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Maintainability of Design Rectification by Way of Counterclaim in a Design Infringement Suit

In the context of intellectual property law, the maintainability of design rectification via counterclaims in design infringement suits presents a significant legal issue. This article delves into whether a defendant can file a design rectification petition by way of a counterclaim in a design infringement suit, against the backdrop of the Designs Act, 2000, and pertinent judicial pronouncements.

Background of the Case:
The present suit involves allegations of design piracy by the defendant concerning designs registered in favor of the plaintiff under Registration Nos. 296178, 296179, and 296180. During the pendency of the proceedings, the defendant filed a counterclaim seeking cancellation and expunction of these registered designs from the Register of Designs. Additionally, the defendant filed an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure (CPC), seeking a stay on the operation and effect of the contested designs.

Plaintiff's Objections:
Lack of Provisions in the Designs Act:
The plaintiff argued that the Designs Act does not provide for the filing of a counterclaim. They highlighted that, per Section 19, the revocation and cancellation of a registered design must be raised before the Controller of Designs.

Grounds of Defense under Section 22(3):
The plaintiff acknowledged that Section 22(3) allows the grounds for cancellation under Section 19(1) to be used as a defense in a piracy suit. However, they contended that this does not extend to filing a counterclaim for revocation, which should be directed exclusively to the Controller of Designs.

Legislative Intent:
The plaintiff pointed out that under the Designs Act of 1911, petitions for cancellation could be brought before the High Court, a provision that was consciously altered in the 2000 Act, conferring such jurisdiction exclusively to the Controller.

Defendant's Argument:
The defendant relied heavily on the Supreme Court's decision in "S.D. Containers Indore Vs. Mold-Tek Packaging Ltd (2021) 3 SCC 289". In this case, Mold-Tek Packaging Ltd. (MTPL) had instituted a suit against S.D. Containers Indore (SDC) for infringement of its registered designs. SDC, in its defense, claimed invalidity of the designs and filed a substantive counterclaim for their cancellation.

The Commercial Court transferred the suit to the High Court, a decision upheld by the Supreme Court. The Supreme Court observed that Section 22(4) of the Designs Act, which permits a defendant to seek design cancellation, mandates the court to transfer the suit, implicitly allowing counterclaims for design cancellation within the purview of the court.

Implication of Supreme Court S.D. Containers:
The decision of Supreme Court in S.D. Containers effectively settled the issue of maintainability of design rectification via counterclaims in design infringement suits. By affirming the Commercial Court's decision to transfer both the infringement suit and the counterclaim to the High Court, the Supreme Court underscored the viability of such counterclaims. This ruling ensures that defendants in infringement suits can seek design rectification without being compelled to initiate separate proceedings before the Controller of Designs.

In light of this judicial precedent, the plaintiff's objection to the maintainability of the counterclaim in the present suit was rejected. The Supreme Court's interpretation harmonizes the procedural aspects of design law, allowing for a more integrated and efficient resolution of design disputes. This ruling reflects a significant shift towards a more defendant-friendly approach in design infringement cases, enabling a holistic adjudication process that encompasses both infringement and validity issues in a single forum.

Author's Note:
The decision in S.D. Containers has broad implications for the landscape of design law in India. It introduces an understanding of the Designs Act, 2000, promoting a balanced approach that considers the interests of both plaintiffs and defendants. By facilitating the counterclaim mechanism within the framework of design infringement suits, the judiciary has paved the way for more streamlined and just resolutions of design disputes. This development is a testament to the evolving nature of intellectual property law and its responsiveness to the dynamic needs of the legal and business communities.

Case Citation: Novateur Electrical & Digital Systems Pvt. Ltd. Vs V-Guard Industries Limited: 08.02.2023: CS COM 567 of 2021 : 2023:DHC:000960:Delhi High Court: C Hari Shankar, H.J.

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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