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Madhya Pradesh High Court · body

2021 DIGILAW 627 (MP)

Mold Tek Packaging Limited v. S. D. Containers

2021-09-01

SUBODH ABHYANKAR

body2021
ORDER 1. Heard on I.A. No.01/2020, which is an application for grant of temporary injunction under Order 39 rule 1 & 2 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‘CPC’) as also heard on an application filed under Order 7 rule 11 of CPC which has not given any interlocutory application by the Registry of this Court by the plaintiff against the counter claim of the defendant. 2. So far as I.A No.01/2020 is concerned, the facts of the case are that, this civil suit has been filed by plaintiff for declaration and permanent injunction under Order VII rule 1 of C.P.C. read with section 22 of the Designs Act, 2000 and sections 55 & 62 of Copyrights Act 1957 and for passing of trademarks against the defendant. 3. The case of the plaintiff is that, the plaintiff M/s Mold-Tek Packaging Limited (hereinafter referred as ‘Mold -Tek’ ) is a public limited Company, it was established in the year 1985, and since then it is involved in the business of manufacturing and selling rigid plastic packaging material including manufacturing of injection moulded containers for lubes, paints, food amongst other products. 4. The plaintiff company have 07 processing plants across India and have introduced the concept of spouts and in-mould spout concepts for packs which are used as container for various products. The plaintiff company have also engaged in research and development activities. In the course of its business, the plaintiff company have also got registered around eight design applications for the lids of the containers, containers, lids with the spout, jar or container with the Controller General of Patents, Designs and Trademarks. 5. According to the plaintiff Company, it has come to know in the months of September-October, 2019 that the defendant had adopted the exactly similar design as that of the plaintiff’s, both, the lid and container and has been manufacturing both of them and supplying them to edible oil manufactures some of whom are even existing customers of the plaintiff. 6. Thus, the grievance of the plaintiff is that the defendant have fraudulently and dishonestly adopted the exact design of the plaintiff of the said product, which has caused substantial loss to the plaintiff, and the defendant’s actions are eating away into the profits of the plaintiff, which have been generated by them after huge investments in its units, research and development activities. The plaintiff company have sought the following reliefs in the suit:- 29- A. Allow this suit with costs. B. Grant a decree of declaration thereby declaring that defendant has no right to manufacture containers which are similar to that manufactured by plaintiff company. C. For permanent injunction restraining the defendant by itself, its Partners, its Servants and Agents, its distributors, its Stockiest, its Representatives, its Employees, its officers or every/all persons claiming through or under it from either directly or indirectly not to copy, use or enable others to use this plaintiff’s Design of the Container under Design Application No.299039 and Lid under Design Application No.299041 so as not pirate or infringe this plaintiff’s registered design. D. To award a sum of Rs.5 crores towards notional damages against the defendant’s and in favour of the plaintiffs and pass as Decree of damage as valued and claimed for the purpose of the suit and for the purpose of loss of income, loss of clientele, loss of reputation and loss of goodwill of the plaintiff caused by the piracy and illegal activities of the defendant. E. An order directing the defendants to deliver to this plaintiff all extrusion blow moulding machinery, injection blow moulding machinery including one step and two step, stretch blow moulding, injecting moulding, multilayer bottle moulding machinery, all stocks of the infringing container all relates blocks and dyes, designs and drawing leading to manufacture of the infringing container, all art work and specification list. F. An order directing the defendant’s to render the account of profit, illegally earned by the defendant by using the infringing container wherein the defendant is selling its products and all such revenues generated. G. To order the costs of the suit. H. Such further or other orders as this Hon’ble Court deem fit and proper in the circumstances of the case. 7. Shri Vijay Assudani, counsel for the plaintiff has drawn attention of this Court towards the various aspects of the design of the container and the lid of the plaintiff as well as of the defendant to demonstrate that the defendant has replicated exactly the similar design of the container and the lid as that of the plaintiff. 