Supreme Court Lays Down Twin Test To Resolve Copyright–Design Conflict Under S15(2) Of Copyright Act

The Supreme Court today (April 15) resolved an ambiguity under the intellectual property (IP) law, by resolving the overlap between 'design' and 'copyright' protection under Section 15(2) of the Copyright Act.

Section 15(2) of the Copyright Act specifically deals with designs capable of being registered under the Designs Act, 2000, and the limit of copyright protection in such cases. The copyright protection to such design ceases if the design remains unregistered and is industrially reproduced more than 50 times.

The Court noted that an 'artistic work' does not automatically lose copyright protection simply because a design based on it has been used in industrial production. It stated that under Section 15(2) of the Copyright Act, copyright protection for such an artistic work would cease if the resulting design is capable of registration under the Designs Act, remains unregistered, and is applied industrially more than 50 times.

Further, the Court clarified that a dismissal of the suit seeking copyright protection of a drawing under Section 15(2) of the Copyright Act would not automatically grant protection to a drawing under the Design Act, and it has to be ascertained whether a work is qualified to be protected by the Designs Act. In this regard, the Court formulated a two-pronged approach to crack open the conundrum caused by Section 15(2) of the Copyright Act so as to ascertain whether a work is qualified to be protected by the Designs Act.

This test shall consider:

(i) whether the work in question is purely an 'artistic work' entitled to protection under the Copyright Act or whether it is a 'design' derived from such original artistic work and subjected to an industrial process based upon the language in Section 15(2) of the Copyright Act;

(ii) if such a work does not qualify for copyright protection, then the test of 'functional utility' will have to be applied so as to determine its dominant purpose, and then ascertain whether it would qualify for design protection under the Design Act.

The test of functional utility is applied to ascertain whether the work is entitled to protection under the Design Act or not. If the primary characteristic of the work is its functional utility rather than aesthetic appeal, it would not qualify to seek protection under the Designs Act. In a nutshell, aesthetic appeal is required in the work to seek protection under the Design Act.

Background

The bench comprising Justices Surya Kant and N Kotiswar Singh was hearing a case arising from a 2018 lawsuit filed by Respondent-Inox India Limited, alleging that the Appellant-Cryogas Equipment and LNG Express India infringed its copyright in engineering drawings and literary works related to cryogenic semi-trailers used for transporting liquefied natural gas (LNG).

Inox claimed the drawings were original "artistic works" under the Copyright Act, while the appellants argued they were unregistered "designs" under the Designs Act, 2000, and thus ineligible for copyright protection under Section 15(2) of the Copyright Act after industrial use.

The Commercial Court initially dismissed Inox's suit under Order VII Rule 11 of the CPC, accepting Cryogas's argument that the drawings, reproduced over 50 times industrially, fell under the Designs Act. The Gujarat High Court later reversed this decision, restoring the suit and directing a trial.

Aggrieved by the High Court's decision, Cryogas appealed to the Supreme Court.

Decision

Upholding the High Court's decision, the judgment authored by Justice Surya Kant disagreed with the commercial court's reasoning, which had dismissed INOX's copyright suit on the sole ground that the drawing had been applied more than 50 times by the Appellant, thereby losing copyright protection and falling exclusively under the purview of the Designs Act.

“that the inquiry cannot be concluded merely by assuming that what does not qualify as an 'artistic work', within the meaning of the Copyright Act, would automatically receive protection under the Designs Act.”, the Court said,

The Court noted that since the drawings pertained to internal parts of Cryogenic trailers with no visual appeal or aesthetics, the commercial court's dismissal of the suit was unwarranted because it prematurely concluded the drawings were "designs" without evidence on the number of industrial reproductions i.e., whether the drawing was applied over 50 times or not, and without determining the aesthetic or functional nature of the drawings.

“We are in complete agreement with the reasoning of the High Court that the question as to whether the original artistic work would fall within the meaning of 'design' under the Designs Act cannot be answered while deciding an application under Order VII Rule 11 of the CPC. This stage would involve only a prima facie inquiry as to the disclosure of cause of action in the plaint. The question pertaining to ascertaining the true nature of the 'Proprietary Engineering Drawings' involves a mixed question of law and fact and could not have been decided by the Commercial Court at a preliminary stage based upon such a casual appraisal of the plaint averments.”, the court observed.

“We therefore concur with the High Court that this case warrants a trial given the triable issues involved. The plaintiff before the Commercial Court, i.e., Inox, was erroneously non-suited due to incorrect assumptions made by the Commercial Court which misread the plaint, misapplied legal principles and overlooked the distinction between 'artistic work' and 'design.”, the court added.

Accordingly, the Court dismissed the appeal and ordered:

“In light of our discussion on relevant precedents and legal positions, and the clear test we have outlined, we direct the Commercial Court to consider the issue afresh and conduct trial by adopting an Occam's Razor approach to ascertain the true nature of the 'Proprietary Engineering Drawings'. Additionally, the Commercial Court would also need to independently assess the claims related to infringement of the Literary Works, confidential information, know-how etc. so as to resolve the matter comprehensively.”

Case Title: Cryogas Equipment Private Limited versus Inox India Limited and Others

Citation : 2025 LiveLaw (SC) 426

Click here to read/download the judgment

Appearance:

For Petitioner(s) Mr. Shyam Divan, Sr. Adv. Mr. Rahul Chitnis, Adv. Mr. Sudipto Sircar, Adv. Mr. Hersh Desai, Adv. Ms. Shwetal Shepal, Adv. Mr. Aditya Khanna, Adv. Mr. Samrat Mehta, Adv. Mr. Chander Shekhar Ashri, AOR

For Respondent(s) Mr. Chander M Lall, Sr. Adv. Mr. J Sai Deepak, Sr. Adv. Mr. Smriti Yadav, Adv. Mr. Nirupam Lodha, Adv. Mr. Dhiren Karania, Adv. Mr. Kshitij Parashar, Adv. Mr. Gautam Wadhwa, Adv. Ms. Annanya Mehan, Adv. Mr. R Abhishek, Adv. For M/S. Khaitan & Co., AOR