Delhi High Court Sets Aside Single Judge's Decision, Allows Crocs' Passing Off Suits

Delhi High Court Sets Aside Single Judge's Decision, Allows Crocs' Passing Off Suits

Introduction

A Division Bench of the Delhi High Court has set aside a 2019 single judge ruling that had dismissed a batch of suits filed by Crocs Inc. USA against several Indian footwear manufacturers over copying of its distinctive shape and design. The Court has revived Crocs' claims of passing off and ordered that the suit be restored to the file of a single judge for trial.

Factual Background

Crocs Inc. USA filed multiple suits against several Indian footwear manufacturers, including Bata India, Liberty Shoes, Relaxo Footwear, Action Shoes, Aqualite, and Bioworld Merchandising, alleging that they had copied the distinctive shape and design of its foam clogs. Crocs claimed that the companies had passed off their products as those of Crocs, thereby misleading consumers and riding on the reputation Crocs has built globally.

Procedural Background

A single-judge of the Delhi High Court had dismissed all six passing off suits at the preliminary stage, holding that they were not maintainable. The single-judge concluded that Crocs could not claim passing off protection for the same product configuration that was already protected as a registered design. The Court held that Crocs was attempting to assert a "dual monopoly" - seeking perpetual common law protection under trademark law for what was already granted limited-term statutory protection under the Designs Act.

Issues Involved

1. Passing Off: Whether Crocs can claim passing off protection for its distinctive shape and design.

2. Registered Designs: Whether the registered designs under the Designs Act, 2000, bar Crocs from claiming passing off protection.

Contentions of the Parties

Crocs' Contentions: Crocs argued that the Indian footwear manufacturers had passed off their products as those of Crocs, thereby misleading consumers and riding on the reputation Crocs has built globally.

Defendants' Contentions: The defendants argued that Crocs could not claim passing off protection for the same product configuration that was already protected as a registered design.

Reasoning & Analysis

The Division Bench Justice C. Hari Shankar and Justice Ajay Digpaul have overturned the single judge's decision and revived Crocs' claims of passing off. The Court held that passing off is a distinct right, which resides in its own common law space, apart from and independent of, the confines and constraints of the Trade Marks Act, or the Designs Act, or any other statute.

The Court rejected the restrictive interpretation of the Carlsberg Breweries judgment that had been used to justify dismissing the suits, clarifying that no additional elements beyond the registered design are required for a passing off action. The Court emphasized that passing off actions can be brought even if the product configuration is already protected as a registered design.

Final Outcome

The Division Bench set aside the impugned judgment and restored all the commercial suits for adjudication on merits. The Court ordered that the suit be restored to the file of a single judge, who is expected to proceed with the trial.

Implications

The Court's decision has significant implications for intellectual property law in India, particularly with regards to passing off actions and registered designs. The decision establishes that passing off actions can be brought even if the product configuration is already protected as a registered design, and that passing off is a distinct right that operates independently of statutory intellectual property protections.

In this case Crocs was represented by Mr. J Sai Deepak, Senior Advocate along with Mr. Shravan Kumar Bansal, Mr. Ajay Amitabh Suman, Mr. Gaurav Gogia, Mr. Rishi Bansal from United & United along with Mr. Avinash Kumar Sharma, Advocates.

In this case Bata was represented by Mr. Neeraj Grover, Mr. Angad Deep Singh, Mr. Mohona Sarkar and Mr. Kashish Vij, Advocates.