7. Shri Vijay Assudani, counsel for the plaintiff has drawn attention of this Court towards the various aspects of the design of the container and the lid of the plaintiff as well as of the defendant to demonstrate that the defendant has replicated exactly the similar design of the container and the lid as that of the plaintiff. Thus, it is submitted that the defendant be restrained from manufacturing the similar design under Design Application No.299039 and Lid under Design Application No.299041 containers and lids as that of the plaintiff by itself, its partners, its servants and agents etc. 8. Shri Neeraj Grover, counsel for the defendant, on the other hand, has opposed the prayer and it is submitted that no case for temporary injunction is made out as the suit itself is misconceived. It is submitted that the defendant is also manufacturing entity which manufactures pet bottles, pet jars, pharma bottles, plastic jar, PET bottle, plastic cap, cosmetic bottles etc. however, the defendants are not engaged in the manufacturing of the containers and lids in question. In fact the defendant has been purchasing the pails and the lids from a party called Viva Packaging Private Limited (earlier known as “Alpha Packaging Private Limited, Daman). It is also submitted that the defendant has already raised an objection regarding the validity of both the impugned designs and as such the plaintiff has no locus to allege infringement of its designs by the defendant in as much as both the designs are invalid and not capable of being registered. It is further submitted that the defendant has also filed a counter claim for cancellation of the impugned designs. Counsel has further submitted that the purpose of the Design Act is to protect novel designs which have been devised to be applied to articles manufactured or to be manufactured and marketed commercially and it is a well settled law that the test of novelty is the eyes alone by placing the two designs side by side and see whether the one for which novelty is claimed is new or not. And, hence so far as the impugned designs of the plaintiff are concerned, they are neither new nor original as they have already been invented and registered by other manufacturers outside India and/or in India. And, hence so far as the impugned designs of the plaintiff are concerned, they are neither new nor original as they have already been invented and registered by other manufacturers outside India and/or in India. Counsel has further submitted that the defendant got a Design Invalidation Search done in respect of impugned Design No.1and 2 i.e. design No.299039 and 299041-for the container and the lid for the container, and vide its report dated 29.2.2020, IIPRD, which provides complete and Patent Analytics including due diligence of Intellectual Property Assets, has clearly enumerated and given details of the designs similar to the impugned designs which have already been registered and/or application for registration filed all over the world, prior to the date of filing by the plaintiff i.e. prior to 1.11.2017. Copy of the said report has been filed along with the written statement filed by the defendant, which clearly shows that the other similar designs have already been registered and/or have been filed for registration outside India. Thus, it is submitted that when even the suit of the plaintiff is liable to be dismissed, it cannot claim any relief for temporary injunction. Counsel has drawn attention of this Court towards the plaintiff’s own publication on its own website wherein similar designs of the containers have been prior published and made available to the public at large starting from 9.8.2009, whereas the plaintiff filed for registration its impugned designs only on 1.11.2017. Thus, it is submitted that the impugned designs being in public domain since long, no case for grant of any relief to the plaintiff is made out as the Design No.1 and 2 squarely falls within prohibition of section 4(b) of the Design Act which provides for the prohibition of registration of certain design especially which has been disclosed to the public anywhere in India or in any other country. Counsel has submitted that the prior publication of its own website destroys the novelty of both the impugned designs and thus, the said designs are liable to be cancelled. 9. Counsel has submitted that the prior publication of its own website destroys the novelty of both the impugned designs and thus, the said designs are liable to be cancelled. 9. It is further submitted that the plaintiff has also sought damages in terms of the profit which the defendant has earned by way of using the plaintiff’s designs, which clearly means that it is not a case of irreparable injury having caused to the plaintiff as the same can be compensated in terms of money if a decree is passed in favour of the plaintiff. 10. In support of his submissions, counsel for the defendant has relied on the following citations :- 1) Dart Industries v. Polyset Plastics Ltd. {(2018)SCC Online Delhi 10229.} 2) Castrol India Ltd.v.Tide Water Oil Company India Ltd. {(1994) SCC Online Calcutta 303} 3) Rotomac Pens Ltd. v. Milap Chand and Company {(1989)SCC Online Calcutta 423}. 4) Whirlpool of India Ltd. v. Videocon Industries Ltd. {(2014) SCC Online Bombay 565} 5) Bharat Glass Tube Ltd. v. Gopal Glass Works Ltd. { (2008) 10 SCC 657 } 6) Goderaj Sara Lee Ltd. v. Reckitt Benckiser Australia Pty. Ltd. { (2010) 2 SCC 535 .} 11. Thus, it is submitted that, the plaintiff Company have failed to prove the necessary conditions for grant of temporary injunction viz; prima-facie case, balance of convenience and irreparable injury. Counsel has also filed an application under Order 11 rule 1-A (iii) read with section 51 of the C.P.C. to file additional documents on record, which are actually the screen shot printouts/printouts of plaintiff’s website to demonstrate that the design which the plaintiff is claiming now which has been registered in the year 2017 existed much prior to the year 2017 in the annual report of plaintiff of 2015. 