Recently the Delhi High Court while awarding the judgment in Midas Hygiene Industries Pvt. Ltd. vs. Sudhir Bhatia (Regular First Appeal No: 239, 240 and 241 of 2011) held that the LABELS on packages of goods are excluded from the definition of “DESIGN” under the Designs Act, 2000. The Delhi High Court, vide its judgment dated November 09, 2015 in the above mentioned case clarified the conflicting, rather overlapping provisions of the Copyright Act, Trademarks Act and the Designs Act.

Facts:

The Appellants, Midas Hygiene Industries, claim to be pioneers for production of insecticides and pesticides in the form of chalks and started commercially selling these chalks in India under the brand name of “Krazy Lines” and “Laxman Rekha” in around 1989. Subsequently, the Appellants registered the said trademarks in 1991, and also got a copyright registration of the packaging of the products.

The Respondent was employed by the Appellants from 1985 until 1992, when he started production of identical chalks under the similar trademarks “Krazy Lines” and “Laxman Rekha”. Pursuant to a series of legal battle between the Appellant and Respondent, the Supreme Court vide its judgment in 2004 (3) SCC 90, finally restrained the Respondent from using the said trademarks.

Subsequently, the Respondent filed a Rectification Petition before the Copyright Board seeking cancellation of copyright numbered A-55884/99 for “Krazy Lines”, A-55885/99 for “Laxman Rekha” and A-55334/91 for “Laxman Rekha” and “Krazy Lines” as they fell under the purview of Section 15 (2) pf the Copyright Act. The Board accordingly ordered cancellation of the said copyrights in the order dated 04.04.2011, which is the subject matter of the present Appeal.

Section 15 (2) of Copyrights Act: The Copyright in a design, which is capable of registration under the Designs Act, but is not so registered, shall cease to exist as soon as the article, to which such design is applied, is produced more than fifty times through an industrial process.

Contentions:

The Appellant contented that the Copyright Board, which made the impugned order for cancellation, had erred in upholding that the Appellant’s registration regarding the artistic work, in respect of which it had copyright, was capable of design registration also, and that the omission to apply for and obtain the design registration attracted Section 15 (2) of Copyrights Act and subsequently resulted in cessation of the copyright.

It was also contented that copyright used as a label, does not in any manner cease to be an artistic work and the use of the copyright as a label while packing the insect-repellent chalk does not render the packaging a design, which in turn is required to be compulsorily registered. Therefore, on behalf of the Appellant it was submitted that the artistic work was incapable of design protection and thus fell outside the ambit of Section 15 (2).

Observation:

Clarifying the seeming overlap between three intellectual property rights, viz. copyright, trademark and design, the Delhi High Court held that: “Copyright protection is to the original expression of an idea. Trademarks protect the distinctiveness of a mark, a logo, a symbol, and its association with a product or service. They are “badges of origin” which act as markers for the consumer to identify the source of goods or services. Design rights, on the other hand, protect novelty of the design elements (shape, presentation, etc.) of an article: it is significantly based on the visual appeal of the product or article.”

The Court reiterated that the definition of “design” under Section 2 (a) of Designs Act excludes “artistic works” as defined under the Copyright Act and “labels” used as trademarks. The label used by the Appellant for packing the insecticide chalks is both a trademark (indicating the source of goods) as well as a copyright (containing combination of colors and stylized lettering, set in red color, with the image of a cockroach) and therefore, is clearly excluded from the statutory definition of “design”.

Consequently, deciding the primary bone of contention of the present appeal, the Court held that the artistic work used by the Appellant to market its products is not capable of design registration and therefore does not attract the provisions of Section 15 (2) of Copyrights Act. Hence, the order of the Copyright Board regarding the cancellation Appellant’s copyrights was set aside.

Conclusion:

The Hon’ble Delhi High Court has laid down a much needed explicit interpretation of Section 15 (2) of the Copyright Act, 1957. One can hope that this judgment will come in as a handy relief for all the genuine traders and also as a beneficial judicial precedent to avert the confusion and misuse of the concerned provisions of law.