The Indian legal landscape is a veritable labyrinth, especially when it comes to Intellectual Property (IP). The relationship between statutes, in particular, the Industrial Designs and Copyright, is tricky to navigate. The recently delivered judgment of the Hon’ble Supreme Court of India rendered in the case of Cryogas Equipment Private Limited v. Inox India Limited and Others, brings much needed clarity on this convoluted relationship, by providing an essential framework to understand the nexus between Industrial Designs and Copyright registration.
Read the complete judgement here: https://api.sci.gov.in/supremecourt/2024/52663/52663_2024_3_1501_60892_Judgement_15-Apr-2025.pdf
The Core of the Dispute:
The dispute in this case revolves around IP rights being violated in the design and manufacturing of internal parts for cryogenic storage tanks and cryogenic distribution systems for trailers and semi-trailers. Essentially, the question was:
Whether the drawings of these cryogenic trailers, prepared by Inox, protectable as a Copyright under the Copyright Act, 1957 or whether such trailers protectable as an Industrial Design under the Design Act, 2000?
The Factual Background:
Inox Pvt. Ltd. filed this suit against Cryogas Equipment Private Limited (Cryogas) and LNG Express India Private Limited (LNG Express) for infringement of copyright. Inox alleged that Cryogas and LNG Express were in breach of two separate classes of copyright, namely, (1) the drawings of the LNG semi-trailers (Proprietary Engineering Drawings) and (2) literary works developed by Inox employees that described the design and manufacture processes.
In response, LNG Express contended that the drawings were a ‘design’ within the meaning of the Designs Act and that they had lost their copyright protection because they were never registered. They also argued that no copyright protection exists for designs that are reproduced industrially in numbers exceeding fifty.
Case’s Journey Through The Lower Courts:
Initially, the Commercial Court dismissed Inox’s contentions and ruled in the favour of LNG. But this decision was set aside by the Gujarat High Court in favor of Inox. The High Court held that the Commercial Court had incorrectly interpreted the law and referred this matter back to the lower court for a fresh trial as the case had a complicated mix of facts and law which could only be adequately decided at the trial stage.
After this order, the matter was again brought before the Commercial Courts wherein they again rejected Inox’s contentions leading to another appeal before the High Court. The same observation was again reiterated by the Hon’ble High Court as earlier, finally leading to the appeal of this matter before the Hon’ble Supreme Court.
How the Supreme Court Analyzed It: Two-Step Test
Recognizing the intricacy of the question at hand, the Hon’ble Supreme Court gave a nuanced two-step test. At first, the Hon’ble Court examined the difference between the definition of ‘design’ under the Designs Act and an ‘artistic work’ under the Copyright Act. It analyzed the relevant provisions of both Acts, drawing attention to the common differences of both in terms and its purpose.
After thorough analysis, the court recommended a measure known as ‘functional utility’ which has been well entrenched into Indian as well as international jurisprudence. It determines whether the function is more important than the form or vice versa. If the main feature of the design is its functional utility, then it would generally be governed by the Designs Act.
Highlights from the Judgment:
- The Functional Utility Test Matters: The Hon’ble Supreme Court reemphasized the importance of the functional utility test for deciding entitlement to the protection granted under the Designs Act.
- Industrial Designs and Copyright: The Inherent Tension: The judgment emphasizes a need for the two statutes to be joined up, recognizing that if a “artistic work” qualifies for copyright protection then the commercial or industrial use thereof (the “design” produced/derived from it) can only be undertaken in accordance with the exceptions provided for in Copyright Act.
- The Function of Copyright Industrial Reproduction: The Court confirmed that copyright protection ends from the moment a design is fixed to an article and reproduced industrially from a threshold (generally speaking above 50 times).
- Exclusion by Design: The Court held that just because something doesn’t represent an “artistic work” for purposes of the Copyright Act, it does not mean it is protected by the Designs Act either. You still have to apply the functional utility test.
- Primacy of the Commercial Court: The Hon’ble Supreme Court affirmed the High Court’s decision to direct the matter back to the Commercial Court for trial, noting that the complicated issues of law and fact necessitated a much more granular exploration.
Significance and Implications:
This judgment is a guiding light for business, lawyers and judiciary in India. It helps clarify the standards for assessing what the appropriate IP protection would be for designs, especially those that exhibit both artistic and functional components. Which is particularly true in context with industries such as manufacturing, engineering, and product design, where artistry often overlaps with that of useable utility.
The Hon’ble Supreme Court, through its observations and test given in this case, has clarified a long-standing legal confusion. Businesses also need to analyze the nature of their designs, as well as the intended use of the designs, to decide which form of protection is most appropriate, namely– copyright or design registration.
Conclusion:
Judgment in The Cryogas Equipment Private Limited v. Inox India Limited, however, acts as a beacon to tackle the complexities of IP laws in India. It clarifies the boundaries between Industrial Designs and Copyright protection, emphasizes the importance of the functional utility test, and calls for a careful approach to balancing protection for artistic creativity and commercial inventiveness. The ruling is a significant development in enhancing transparency and uniformity in the enforcement of intellectual property rights, paving the way for more secure and predictable environment for innovation and creativity in the Indian market.
Author Details: Aditya Krishna Gupta, 3rd year, BA LL.B. , Jiwaji University, Gwalior
References
- Hon’ble Supreme Court of India Official Website
- Copyright Act, 1957
- Designs Act, 2000
- The Economic Times – Legal News
- World Intellectual Property Organization (WIPO)
- SSRN (Social Science Research Network)
- Manupatra
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