12. In rebuttal, Shri Assudani has submitted that until and unless the designs are not cancelled by the Controller the defendant cannot claim that the designs are not noble or original or that it has been disclosed to public prior to the filing date and thus the objections are of no avail. Counsel has further submitted that in the counter affidavit the plaintiff company have traversed the contentions made by the defendant in its reply to the application for temporary injunction and none of the contentions raised by the defendant are admitted by the plaintiff. Counsel has further submitted that in the counter affidavit the plaintiff company have traversed the contentions made by the defendant in its reply to the application for temporary injunction and none of the contentions raised by the defendant are admitted by the plaintiff. Thus, it is submitted that the defendant be restrained from manufacturing and selling the container and the lid in question. 13. In support of his contentions, Shri Assudani has relied on the following citations : 1. Bharat Glasstube Ltd. v. Gopal Glass works ltd. (2008)10 SCC 657 . 2. Dart Industries v. Polyset Plastics Pvt. Ltd. 2018 SCC Online Del 10229 3. Castrol India Ltd. v. Tide Water Oil Co. (I) Ltd. 1994 SCC OnLine Cal 303 4. Whirlpoor of India Ltd. v. Videocon Industries Ltd. 2014 SCC OnLine Bom 565 5. Rotomac Pens Ltd. v. Milap Chand & Co. 1998 SCC OnLine Cal 423 14. Also heard on application under Order 7 rule 11 of the Code of Civil Procedure for dismissal of the counter claim filed by the defendant on the ground that the reliefs sought by the defendant in the counter claim are statutorily barred as the cancellation of the registration the designs can only be done by the Controller of Design under section 19 (1) of Design Act, 2000 and thereafter an appeal lies from the order of Controller to the High Court. Thus, the District Court does not have any jurisdiction and hence, the counter claim deserves to be dismissed. Counsel has further submitted that the remedy available to the defendant was to prefer an application for cancellation of the registration of the designs before the Controller only. It is further submitted that the plaintiff’s designs have been registered in Hyderabad and the cause of action for challenging the said design have arisen in Hyderabad only and not at a place where the suit for infringement of registered design has been filed. In support of his submissions, Shri Assudani has relied up the decision rendered by the Supreme Court in the case of Goderaj Sara Lee Ltd. v. Reckitt Benckiser Australia Pty Ltd. reported in (2010) 2 SCC 535 . It is further submitted that even the valuation of the counter claim is improper as the counter claim has to be considered as a civil suit only and ought to have valued accordingly. It is further submitted that even the valuation of the counter claim is improper as the counter claim has to be considered as a civil suit only and ought to have valued accordingly. And even otherwise the counter claim is not in proper format and is liable to rejected on this ground. 15. Shri Grover, learned counsel for the defendant has opposed the prayer and it is submitted that the counter claim can only be presented in the same Court in which the suit itself is filed. It is also submitted that this civil suit has been transferred to this Court only on an application filed by the defendant u/S.22(4) of the Design Act as it has raised its objections in the written statement along with counter claim as provided under S.19 of the Act. 16. Heard counsel for the parties and also perused the record. 17. So far as the application filed under Or.39 rule 1 and 2 is concerned, from the record, it is found that the plaintiff Mold Tek has got the designs of its container under Design Application No.299039 and Lid, under Design Application No.299041 registered on 1.11.2017 by the Controller General of Patents, Designs and Trademarks, Hyderabad. However, in the considered opinion of this Court, the registration of the designs does not give any presumption that the designs are not previously registered in India or that it is an original design etc., as according to section 10 of the Designs Act, the register of designs shall be prima-facie evidence of any matter by the Design Act directed or authorized to be entered therein and that is why S.19 of the Designs Act also provides for cancellation of the registration on the grounds mentioned therein, as also under second proviso to sub-section (2) of section 22 of the Designs Act, 2000. Although, counsel for the plaintiff has vehemently argued before this Court that the plaintiff has got a prima-facie case, however, considering the material which has been placed on record by the defendant regarding the fact that on earlier occasions, the plaintiffs’ own website has published the container and lid of the container of the same designs, as also the documents to demonstrate that the other manufacturers also, in other part of the world, have adopted the same design prior to 1.11.2017 which is the