The Trade Marks Act does not automatically prevent a tread pattern that is to the suit pattern from being recognized as a "trademark".

CAUSE TITLE: 
Apollo Tyres Limited Vs Pioneer Trading Corporation & Ors

DATE OF ORDER: 
19 December 2022

JUDGE(S): 
HON'BLE MR. JUSTICE C. HARI SHANKAR

PARTIES: 
Petitioner: Apollo Tyres Limited versus
Respondent: Pioneer Trading Corporation & Ors

SUBJECT

In a case involving alleged tyre tread pattern copying, the Delhi High Court found that registering a tread pattern that is virtually identical to the suit pattern as a design would not ipso facto prevent it from being considered a "trademark" within the meaning of the Trade Marks Act, 1999.

"At the most extreme, the case would be one of trial, in which it would be determined whether the tread pattern recognized as a design was identical or nearly identical to the suit pattern,"

IMPORTANT PROVISIONS

Section 5 of the Designs Act.

Application for registration of designs.

Section 2(d) of the Designs Act.

defines the term design

BRIEF FACTS

• The plaintiff makes and distributes vehicle tyres, with the current claim focusing on tyres designed for use on trucks. According to the complaint, the plaintiff's tyres, which are sold under the trademark "ENDURACE LD," feature a distinct tread pattern.
• The plaintiff claims that the tread pattern of the plaintiff's "ENDURACE LD" tyres has been copied by Defendants 1 and 2 in their "MA Gold" and "909 LD Gold" range of tyres, in a way that would confuse or deceive an average purchaser of the tyre into believing the defendant's tyre is that of the plaintiff or into assuming an association of the defendant's tyre with the plaintiff. The plaintiff claims that by employing such a confusingly similar tread pattern, the defendants are effectively passing off their tyres as the plaintiffs.
• This prompted the plaintiff to file CS(OS) 2802/2015, which was subsequently renumbered CS(Comm) 739/2017. (Apollo Tyres Ltd. v. Pioneer Trading Corporation).
• Following that, the plaintiff and defendant reached an agreement to settle their problems, which culminated in a settlement agreement dated February 27th, 2018.

QUESTIONS RAISED

whether Apollo Tyres Limited, which has brought a suit against Pioneer Trading Corporation accusing it of breaching a 2018 settlement agreement, entitled to be non-suited because it applied for registration of the suit pattern as a design under Section 5 of the Designs Act?

ARGUMENTS ADVANCED BY THE APPELLANT

• By reusing the tread pattern for their "MA Gold" and "909 LD Gold" series of tyres, which was essentially identical to the trade design of the plaintiff's tyre, Defendants 1 and 2 had violated the conditions of the settlement agreement dated 28th February 2018, according to the plaintiff's argument.
• He claims that the differences between the trade pattern that was challenged in CS (Comm) 739/2017 and the impugned trade pattern, in this case, were so slight that a buyer of the tyre would not be able to tell one from the other.

ARGUMENTS ADVANCED BY THE RESPONDENT

• The terms of the settlement agreement dated February 27, 2018, could no longer bind defendants 1 and 2 since a material change in circumstances had occurred since the agreement's execution. The trade pattern of the plaintiff's tyre, which may have been exclusive to the plaintiff at the time of execution of the aforementioned settlement agreement dated 27th February 2018, has since over time come to be accepted by the trade. Because the pattern has become widespread, the plaintiff no longer has the right to assert exclusivity therein.
• further argued that the peculiarity of the tyre industry was in the fact that even little modifications in tread might cause a trade pattern to differ noticeably from another. The grip of the tyre on the road would alter with even the smallest adjustments, according to her argument, therefore minute changes would also be sufficient to give a certain trade pattern distinctiveness.
• Additionally, it claims that there is a wide range of truck tyres available, including radial, nylon, and other types. She argues that the trade pattern in radial tyres has a similar appearance because it is a crucial component of the functionality of the tyre in radial tyres. She has directed me to the table comparison that is previously provided in paragraph 22 above for this purpose.
• additionally argued that the claim should be rejected due to the misrepresentation of important facts. According to Section 5 of the Designs Act 2000, the plaintiff had applied to register the suit pattern as a design before withdrawing it.
• The fact that the application was withdrawn doesn't change the fact that one had been lodged in the first place. In light of the statutory exclusion of trademarks from the concept of "design," included in Section 2(d) of the Designs Act, the plaintiff has forfeited its ability to determine any statutory or common law rights in respect of the tread pattern by filing such an application. She contends that the plaintiff has suppressed these facts, which serves as grounds for dismissal of the claim even in and of itself.

