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2015 Supreme(Del) 4415

DELHI HIGH COURT
S. Ravindra Bhat, Vipin Sanghi, JJ.
Midas Hygiene Industries Pvt. Ltd. - Appellant
Versus
Sudhir Bhatia - Resopndent
RFA 239/2011, RFA 240/2011, RFA 241/2011
Decided On : 04-11-2015

For the Appellant :Ms. Prathiba. M. Singh, Sr. Advocate with Sh. Sushant Singh, Sh. P.C. Arya and Ms. Suhasni, Advocates.
For the Respondent:Sh. Shailen Bhatia, Sh. Mohan Vidhani and Ms. Priti, Advocates.

Headnote:

Copyright Act - Challenge to Copyright Board's order - Section 15(2) - Summary of Acts and Sections: Copyright Act, 1957, Section 15(2); Designs Act, 2000, Section 2, 4; Trade and Merchandise Marks Act, 1958, Section 2 - The court discussed the overlap between copyright, trademark, and design rights, emphasizing the distinction between original artistic works and designs derived from them. It highlighted the legislative intent to grant higher protection to pure original artistic works and lesser protection to commercial design activity. The court set aside the Board's finding that the appellant's copyright registrations should be cancelled under Section 15(2) of the Copyright Act, remitting the matter to the Board for fresh hearing and findings on other grounds raised in the application.

Fact of the Case:

The case involved a dispute over copyright registrations for labels used on insecticide products. The respondent sought cancellation of the copyright registrations, claiming that the labels were capable of design registration and therefore covered by Section 15(2) of the Copyright Act. The appellant challenged the Copyright Board's order, arguing that the labels were excluded from the definition of designs and were also trademarks, not qualifying for design registration.

Finding of the Court:

The court set aside the Board's finding that the appellant's copyright registrations should be cancelled under Section 15(2) of the Copyright Act, remitting the matter to the Board for fresh hearing and findings on other grounds raised in the application.

Issues: The primary issue was the applicability of Section 15(2) of the Copyright Act to the copyright registrations for the labels used on insecticide products. Other issues included the originality of the labels as artistic works, the respondent's locus standi, and the question of limitation and laches in the application for cancellation of the copyright registrations.

Ratio Decidendi: The court emphasized the distinction between original artistic works and designs derived from them, highlighting the legislative intent to grant higher protection to pure original artistic works and lesser protection to commercial design activity. It set aside the Board's finding and remitted the matter for fresh hearing and findings on other grounds raised in the application.

Final Decision: The court allowed the appeal to the extent of setting aside the Board's finding under Section 15(2) of the Copyright Act and remitted the matter to the Board for fresh hearing and findings on other grounds raised in the application.

JUDGMENT :

S. Ravindra Bhat, J.:-

1. These appeals, under Section 72 of the Copyright Act, 1957, challenge the order of the Learned Copyright Board (hereinafter ?the Board) dated 04.04.2011, which expunged registration numbers A-51334/91, A-55885/99, and A-55885/99 upon the petition filed on 23.01.07 by the respondent/Applicant, Sudhir Bhatia (hereinafter, ?the respondent). The ground in support of the appeal is that inter alia, the Board mis-applied Section 15(2) of the Copyright Act, 1957 in the facts and circumstances of the case.

2. The appellants (hereafter called "Midas") claim to be pioneers in insecticides and pesticide production in the form of chalks in India. After conceiving the idea and testing it, Midas launched commercial activity under the trademarks "Krazy Lines" and "Laxman Rekha" (hereafter "the trademarks") approximately in 1989. The trademarks were registered, bearing Nos. 545608 and 54610 respectively in 1991, and the packaging material of the products was registered under No. A-51334/91 of the Copyright Act.

3. The respondent was employed by the appellants from 1985 as he was a close relative of a director, Mr. S.S. Kapoor. In 1992, he started production of identical chalks under the trademarks "Krazy Lines" and "Laxman Rekha", pursuant to which a legal notice was served upon him on 28.02.1992, which was replied to by him. When such production activity continued in 1994, criminal proceedings were initiated against the respondent. Later that year, upon the insistence of family members, an agreement was signed between the opposing parties, which, inter alia, stipulated the abandonment of the trademarks "Krazy Lines" and "Laxman Rekha" by both the appellant and the respondent, after 30.06.1994.

4. The agreement, however, was breached, in the first instance, by the respondent, after which the appellant also found it expedient in their business’ interests to flout its terms and continue production of the insecticide and pesticide chalks. Thereafter, Midas filed Suit No. 1821/1999 against the respondent before this Court. The matter, after being heard by a Single Judge and later, a Division Bench the Court, was eventually decided by the Supreme Court of India on 22.01.2004, restraining the respondent from using the said trademarks, during pendency of the suit on the file of this Court. The Supreme Court held that the cartons used by the respondent was “almost identical” to that of the appellant. The Court held that the respondent was unable to explain why such a mark was used and that this indicated a prima facie dishonest intention.

5. After these developments, the respondent filed a Rectification Petition Nos. F 1-6/ 2007-CRB (WZ); F1-23/2007-CRB (WZ) and F1-24/2007-CRB (WZ) seeking cancellation of the copyright numbered A-55884/99 (copyright for ?KRAZY LINES); A-55885/99 (copyright for?LAXMAN REKHA) and A-55334/91 (copyright for ?LAXMAN REKHA and ?KRAZY LINES) before the Board claiming to be the rightful proprietor of the said trademarks, and challenging the said registration on several grounds such as non-compliance with Rule 16 of the Copyright Rules, 1958, lack of originality in the artistic works of Midas, the lack of proper assignment between Midas and its predecessor-in-title. The Board ordered cancellation of the copyrights in the order dated 04.04.2011, which is the subject matter of these appeals.

6. The Copyright Board, which made the impugned orders, directing cancellation of copyright registration, restricted the scope of the appeal to a consideration of the true interpretation of Section 15(2) of the Copyright Act, 2000, which enacts that where copyright in a design is capable of registration under the Designs Act, and is not so registered, as soon as the article - to which such copyright is applied, is produced more than fifty times through an industrial process, the copyright shall cease to exist. The Copyright Board held that the appellant’s registration vis-à-vis the artistic work, in respect of






















































































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