INDUSTRIAL DESIGNS: Penalties

a. Definition: Design as per Section 2(d) of the Designs Act, 2000 means only the features of
shape, configuration, pattern or ornament or composition of lines or colour or combination
thereof applied to any article whether two dimensional or three dimensional or in both forms,
by any industrial process or means, whether manual, mechanical or chemical, separate or
combined, which in the finished article appeal to and are judged solely by the eye, but does
not include any mode or principle or construction or anything which is in substance a mere
mechanical device, and does not include any trade mark, as define in clause (v) of sub-section
of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works
as defined under Section 2(c) of the Copyright Act, 1957.

b. Introduction: If anyone contravenes the copyright in a design, he is liable for every offence
to pay a sum not exceeding Rs. 25,000/- to the registered proprietor subject to a maximum of
Rs. 50,000/- recoverable as contract debt in respect of any one design. The registered
proprietor may bring a suit for the recovery of the damages for any such contravention and
for injunction against repetition of the same. Total sum recoverable shall not exceed Rs.
50,000/-as contract debt as stated in Section 22(2)(a). The suit for infringement, recovery of
damage etc should not be filed in any court below the court of District Judge.

If the registered proprietor fails to mark an article, as required in (1), he shall not be entitled
to recover any penalty or damages in respect of any infringement of his copyright in the
design, unless he proves that he took all proper steps to ensure the marking of the article, or
unless he proves that the infringement took place after the alleged infringer knew or had
already received a notice of the existence of copyright in the Section 15, Rule 26 62 design.
d. In respect to any class or description of articles, a trade or industry may represent to the
Central Government that it is expedient to dispense with or modify the marking requirement
as required above. The Central Government, may, if it thinks fit, dispense or modify such
requirements through a rule made under the Act.1

c. About/History: A registered proprietor can institute a suit for injunction as well as recovery
of damages against any person engaged in piracy of the registered design. Such legal
proceedings can be instituted from the date of registration and till the expiry of copyright.
However, in case of reciprocity application, the registered proprietor can claim damages only
from the actual date on which the design is registered in India. If any person commits piracy
of a registered design, as defined in Section 22, he shall be liable to pay for a payment of a
sum not exceeding `25,000/- recoverable as contract debt. However, the total sum
recoverable in respect of any one design shall not exceed ` 50,000/-. The suit for
injunction/damages shall not be instituted in any Court below the Court of District Judge2.

In a case between Ampro Food Products v. Ashok Biscuit Works 3, the appellant
manufactured biscuits with AP embossed on them. The respondent also manufactured
1
Manual Of Designs Practice &Procedure PUBLISHED BY: OFFICE OF THE CONTROLLER GENERAL OF PATENTS,
DESIGNS &TRADE MARKS.
2
Section 2(c),11,22.
3
AIR 1973 AP 17.
biscuits with identical design except that letters AB were embossed on them, in place of AP.
The suit claimed injunction bringing a charge of piracy of design. Issuing a temporary
injunction, the Court held that in such cases the defence cannot argue that the appellant’s
registered design was not new or original if no steps had been taken earlier seeking
cancellation of the registration of the design.

In M/s. Maxheal Pharmaceuticals v. Shalina Laboratories Pvt. Ltd. (supra) held that once the
registration is granted in favour of the proprietor, he is entitled to an order of injunction
restraining the others from using the same even if the same is wrongly granted. It further held
that it is not the practice of this Court to go into the question of validity of the registration at
the stage of grant of injunction. However, the Division Bench of this Court in M/s. J.K. Sons
v. M/s. Parksons Games and Sports (supra), relying on the judgment of the Full bench of this
Court in the case of Abdul Cadur Allibhoy v. Moahomedally Hyderally (supra), has held that
the principle that a person who himself has imitated somebody else's mark and guilty of false
and misleading representation is not entitled to an injunction, is applicable to the cases of
infringement of trademark and passing off. In view of the law laid down by the Apex Court,
as discussed hereinabove, there should be no difficulty in so far as action for passing off is
concerned. It appears to be a settled position of law that an action for passing off would lie at
the instance of prior user even against the registered user.

In a case between Hindustan Lever Ltd. V. Nirma Pvt. Ltd. 4, the plaintiff alleged
infringement of its registered trade mark, passing off, and infringement of the copyrights in
original artistic work and sought permanent injunction to restrain the defendant from using
the impinged carton in relation to soaps or detergent powder. The defence took the plea that
the said label was in fact a design that could be registered under the Designs Act, and the fact
that it was not so registered makes copyrights if any, under the copyright Act non-existent
when the article to which the design has been applied was reproduced fifty times by industrial
process. The Court ruled that a label to be put on a carton for the goods is not a design.

d Considerations: One school of thought is that Section 22(2) and the first proviso thereunder limit
the amount of damages that design owners may seek to Rs50,000. However, a clear reading of the
sub-clauses of Section 22(2) reveals that it provides two reliefs to registered design owners in the
event of infringement:

 Design owners may recover a maximum of Rs25,000 from an infringer for "every
contravention" in the form of a contract debt.

 Design owners can institute a suit for damages and permanent injunction against an
infringer.

These two options are disjunctive in nature, which means that design owners must choose
between the two. Critically, the Rs50,000 cap for "every design" prescribed in the first
proviso applies only to the first relief. Simply put, no pecuniary limit exists on damages that
registered design owners may seek, should they institute a suit for damages and injunction
under the second relief.
4
AIR 1992 Bom 195.
If this is the case, how does one interpret the first relief and first proviso together? Based on a
combined reading of Section 22(2)(a) and the first proviso, it follows that when design
owners opt for the first relief by way of a contract debt, although they are entitled to recover a
maximum of Rs25,000 from the infringer "for every contravention", owners may recover a
maximum of Rs50,000 for infringement of a design, regardless of the number of
contraventions with respect to the design. In other words, under the first relief, the statutorily
prescribed limit is Rs50,000 for infringement of a single design, regardless of the number of
contraventions. Therefore, if in the same infringing act the infringer violates multiple design
registrations of the same owner, the owner is entitled to recover a maximum of Rs50,000 for
each of the designs.

However, this raises more questions. Since the first relief provides no injunctive relief, after
recovering a maximum of Rs50,000 for infringement of every design, do design owners have
the right to recover more money in the event of a subsequent infringement? If not, what is the
incentive for design owners to choose the first relief, if it does not act as a deterrent to the
infringer? Further, with respect to a first cause of action, if design owners opt for the first
relief, are they barred from instituting a suit for damages for a subsequent infringement by the
same infringer? Unfortunately, the provision does not seem capable of providing answers. It
is hoped that, given the opportunity, an Indian court will address these questions in future5.

f. References/Citations:

5
https://www.internationallawoffice.com/Newsletters/Intellectual-Property/India/Saikrishna-
Associates/Does-the-Designs-Act-2000-limit-the-value-of-damages-in-an-infringement-suit.