9 Jan 2023 2:36 PM GMT
In a case relating the alleged copying of the tread pattern of tyres, the Delhi High Court has ruled that registration of a tread pattern, which is nearly identical to the suit pattern, as a design would not ipso facto operate to disentitle it from being regarded as a “trade mark” within the meaning of the Trade Marks Act, 1999. "At the highest, the matter would be one of trial, in...
In a case relating the alleged copying of the tread pattern of tyres, the Delhi High Court has ruled that registration of a tread pattern, which is nearly identical to the suit pattern, as a design would not ipso facto operate to disentitle it from being regarded as a “trade mark” within the meaning of the Trade Marks Act, 1999.
"At the highest, the matter would be one of trial, in which it would have to be examined whether the tread pattern which was registered as a design was identical or nearly identical to the suit pattern," Justice C. Hari Shankar said in an order.
The court was dealing with the argument that whether Apollo Tyres Limited, which has filed a suit against Pioneer Trading Corporation accusing it of violating a 2018 settlement agreement, deserves to be non-suited on the ground that it had applied for registration of the suit pattern as a design under Section 5 of the Designs Act.
It was argued before the court that Apollo Tyres by making such application has lost its right to ascertain any statutory or common law right in respect of the tread pattern treating it as a trademark in view of the statutory exception of Trademarks from the definition of “design”, contained in Section 2(d) of the Designs Act.
Justice Shankar said the issue of whether a mark is eligible to be regarded as a “trade mark” has to be decided solely on the basis of the definition of “trade mark” and other associated definitions contained in the Trade Marks Act.
"It cannot be decided on the basis of Section 2(d) of the Designs Act. If a mark is eligible to be regarded as a “trade mark” under the Trade Marks Act, that would, by virtue of Section 2(d) of the Designs Act, make it ineligible to be regarded as a “design” under the Designs Act. That is the direction in which these two statutes operate, and not vice versa," said the court.
The court accepted that it might be expressing an opinion somewhat different from the view expressed in Dart Industries as followed in Havells India Ltd. v. Panasonic Life Solutions India Pvt. Ltd. However, the court said the need for any further debate on the issue is, however, obviated by the fact that, in the present case, the subject pattern has not been registered as a design.
"The ineligibility for being regarded as a “trade mark”, even as per the decisions in Dart Industries and Havells India Ltd would operate only in respect of registered designs. The suit pattern is not a registered design. Though the plaintiff had applied for registration of the design, the plaintiff had subsequently applied for cancellation of the earlier application," it added.
On merits, the court said the defendants, at least at the prima facie stage, cannot contend that the suit tread pattern was common to the trade or that it was a tread pattern which was used by several radial truck tyre manufacturers, in view of the terms of settlement.
"The implied acknowledgement of the fact that the impugned tread pattern in CS (Comm) 739/2017, read with the recording, in the settlement agreement, of the plaintiff's contention that its tread pattern was unique and distinct, indicates, at the very least, that the defendants acknowledged the impugned tread pattern in CS (Comm) 739/2017 as being deceptively similar to that of the plaintiff, so as to made out a case of passing off," said the court.
On comparing the two tread patterns, the court said the only difference that one can see in the two patterns is in the nature of the cuts/incisions on the cubes on the two tread patterns. "Otherwise, the placement of the various cubes/ pieces in the two tread patterns is identical," said the bench.
Observing that the aspect of passing off, it is well-settled, has to be decided from the point of view of an average consumer who purchases the tyres, the court rejected the argument that CEAT has, by agreeing to manufacture and sell the tyres, recognised the distinctive nature of their tread pattern.
"The ordinary purchaser of truck tyre does not have access either to the expertise of the CEAT personnel or to the [Indian Rubber Manufacturers Research Association] IRMRA certificate. The tread pattern which was impugned in CS (Comm) 739/2017 is, to an average purchaser, nearly identical to the tread pattern impugned in the present case," said Justice Shankar.
Noting that the court in the order dated August 17, 2017 has already held that the tread pattern is a source indicator and that a purchaser of a truck tyre would purchase the tyre on the basis of the tread pattern, the court said impugned tread pattern in the present case may justifiably be regarded as deceptively similar to the tread pattern of the plaintiff‟s tyres.
"Vis-à-vis the settlement agreement dated 27th February 2018, therefore, this Court is prima facie of the view that the defendants have, in fact, carried out only cosmetic changes to the tread pattern forming subject matter of CS (Comm) 739/2017. These changes cannot be treated as sufficient compliance with the undertaking in the said settlement agreement, whereby the defendants had agreed not to manufacture any tread pattern which was similar to the plaintiff's tread pattern and which could, therefore, result in passing off," said the court.
The court also said that there is no dispute about the fact that the plaintiff has never applied for registration of the tread pattern that the plaintiff seeks to assert in the present case as a design. It added even if the defendants were to have applied for registration of other tread patterns as designs, that cannot, at least at a prima facie stage, disentitle the plaintiff to interlocutory relief in respect of the suit tread pattern.
"I am unable to subscribe to this line of reasoning. An undertaking before the court continues to bind the parties to the undertaking unless it is modified. If the defendants were of the view that, owing to subsequent change in circumstances, the undertaking contained in the settlement agreement dated 28th February 2018 should not continue to bind them, they would have to approach this Court for appropriate orders in that regard. They have not done so. The undertaking, therefore, continues to remain in force. This Court cannot, therefore, proceed to a presumption that, though the suit tread pattern of the plaintiff was unique in 2018 when the settlement agreement dated 28th February 2018 was executed, it no longer remains unique. At the very least, that is a matter which would have to be tested in trial," said the bench.
The Court added that at a prima facie stage, when dealing with an application under Order XXXIX Rules 1 and 2, it would proceed on the presumption that the undertaking given in the Settlement Agreement still continues to bind Pioneer.
In the application seeking interim injunction, Apollo earlier contended that the tread pattern of its ENDURACE LD tyre had been copied by Pioneer Trading. Apollo argued that Pioneer, by using such confusingly similar tread pattern, was effectively passing off their tyres as those of Apollo’s.
Apollo added that it had developed the said tyre, with its unique tread pattern, after considerable research, over a period of four years. It averred that its tyres are sold in various countries including India, Dubai and Hong Kong, and are purchased by various noted truck manufacturers.
Apollo in 2015 had filed a suit against Pioneer Trading. Thereafter, the parties entered into a Settlement Agreement, where Pioneer Trading undertook not to use the said tread pattern and any other tread pattern identical or similar to it.
Alleging that Pioneer had breached the undertaking given in the Settlement Agreement, Apollo filed a suit seeking permanent injunction.
Allowing the application, the High Court granted interim injunction in favour of Apollo. Thereafter, Pioneer filed an application seeking vacation of the interlocutory injunction. Rejecting the application, the court said:
“In view of the aforesaid discussions, I am of the opinion that the plaintiff has made out a clear prima facie case for confirmation of the ex-parte ad interim injunction passed by this court in the plaintiff‟s favour on 30th August 2022".
Case Title: Apollo Tyres Limited versus Pioneer Trading Corporation & Ors
Citation: 2023 LiveLaw (Del) 19
Counsel for the Petitioner: Mr. Peeyoosh Kalra, Mr. C.A. Brijesh and Mr. Krisna Gambhir, Advs.
Counsel for the Respondent: Ms. Anuradha Salhotra, Mr. Naval Kastia and Ms. Saloni Chowdhry, Advocates for D-1 and 2 Mr. Pramod Kumar Singh, Adv. with Ms. Aastha Shukla, Advs
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