date of the registration of the plaintiffs’ designs. Although the petitioner has traversed the aforesaid averments of the defendant, however, in the considered opinion of this Court, the matter appears to be arguable and the plaintiffs’ claim of injunction can only be considered after the evidence is led by the parties. It is also found that the plaintiffs have also claimed damages from the defendant under various acts which indicates that the loss which according to the plaintiff it has suffered is quantifiable hence it cannot be said that an irreparable loss or injury is likely to be caused to the plaintiffs, thus, this Court does not find any prima facie case in favour of the plaintiff. And it cannot also be said that the balance of convenience is tilted in favour of the plaintiffs, specially when the defendant’s primary objection is that it is not the manufacturer of the container and the lid of the container, as it procures the same from another Company viz, Viva Packaging Pvt. Ltd. (earlier known as “Alpha Packaging Pvt. Ltd.”, Daman) having its office at Survey No. 256/P-1, plot No. 36 to 41 Balda Industrial Park, Village-Balda, Taluka-Pardi, District- Valsad- 396 125, since May 2019. In such circumstances, when the plaintiffs have not sought any reliefs against the said Viva Packaging Pvt. Ltd.Company despite its name having disclosed by the defendant as early as on 2.3.2020, at the time when the written statement was filed, this Court is not inclined to accept the contentions raised by the counsel for the plaintiffs Shri Assudani in support of the application for temporary injunction. The judgements relied upon by shri Asudani are of no avail to the plaintiff and the same are distinguishable on facts. 18. Accordingly, the application for temporary injunction is hereby rejected. 19. So far as the application filed under order 7 rule 11 is concerned, this Court finds that this civil suit itself has travelled from the district Court to this Court on an application filed by the defendant under S.22(4) of the Design Act for transfer of civil suit from district Court to High Court. The district Court passed the order on 23.3.2020, allowing the application but the suit was directed to be filed in the High Court of Calcutta. The district Court passed the order on 23.3.2020, allowing the application but the suit was directed to be filed in the High Court of Calcutta. The aforesaid order was challenged by the defendant before this Court, and this Court, in MP No.2156/2020 vide its order dated 1.9.2020 set aside the order of the district Court and held that only the district Court has the jurisdiction to try the suit. The aforesaid order dated 23.3.2021 was again assailed by the defendant in the Supreme Court in Civil Appeal No.3695/2020 and vide its order dated 1.12.2020 set aside the order passed by this Court and held as under :-- “20. In view of the above, the order of the Commercial Court at the District Level is in accordance with law. However, we are unable to agree with the Commercial Court to transfer such suit to Calcutta High Court. The High Court, where the cuase of action arises has the jurisdiction to entertain the suit in terms of Godrej Sara Lee. Since no part of cause of action has arisen within the jurisdiction of Kolkata, the suit is liable to be transferred to Madhya Pradesh High Court, Indore Bench. In fact, the plaintiff has filed suit at Indore, Madhya Pradesh only. 21. Thus, we find that the order of the High Court is not sustainable. The same is set aside and the matter is remitted to the High Court of Madhya Pradesh, Indore Bench, who shall decide the suit in accordance with law. The appeal is disposed of in the above terms.” 20. Suffice it to say that the supreme Court has already taken note of the defence raised by the defendant and has thought it fit to transfer the civil suit to this Court under the provisions of S.22(4) of the Design Act. At this juncture, it would be apt to refer to S.22 of the Design Act which reads as under :-- “22. At this juncture, it would be apt to refer to S.22 of the Design Act which reads as under :-- “22. Piracy of registered design.—(1) During the existence of copyright in any design it shall not be lawful for any person— (a) for the purpose of sale to apply or cause to be applied to any article in any class of articles in which the design is registered, the design or any fraudulent or obvious imitation thereof, except with the licence or written consent of the registered proprietor, or to do anything with a view to enable the design to be so applied; or (b) to import for the purposes of sale, without the consent of the registered proprietor, any article belonging to the class in which the design has been registered, and having applied to it the design or any fraudulent or obvious imitation thereof; or (c) knowing that the design or any fraudulent or obvious imitation thereof has been applied to any article in any class of articles in which the design is registered without the consent of the registered proprietor, to publish or expose or cause to be published or exposed for sale that article. (2) If any person acts in contravention of this section, he shall be liable for every contravention— (a) to pay to the registered proprietor of the design a sum not exceeding twenty-five thousand rupees