Supreme Court Clarifies Copyright vs Design Protection in Landmark IPR Judgment

The Supreme Court of India recently delivered a significant judgment that clarifies the complex interplay between copyright and design protection under Indian intellectual property laws. The case involved Cryogas Equipment Private Limited and LNG Express India Private Limited as appellants against Inox India Limited and others as respondents.

The dispute centered around alleged copyright infringement concerning the designing and manufacturing of internal parts for Cryogenic Storage Tanks and Distribution Systems used for transporting industrial gases and liquefied natural gas (LNG). The appellants challenged the High Court’s decision that set aside the Commercial Court’s order which had allowed their application under Order VII Rule 11 of the CPC to reject Inox’s suit.

Key Arguments from the Petitioners (Cryogas and LNG Express):

Mr. Shyam Divan, learned Senior Counsel appearing for the appellants, made several crucial arguments:

“The Suit is barred under Section 15(2) of the Copyright Act, as the Proprietary Engineering Drawings, for which Inox claims copyright infringement, are capable of being registered under the Designs Act. The copyright protection for such drawings would cease to subsist in view of Section 15(2) of the Copyright Act once Semi-trailers are reproduced or manufactured more than fifty times through an industrial process.”

“The objective of the Copyright Act is to protect artistic works such as paintings, sculptures, and other forms of creative expression for extended periods. In contrast, the Designs Act is intended to safeguard industrial designs for a limited duration to facilitate commercial exploitation.”

“Inox has failed to disclose in its plaint before the Commercial Court the number of Semi-trailers it has produced through an industrial process. Instead, it has engaged in strategic drafting by selectively revealing that it has generated revenue of Rupees 122 crores, seemingly to circumvent the legal effect of Section 15(2) of the Copyright Act.”

Key Arguments from the Respondents (Inox India Limited):

Mr. Chander M. Lall and Mr. J. Sai Deepak, Learned Senior Counsels representing Inox, countered these arguments:

“Industrial drawings, such as the Proprietary Engineering Drawings, fall within the definition of ‘artistic works’ under Section 2(c) of the Copyright Act. An artistic work can be denied copyright protection by invoking Section 15(2) of the Copyright Act only if such work is either registered or capable of being registered under the Designs Act.”

“The Literary Work in question is not subject to the bar under Section 15(2) of the Copyright Act. The Commercial Court erred in concluding that the Literary Work, including details, processes, and descriptions, is merely a reference to the Proprietary Engineering Drawings and the information contained therein.”

“The infringement arising from the theft of confidential information constitutes a distinct legal issue and is not subject to the limitations imposed by Section 15(2) of the Copyright Act. Courts have consistently recognised that confidential information is a separate legal concept possessing independent value, warranting protection under common law principles.”

The Court’s Analysis and Key Findings:

The Supreme Court, in its detailed analysis, laid down important principles regarding the distinction between copyright and design protection:

“The expression ‘artistic work’ under Section 2(c) of the Copyright Act has a very wide connotation and may also include abstract work(s) comprising a few lines or curves arbitrarily drawn, which could be either two or three-dimensional. It may be clarified that such a work may or may not have any visual appeal.”

“However, if such reproduction is done by employing an industrial process, which may be manual, mechanical or chemical, and which results in a finished article that may appeal to the eye, then ‘the features of shape, configuration, pattern, ornament or composition of lines or colours applied to the article by such an industrial process’, constitutes ‘design’ within the meaning of Section 2(d) of the Designs Act.”

The Court formulated a two-pronged test to resolve such disputes:

“We have thus formulated a two-pronged approach in order to crack open the conundrum caused by Section 15(2) of the Copyright Act so as to ascertain whether a work is qualified to be protected by the Designs Act. This test shall consider: (i) whether the work in question is purely an ‘artistic work’ entitled to protection under the Copyright Act or whether it is a ‘design’ derived from such original artistic work and subjected to an industrial process based upon the language in Section 15(2) of the Copyright Act; (ii) if such a work does not qualify for copyright protection, then the test of ‘functional utility’ will have to be applied so as to determine its dominant purpose, and then ascertain whether it would qualify for design protection under the Design Act.”

Conclusion and Directions:

The Supreme Court ultimately dismissed the appeals and upheld the High Court’s decision, providing clear directions:

“The decision of the High Court rejecting the application under Order VII Rule 11 of the CPC is upheld;”

“The Commercial Court is directed to deliver its decision on the pending application seeking interim injunction preferred by Inox, within a period of two months;”

“The Commercial Court is further directed to conduct trial and discern the true nature of the Proprietary Engineering Drawings based upon the test laid down in paragraph 60 of this judgement, as also the other related IP right infringements claimed by Inox, within a period of one year, given that it has already wasted significant judicial time on this issue.”

This landmark judgment provides much-needed clarity on the complex relationship between copyright and design protection in India, establishing clear parameters for determining which regime applies to specific types of intellectual property.

Petitioner Name: Cryogas Equipment Private Limited & LNG Express India Private Limited.
Respondent Name: Inox India Limited and Others.
Judgment By: Justice SURYA KANT, Justice NONGMEIKAPAM KOTISWAR SINGH.
Place Of Incident: Vadodara, Gujarat.
Judgment Date: 15-04-2025.
Result: dismissed.

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