High Court Upholds Diageo's Claim Of Trade Dress Infringement Basis Overall Impression Of Designs

Introduction

In the case of Diageo Brands B.V. & Anr. v. Great Galleon Ventures Limited[1], the Delhi High Court restrained the Defendant from infringing the registered design of the Plaintiff. However, the Court refused to grant an interim injunction based on grounds of passing off.

The Plaintiff, a manufacturer, seller, and distributor of alcoholic beverages claimed design infringement of their registered design in their liquor bottle design marketed as the “Hipster Bottle”. They further claimed common law rights in the trade dress and get up of these bottles. The Defendant is engaged in selling alcoholic beverages under the brand name “GOA,” and the Plaintiff alleged that their products which were being sold in 180 ml bottles were a “slavish and fraudulent imitation” of their registered design and a dishonest adoption of their trade dress.

On 23rd February 2021, the Delhi High Court had passed an ex parte interim injunction in favor of the Plaintiff restraining the Defendant from selling the impugned bottles. The Defendant opposed this injunction, seeking vacation of the order and also sought variation of the said order.

Background

The Plaintiff claimed that their design was unique and distinctive owing to its tall, lean and sleek look, modeled on the shape and proportions of a smartphone. The Plaintiff also stated that no third party has ever adopted such a novel design and thus this design follows “trends that are out of the ordinary.” The Plaintiff also stated that they had spent considerable expenses to market and promote the Hipster Bottle through advertisements and social media and as a result they have garnered considerable goodwill and reputation in India, as evident from their sales turnover.

On the other hand, the Defendant denied any infringement and stated that the Defendant prominently displays their brand name “GOLD” on their products due to which there could be no likelihood of confusion. Attacking the validity of the Plaintiff’s ownership and of their design registration, the Defendant further stated that the Plaintiff did not “create” the Hipster Bottle design and in fact the same was created by another third party agency named Love Creative. Furthermore, the Defendant also stated that the design of the Plaintiff was not in fact novel as it was a trade variant inspired by the “hip flask” design which is extremely common in the liquor trade. They also stated that the design was functional in nature and not purely aesthetic. Regarding the Plaintiff’s claim that their design is similar to a smartphone, the Defendant stated that they had mentioned on their website that it was a “hip-flask-size pack” design. The Defendant further alleged mosaicing in the Plaintiff’s design stating that they had created a design that was a combination of various other designs that were already commonly being used in the industry.

Decision

The Court addressed questions raised in this case in the following manner:

1. Who is the proprietor of the registered design?

In this regard, the Court stated the Plaintiff had outsourced their design creation which was created upon a payment. The Court also noted section 2(j)(ii) of the Designs Act 2000, where it has been clearly stated that the person for whom a design is so executed, subject to consideration, is the proprietor of the design. Therefore, the Court denied the Defendant’s contention that the Plaintiff was not the proprietor of the registered design.

2. What is the legal effect of registration of a design for deciding the relief of grant of injunction?

The Court stated that there seems to be an apparent juxtaposition on this aspect between designs and trademarks since the registration of trademarks is prima facie evidence of validity, however, there is no such provision in the design statute. The Court stated that this is a deliberate attempt by the legislature to ensure that no such inference is drawn for design registrations. A design is made available to public inspection only post-registration and thus the remedy available to a person aggrieved by the design is to apply for cancellation of the registration after grant. The Court also stated, referring to the Defendant's arguments with regards to the design’s validity that, for such a claim, the Defendant must with “reasonable certainty demonstrate grounds that render the design susceptible to cancellation.”

3. Has a prima facie case been established to show fraudulent and obvious imitation of the Plaintiff’s registered design, so as to warrant an injunction?

The Court addressed this issue by referring to the images and pictorial designs of both the products and stated that the principle that applies in such matters is clear. That is that the yardstick is of visual effect/ocular impression. It was stated that “the test is not to look out for subtle dissimilarities, but rather, to see if there is substantial and overall similarity in the two designs.” Upon applying the principle of design law in this regard, the Court concluded that, “Unequivocally, at first blush, the Defendant's impugned bottles bear a remarkable similarity to the Hipster.” Thus, the Court stated that the Defendant's product was deceptively similar to the Plaintiff’s registered design.

Moreover, the Court also noted that prior to adopting the impugned design, the Defendant was selling its products in a different design bottle, which was distinct and different from the Plaintiff’s design and trade dress.

The Court also clarified that the plaintiff was the prior adopter and user of the design since they adopted the same in the global market in 2018 and in India in 2019. Therefore, the Court concluded that the Plaintiff had established a prima facie case in their favor and the balance of convenience also tilted towards them. The Court stated that the Defendant’s products were only limited to a certain geographical area, that is the state of Madhya Pradesh in India and that they had been restrained only after a few weeks of marketing the products since the interim injunction was granted in February 2021. Finally, the Court concluded that the Plaintiff would suffer irreparable harm if the injunction was not granted and that they had established grounds to warrant an injunction in their favor.

