Of Beer Bottles and…the Sustainability of Combined Lawsuits for Design Infringement and Passing off in India

Another day, another beer bottle case in the Delhi High Court.

Here is Justice Sanghi’s order issued yesterday on an interim injunction application in Carslberg v. Som Distelleries, after a two-and-a-half month deliberation on Carlsberg’s claim for design infringement and passing off based on the shape of its Tuborg beer bottle.

The judge returns two findings of note in this 179-paragraph, 119-page order.

First, he says that there is no design infringement or passing off by the Defendants’ beer bottles sold under the brand name Hunter. The finding on law is fine, though, really, the whole order could comfortably have been compressed either side of the five-paragraph shape comparison (paragraphs 173–177) which is exhaustive, accurate and invites little disagreement.

Second, however, he has referred to the Chief Justice the question of whether a composite action for design and passing off is sustainable under Indian law. He takes a convoluted path to find that a reference is necessary and, once again, it need not have been so complicated.

Mohan Lal & Dabur

The issue came about from the Defendants’ stance that a design infringement action and one at passing off under Indian law are necessarily separate. Following this argument, you can file for each independently but you cannot combine them into one suit. This, they claimed, was supported by a 2013 three-judge Delhi decision in Mohan Lal v. Sona Paint.

Insofar as it is relevant, Mohan Lal says:

“[The] cause of action in [a design] infringement suit could be different from that which obtained in a passing off action. The fundamental edifice of a suit for [design] infringement would be the claim of monopoly based on its registration, which is premised on uniqueness, newness (sic) and originality of the design [whereas an] action for passing off is founded on the use of the mark in the trade for sale of goods and/or for offering service; the generation of reputation and goodwill as a consequences of the same; the association of the mark to the goods sold or services offered by the Plaintiff and the misrepresentation sought to be created by the Defendant by use of the Plaintiff’s mark or a mark which is deceptively similar, so as to portray that the goods sold or the services offered by him originate or have their source in the plaintiff. It is trite to say that different causes of action cannot be combined in one suit. [See Dabur India Limited v. KR Industries (2008) 10 SCC 595.]” (Edits and emphasis mine.)

This passage runs into trouble almost immediately. Not only is there no such rule but the reference to the 2008 Supreme Court decision in Dabur does not add up either because Dabur says no such thing. This is not lost on either the Plaintiffs or Mr Justice Sanghi here, and both suggest that Mohan Lal’s reliance on Dabur is probably misplaced.

To clarify, Dabur was a copyright-passing off composite action. The Dabur Supreme Court focused its discussion to address the fact that, in cases where composite claims of copyright infringement and passing off are brought in a single suit on the same facts, there is bound to be an overlap of causes of action. The closest thing it contains to a disavowal of the sustainability of a composite action is:

“What, then, would be meant by a composite suit? A composite suit would not entitle a court to entertain a suit in respect whereof it has no jurisdiction, territorial or otherwise. Order II Rule 3 of the [Code of Civil Procedure, ‘CPC’] specifically states so and, thus, there is no reason [why] the same should be ignored. A composite suit within the provisions of the [Copyright] Act as considered in Dhodha House, therefore, would mean the suit which is founded on infringement of a copyright and wherein the incidental power of the Court is required to be invoked. A Plaintiff may seek a remedy which can otherwise be granted by the Court. It was that aspect of the matter which had not been considered in Dhodha House but it never meant that two suits having different causes of actions can be clubbed together as a composite suit.” (Edits and emphasis mine.)

There is little doubt, therefore, that Dabur speaks to jurisdiction, and was addressing the possibility of sustaining composite actions where one of two causes of action has arisen within the territorial jurisdiction of the Court in question while the other has not.

I will admit freely that the “it was never meant that two suits having different causes of action can be clubbed together as a composite suit” bit is a killer. However, further up the same paragraph lies a reference to Order 2, Rule 3 of the CPC which specifically leaves a Plaintiff the option of combining multiple causes of action against the same Defendant(s) into a single suit. (In fact, there is Supreme Court case law in precisely this space going at least as far back as 1996's Bengal Waterproof v. Bombay Waterproof which demands that a Plaintiff combine all such causes of action into a single suit or else she forfeits to res judicata any claim over an unagitated cause of action in the future. If you will pardon the strained analogy, it is somewhat like a trademark equivalent of a ‘forever hold your peace’ clause.)

