Taking forward the discussion on the Delhi High Court’s recent Crocs US v. Bata judgment, Priyam Mitra highlights how the Court might not have confused the concepts of design and trade dress. Priyam is a 3rd year student at the National Law School of India University, Bengaluru. He is interested in contemporary discussions surrounding intellectual property and criminal law.
Holes in Reasoning? How the Judgement in Crocs v Bata Might be Misunderstood
By Priyam Mitra
A division bench of the Delhi High Court recently delivered a judgement involving a dispute between Crocs Inc. USA and Bata India. The Court overturns the judgement of the single judge and clarifies the position on the interface of design and passing off. A previous SpicyIP post critiques the judgement for confusing and conflating the concepts of design and trade dress in cases of passing off. However, I argue that there has been a consistent misunderstanding of the judgement of the 5 judge bench of the Delhi High Court in Carlsberg Breweries A/S v. Som Distilleries Ltd, which has led to further confusions surrounding the recent Crocs v. Bata judgement at hand. To structure this post, I begin with first analysing the judgements in the cases of Crocs and Carlsberg and pointing out a fundamental misunderstanding which has permeated both scholarship and judicial reasoning. I conclude by arguing for a better positioning of the criticisms surrounding this contentious domain.
Setting the Context: The Judgements in Carlsberg and Crocs
The relevant para of Carlsberg is reproduced below (emphasis supplied):
“43. [T]he larger legal formulation in Mohan Lal (supra), that a passing off action i.e one which is not limited or restricted to trademark use alone, but the overall get up or “trade dress” however, is correct; as long as the elements of the design are not used as a trademark, but a larger trade dress get up, presentation of the product through its packaging and so on, given that a “passing off” claim can include but is also broader than infringement of a trademark, the cause of action against such use lies”
What does this formulation mean? On a plain reading, it seems like the Court deliberately places a condition such that a claim for passing off lies only when the design is not being used as a trademark (this has been explained in detail before). The Court here allows the claim of passing off when the “elements of design” are used as part of a larger trade dress. It is important to note that the Court explicitly says that a cause of action lies against such use. This means that the Defendant in the suit must be using the elements of design as a part of trade dress, presentation, packaging, and the like (this is supported by separate reasoning of Mehta J.). This is an important clarification as we will see later.
The division bench in the recent case of Crocs v Bata, does its analysis in two steps: first it clarifies the judgement in Carlsberg to mean that the design elements of the plaintiff must be used by the defendant, just not as a trademark; and then it rebuts the argument accepted by the single judge before, that the “subject matter” of the action needs to be “something more” than the subject of design registration (para 21.8.2 (xviii)). This seems to be in line with the interpretation of Carlsberg as I noted above.
What then is the Persisting Confusion?
Analysing the overruled judgement of the single judge and the previous post, it seems like they interpret the requirement of this larger trade dress to mean that the plaintiff must show that their design is being used as a part of trade dress, and this is being passed off by the defendant. This is apparent from para 41 of the now overruled judgement (emphasis supplied):
“41. The plaintiff, from its pleadings has been unable to point out any other feature/element or part of the larger trade dress, get up of the product of plaintiff, other than the elements of its registered design, by adopting which the defendants are passing off their goods as that of the plaintiff”
This shows that this is a fundamental misunderstanding of Carlsberg– something that the division bench points out later as well. A similar reasoning is observed in the previous post:
“The error in the Crocs judgment is its failure to appreciate this distinction [between design and trade dress]. By allowing a passing-off claim to rest solely on the clog’s shape, the Court shrinks the rich, multifaceted concept of trade dress into the narrow, isolated form of a design.”
This restates the perhaps incorrect reasoning of the single judge. To make the point of misunderstanding and divergence clear, as noted before, the DB of the High Court in Crocs first clarifies the ruling in Carlsberg such that there is no need to prove that the plaintiff is using the design as a part of “something more”, say a larger trade dress. What is needed is that the defendant must use the design elements of the plaintiff as part of its larger trade dress; in fact, Carlsberg clearly understood would lead to this conclusion. However, the mistake of the single judge and the previous post is that they believe that the plaintiff must show that their design is being used as part of trade dress by them. This seems to be the fundamental misunderstanding. Coming back to the facts of the Crocs case, it is an absurd result if the plaintiffs’ claim of passing off is not allowed since their design encompasses their entire product. Placing an onus on them to use the design as part of a larger get up is an unfair burden that was not envisioned by both Mohan Lal and Carlsberg. This leads the court to the conclusion that all that is needed in cases of passing off is that the design (or some elements of it) must be used by the defendant, not as a trademark but as a part of a larger formulation i.e. trade dress.
Conclusion
Prof. Basheer highlighted the foundational difference in the aims of design and trademark law. While design protection is extended for pieces with aesthetic value, the goal of trademark protection is source verification and retention of a curated brand value. In the above post, Prof. Basheer critiqued the decision of Micolube India Limited v Rakesh Kumar Trading as Saurabh for allowing the design to function dually as a trademark too. This is why passing off as a remedy was extended to design right holders. While Carlsberg did disagree with this portion of judgement, it reinforced the “larger formulation” of the case allowing the extension of passing off in design cases. The critique in the previous post is helpful in so far as it resurfaces this discussion of allowing the remedy of passing off to the regime of design protection. I too agree that there exist problems related to evergreening of designs if the aegis of passing off is expanded to include said designs when they have been granted for a limited period. However, till a stronger authority decides otherwise and realises the problems with this broad extension, there seems to be no “holes” in the Crocs judgement and its reasoning which is aligned correctly with the legal formulations of Carlsberg.