Copyright vs. Design: Supreme Court Clarifies Test for Protection under Section 15(2) Copyright Act - 2025-04-16

Supreme Court Sets Two-Pronged Test to Resolve Copyright vs. Design Dilemma in Cryogenic Tank Case

New Delhi, April 15, 2025 - The Supreme Court of India, in a judgment delivered by a bench comprising Justices Surya Kant and Nongmeikapam Kotiswar Singh, has clarified the intricate interplay between copyright and design law, particularly concerning Section 15(2) of the Copyright Act, 1957 and the Designs Act, 2000. The ruling came in appeals filed by Cryogas Equipment Private Limited and LNG Express India Private Limited against Inox India Limited, concerning alleged copyright infringement of engineering drawings for cryogenic storage tanks. The Court upheld the High Court of Gujarat’s decision, which had reinstated Inox’s copyright infringement suit and rejected the application for rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC).

Case Background: Copyright Claim over Cryogenic Tank Designs

Inox India Limited filed a suit alleging copyright infringement by Cryogas and LNG Express, claiming proprietary rights over engineering drawings and literary works related to the design and manufacturing of internal parts for cryogenic storage tanks and distribution systems. Inox sought injunctions and damages, asserting that the defendants were infringing on their Intellectual Property (IP) rights.

Cryogas and LNG Express countered by arguing that Inox's “Proprietary Engineering Drawings” fell under the definition of ‘design’ under the Designs Act, and since these designs were capable of registration under the Designs Act but were not registered, and reproduced industrially more than fifty times, copyright protection was lost under Section 15(2) of the Copyright Act. They sought rejection of Inox’s suit under Order VII Rule 11 CPC. The Commercial Court initially allowed this application, but the High Court reversed this order, a decision now affirmed by the Supreme Court.

Arguments from Both Sides

Appellants ( Cryogas and LNG Express) argued :

Inox’s claims were an afterthought to circumvent Section 15(2) of the Copyright Act, as the drawings were essentially industrial designs for manufacturing semi-trailers.

Cryogenic semi-trailer designs adhere to international standards, making originality claims questionable under copyright.

Section 15(2) of the Copyright Act clearly bars copyright protection for registrable designs under the Designs Act that are industrially reproduced more than fifty times.

Inox strategically avoided disclosing the number of trailers produced, implying it exceeded the fifty-reproduction threshold, thus invoking Section 15(2).

Respondent (Inox India Limited) contended :

They possessed two distinct copyrights: “Proprietary Engineering Drawings” (artistic work) and “Literary Works” (descriptions and processes), requiring independent assessment.

The drawings pertain to internal components, excluded from design registration under Section 2(d) of the Designs Act, as they are “mode or principle of construction” and lack visual appeal.

“Literary Work” is separate from drawings and not subject to Section 15(2).

The issue of confidential information theft is a separate cause of action, not limited by Section 15(2).

Determining whether drawings are registrable as designs is a mixed question of law and fact, not decidable under Order VII Rule 11 CPC.

Supreme Court's Analysis and Two-Pronged Test

The Supreme Court conducted an extensive analysis of the Copyright Act, Designs Act, relevant Indian and international jurisprudence, including cases like Microfibres Inc v. Girdhar , Amp v. Utilux , Star Athletica LLC v. Varsity Brands Inc , and international treaties like TRIPS and Berne Convention.

The Court highlighted the legislative intent to provide higher protection to pure artistic works and lesser, design-specific protection to commercially applicable designs. It emphasized that while an ‘artistic work’ may qualify for copyright, its industrial application as a ‘design’ falls under the limitations of Section 15(2) of the Copyright Act, requiring registration under the Designs Act for protection beyond a certain threshold of industrial application.

To resolve the copyright vs. design conundrum, the Supreme Court formulated a two-pronged test :

Artistic Work vs. Design Derivation : Determine if the work is purely an ‘artistic work’ entitled to copyright, or a ‘design’ derived from an artistic work for industrial application, as per Section 15(2) of the Copyright Act.

Functional Utility Test : If not copyrightable as pure artistic work, apply the ‘functional utility’ test to ascertain if its dominant purpose is functional or if it possesses aesthetic appeal qualifying it for design protection under the Designs Act.

The Court underscored, “ …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. ” It further noted, " Our analysis further reveals 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. "

High Court Order Upheld, Trial Ordered

The Supreme Court upheld the High Court's decision, stating that the Commercial Court erred in rejecting the plaint under Order VII Rule 11 CPC at a preliminary stage. The Apex Court agreed that determining whether the “Proprietary Engineering Drawings” qualify as a ‘design’ is a mixed question of law and fact requiring a full trial. The Court directed the Commercial Court to reconsider the interim injunction application within two months and to conduct a trial within one year, applying the two-pronged test to ascertain the nature of the drawings and address all IP infringement claims.

Implications of the Judgment

This judgment provides crucial clarity on the demarcation between copyright and design protection for industrially applicable artistic works in India. The two-pronged test established by the Supreme Court offers a structured approach for courts to resolve disputes involving Section 15(2) of the Copyright Act. It reinforces that preliminary dismissal of suits based solely on plaint averments, without a detailed examination of facts and legal nuances regarding 'artistic work' vs 'design,' is inappropriate, especially when mixed questions of law and fact are involved. The ruling emphasizes the need for a case-specific inquiry, balancing the protection of artistic creativity with the promotion of industrial design and commercial exploitation, within the framework of Indian IP law.