To read these two parts of the same paragraph in Dabur together means one has to be incorrect, unless you treat the inquiry in Dabur to be one limited to sustainability on jurisdiction alone. The latter is preferable, of course, but, either way, it is clear that there is nothing else to be extracted from Dabur.

Paragon Rubber

The argument against maintainability grows weaker still in the face of the 2013 Supreme Court decision in Paragon Rubber v. Pragathi Rubber Mills.

Here, the Supreme Court was asked about a potential conflict between Dhodha House (which had supported the sustainability of composite actions, though it was not at issue in the case) and Dabur (which had said whatever Dabur had said on the same issue).

The Paragon Supreme Court said:

“We see no conflict [between] the two cases. In both cases, it has been held that, for the purpose of invoking the jurisdiction of the Court in a composite suit, both the causes of action must arise within the jurisdiction of the Court which otherwise had the necessary jurisdiction to decide all the issues. However, the jurisdiction cannot be conferred by joining two causes of action in the same suit when the Court has jurisdiction to try the suit only in respect of one cause of action and not the other.” (Edits and highlights mine.)

I cannot see the objection to composite suits surviving Paragon. The only takeaway from this furrow of observations in Dhodha House, Dabur and Paragon Rubber is that Order 2, Rule 3 cannot be used as a hack to confer jurisdiction on a Court that does not otherwise have territorial jurisdiction over one or more of those causes of action.

Copyright-Passing Off Composites Versus Design-Passing Off Composites

This is an observation that makes a lot of sense where the combination sought is between a trademark or copyright infringement with a passing off action. This is because a trademark or copyright infringement action under Indian law can be instituted at a jurisdiction convenient to the Plaintiff while a pure passing off action still needs to chase the Defendant to make territorial jurisdiction.

To put it another way, you could have territorial jurisdiction for a trademark or copyright infringement action at Place X but have passing off jurisdiction at Y and not X on the same facts. All that the Supreme Court cases say is that you cannot use the freedom to institute composite actions to make jurisdiction for a passing off action at X, since it would get thrown out on jurisdiction if you filed it as a pure passing off suit at X.

However, this complication is irrelevant to a design-passing off composite action because there is no Plaintiff-option jurisdiction clause in the Designs Act akin to Section 62(2) of the Copyright Act. This means that you still need to chase a Defendant to sue for design infringement. This means that the jurisdiction options are no different in a design infringement case than they are in a passing off case.

This, in turn, means that if a design infringement cause of action and a passing off cause of action arise against the same Defendant (the only requirement under Order 2, Rule 3), and the Plaintiff makes territorial jurisdiction at the place of filing suit, a composite design-passing off action is per force sustainable at the place of filing.

This is not a difficult chain to follow. It does mean, however, that the Dhodha House-Dabur-Paragon-Mohan Lal detour is entirely unnecessary in a design-passing off composite action. It also means that Mohan Lal is almost certainly wrong on the point.

Indeed, it is telling that, when confronted with the Paragon and Order 2, Rule 3 clarifications, the Defendants’ stance shifted from arguing against sustainability per se to urging Mr Justice Sanghi to refer Mohan Lal for reconsideration. Mr Justice Sanghi, for his part, understandably hesitant about butting heads with larger benches especially after the RSPL fiasco, has, indeed, requested the Chief Justice to clarify Mohan Lal. Should the Chief Justice order a hearing, it would, remarkably, have to be before a five-judge bench: surely an unnecessary demand on judicial time on an issue so straightforward.

The clarification, should it arrive, ought to be a very simple one:

Supreme Court decisions in Dhodha House, Dabur and Paragon Rubber have made it clear that causes of action that would otherwise not be able to make territorial jurisdiction at a given place cannot use the freedom of combining causes of action offered to Plaintiffs by Order 2, Rule 3 of the CPC to make good such a deficiency.

This difficulty does not arise in case of design-passing off composite actions since, on the same cause of action against the same Defendants (as is the case here), territorial jurisdiction made by a Plaintiff on one cause of action would suffice for the other. Composite suits of this nature are therefore sustainable. Mohan Lal, to the extent that it finds to the contrary, is incorrect for this reason.