recoverable as a contract debt, or (b) if the proprietor elects to bring a suit for the recovery of damages for any such contravention, and for an injunction against the repetition thereof, to pay such damages as may be awarded and to be restrained by injunction accordingly: Provided that the total sum recoverable in respect of any one design under clause (a) shall not exceed fifty thousand rupees : Provided further that no suit or any other proceeding for relief under this sub-section shall be instituted in any Court below the Court of District Judge. (3) In any suit or any other proceeding for relief under sub-section (2), every ground on which the registration of a design may be cancelled under section 19 shall be available as a ground of defence. (3) In any suit or any other proceeding for relief under sub-section (2), every ground on which the registration of a design may be cancelled under section 19 shall be available as a ground of defence. (4) Notwithstanding anything contained in the second proviso to sub-section (2), where any ground on which the registration of a design may be cancelled under section 19 has been availed of as a ground of defence and sub-section (3) in any suit or other proceeding for relief under sub-section (2), the suit or such other proceeding shall be transferred by the Court, in which the suit or such other proceeding is pending, to the High Court for decision. (5) When the Court makes a decree in a suit under sub-section (2), it shall send a copy of the decree to the Controller, who shall cause an entry thereof to be made in the register of designs.” 21. A harmonious reading of S.22(2) to 22(5) clearly reveals that a defendant in a suit filed under S.22(2) can raise all the objections in his written statement which are available to him while filing an application for cancellation of registration under s.19 of the Design Act. Sub-section (4) of S.22 provides for transfer of suit to the High Court if the defendant has taken up the grounds available to him under s.19 of the Design Act. And most importantly, S.22(5) provides that, “When the Court makes a decree in a suit under sub-section (2), it shall send a copy of the decree to the Controller, who shall cause an entry thereof to be made in the register of designs.”, which, in the considered opinion of this Court can only be done in a case of cancellation of registration. 22. So far as register of design is concerned, it is provided under S.10 of the Act and obviously, the entry in this register can only be made when an application in this behalf is submitted by a party and it can only be cancelled as provided under S.19 or under S.22(5) of the Design Act. 22. So far as register of design is concerned, it is provided under S.10 of the Act and obviously, the entry in this register can only be made when an application in this behalf is submitted by a party and it can only be cancelled as provided under S.19 or under S.22(5) of the Design Act. In such circumstances, when a decree is prepared under S.22(2) of the Design Act and is sent to the Controller for causing the entry thereof to be made in the register of designs, it follows that in case of any adverse decree against the plaintiff on grounds raised by the defendant as provided under S.22(3), the entries in the Register of designs have to be cancelled, hence, it cannot be said that an application for cancellation of design can only be submitted before the Controller only and not before the High Court. Thus, this Court holds that it has the jurisdiction to try the counter claim filed by the defendant for cancellation of registration of design under the Design Act, 2000 in a suit filed by the plaintiff for declaration and injunction in respect of the disputed designs. 23. So far as filing of a separate civil suit is concerned, this Court has already held that the only option available before the defendant is to file a counter claim in the present suit only and that it has to take up defence as provided under section 19 of the Designs Act. And in such circumstances, it cannot be held that the defendant was required to file a separate civil suit seeking cancellation of the design of the plaintiffs. 24. So far as the ground regarding the Court fees and valuation is concerned, it is found that the defendants have stated in their reply that they would be deposited such fees as may be directed by this Court, if found insufficient on counter claim. It is further submitted that, in paragraph 33 of the written statement along with counter claim contains the valuation clause and the Court’s fee has already been paid accordingly. 25. In view of the aforesaid, this Court is also not inclined to accept the grounds raised by the plaintiffs under Order VII rule 7 of the CPC for the rejection of the counter claim. As a result, the application is being devoid of merits and is hereby dismissed. 26. 25. In view of the aforesaid, this Court is also not inclined to accept the grounds raised by the plaintiffs under Order VII rule 7 of the CPC for the rejection of the counter claim. As a result, the application is being devoid of merits and is hereby dismissed. 26. Since the written statement has already been filed, the parties are directed to submit the proposed issues to be framed. Let the matter be listed on 21.9.2021 for settlement of issues.