 22(3) and 22(4) of the Designs Act 2000 are of wide import as it not only includes the “Suit” but also “other proceeding”. Therefore, it can be said that in a suit where the plaintiff is aggrieved by the defendant’s use of a registered design and the defendant uses its registration as ground of defence, the plaintiff is very well within its powers to file a proceeding before the Court challenging the design registrations of the defendant. If the suit is being initiated in a District Court, the suit and the proceeding are to be transferred before the High Court within whose jurisdiction the issue arises.

The article is jointly compiled by Vinod Chauhan, Principal Associate, Singh & Singh Law Firm LLP and Disha Gandhi VII Semester (B.A. LLB) NLU Jodhpur.