4. Has the Defendant demonstrated any ground of challenge under section 19 of the Design Act?

The Court referred to various sections of the Design Act and divided the Defendant’s contentions in three parts; (i) whether the Plaintiff’s design was not new or original due to prior art; (ii) whether the Plaintiff’s design was liable for cancellation due to mosaicing; and (iii) whether the design was liable for cancellation due to being functional in nature.

The Court then clarified that although the judiciary does not require physical articles for comparison of the prior art and the same need not necessarily be used commercially, the Defendant must provide evidence with a perspective view of clarity. Upon perusal of the evidence provided by the Defendant, the Court concluded that there were visual dissimilarities between them and the Plaintiff’s design.

The Court also observed the concept of “new and original” and stated that this has to be seen as a whole. Deciding this factor in favor of the Plaintiff, The Court stated “The innovation and novelty of the design, as conceptualised in the mind of its author, lies not in the bottle/flask design, but in the "shape and configuration" as applied to a bottle…the Plaintiffs' Registered Design …is not just a trade variant of previous design, as sought to be trivialised by the Defendant. A bottle is undoubtedly a common article that has common features, such as neck, shoulders, etc. It is an article that offers limited artistic freedom to innovate. Yet, it has been significantly transformed in the Hipster, with distinguishable features, giving it an aesthetic appeal that had not been conceived hereinbefore.”

With regards to the issue of mosaicing, the Court noted that the Defendant had alleged that the Plaintiff’s design was based on a mix and match of existing and known designs. However, the Court clarified that they were convinced of the Defendant's arguments and the element of originality in the Plaintiff’s design. Considering the test for mosaicing, the Court stated the following: “(i) The Court should not dissect individual features of a design and try to find them individually in each prior art; instead, a conspectus of features as a whole should be seen. (ii) It is well within the realm of possibilities that existing features of known designs can be combined in a hitherto unseen manner which can result in a new and original design. (iii) Mosaicing of pre-existing designs is not a defense to seek cancellation of registration. (iv) Defendant will have to show one single prior art to claim prior publication.”

Finally, considering the issue of functionality of the design in question, the Court observed that a purely functional design cannot be granted protection, however, it is possible for a product to have both functional and design/ aesthetic aspects. Where a product has both such aspects, “functionality has to be actively not considered while considering a design's novelty”.

In summary, the Court found that none of the grounds put forth by the Defendant warranted cancellation of the Plaintiff’s design registration.

5. Is there similarity in the trade dress/ get up, constituting passing off and if so, can an injunction be granted on that ground?

Drawing a comparison between the Plaintiff’s and the Defendant’s packaging, the Court considered the cumulative combination of the Plaintiff’s design and features. The Court stated that a trade dress has to be seen as a whole to determine what features are distinctive enough to become a source identifier. The Court stated that Plaintiff’s product was marketed in three colors, black, white, and gold while the Defendant's bottles are sold in color variants of red and black. The Court also noted the Defendant’s argument that the black and gold combination is common to many alcohol manufacturers. It was also observed that a rimmed rounded cap is common in the trade and widely used in the industry. The Defendant's products also depicted their brand name “GOLD” on their products.

Thus, the Court was convinced that there was no likelihood of confusion in this regard and a claim for passing off was therefore not made out. The Court stated that, “at this interim stage, such similarities are not sufficient to grant injunction on a passing off action.”

Finally, the Court refused to vacate the ex parte interim injunction granted in this case in February 2021 and reiterated the injunction against the Defendant on grounds of design infringement restraining them from “manufacturing, selling, offering for sale, importing, exporting, advertising, directly or indirectly dealing in the infringing products including 'GOA Gold' Whisky (180 ml), 'GOA Gold' Rum (180 ml) or any other product which has an identical/obvious or fraudulent imitation of the Plaintiffs' Registered Design”.

Conclusion

To conclude, the Court has delivered a comprehensive decision in this case which sheds much clarity on the existing tests on design laws in the country. It has also been clarified that solely because there are similarities that warrant design infringement does not necessarily mean that a claim for passing off shall also lie. Considering the design similarities, the Court also took into account the factors for passing off and found that there was no likelihood of confusion or trade dress infringement in this case given the difference in colors and the brand name/logo as a source identifier of both the products.

For any queries, please write to Ms. Vrinda Sehgal,

Associate, at vrinda@iprattorneys.com.

[1] Diageo Brands B.V. & Anr. v. Great Galleon Ventures Limited CS(COMM) 87/2021https://indiankanoon.org/doc/93719428/