ANALYSIS BY THE COURT

• The plaintiff had requested for registration of its tread pattern as a design, which is the first factor that needs to be taken into account when determining whether the plaintiff is to be declared non-suited. There is no questioning the fact that the plaintiff had requested the cancellation of its application and that no such registration had been granted.
• The plaintiff had registered designs for tread patterns that were almost exact replicas of the suit pattern. The Trade Marks Act of 1999 does not automatically prevent a tread pattern that is almost identical to the suit pattern from being recognized as a "trademark" within the meaning of that statute. The issue would likely end up in court, where it would be determined if the suit pattern and the tread pattern that had been registered as a design were similar or nearly identical.
• "Section 2(d) of the Designs Act cannot be used to make a decision. By Section 2(d) of the Designs Act, a mark would be ineligible to be regarded as a "design" under the Designs Act if it is eligible to be regarded as a "trademark" under the Trade Marks Act. It is in that direction, not the other way around, that these two statutes function "The court stated.
• The court acknowledged that, in Havells India Ltd. v. Panasonic Life Solutions India Pvt. Ltd., it may be expressing a viewpoint that differs slightly from that in Dart Industries. The subject pattern has not been registered as a design in the current case, according to the court, so there is no need for further discussion of the matter.
• "Even with the Dart Industries and Havells India Ltd judgments, the exclusion from the definition of "trademark" would only apply to registered designs. The suit pattern has no acknowledged design. Despite having filed a design registration application, the plaintiff then requested that the preceding application be withdrawn "It was included.
• On the merits, the court stated that in light of the terms of the settlement, the defendants cannot argue that the suit tread pattern was common to the industry or that it was a tread pattern that was employed by several radial truck tyre producers, at least at the prima facie stage.
• The court stated: "At the very least, the defendants acknowledged the impugned tread pattern in CS (Comm) 739/2017 as being deceptively similar to that of the plaintiff, to make out a case of passing off. This is suggested by the implied acknowledgment in CS (Comm) 739/2017 that the impugned tread pattern was unique and distinct, as well as the recording in the settlement agreement of the plaintiff's allegation that its tread pattern was unique and distinct.
• The sole distinction between the two tread patterns, according to the court, is the type of cuts or incisions made on the cubes in each tread pattern."Other than that, the layout of the various cubes/pieces in the two tread patterns is identical," the bench noted.
• The court rejected the claim that by agreeing to manufacture and sell the tyres, CEAT had acknowledged the distinctiveness of their tread pattern. The court noted that it is well established that the issue of passing off must be resolved from the perspective of a typical consumer who purchases the tyres.
• "The ordinary truck tyre buyer does not have access to the expertise of the CEAT personnel or the IRMRA certificate" (Indian Rubber Manufacturers Research Association).To the average consumer, the tyre design that was contested in CS (Comm) 739/2017 and the tread pattern at issue here are almost comparable "Justice Shankar stated.
• The court noted that the court in the order dated August 17, 2017, had already held that the tread pattern is a source indicator and that a purchaser of a truck tyre would purchase the tyre based on the tread pattern. The court stated that the impugned tread pattern in the current case may justifiably be regarded as misleadingly similar to the tread pattern of the plaintiff's tyres.
• "This Court is presumptive of the opinion that the defendants have, in reality, only made cosmetic adjustments to the tread pattern that is the subject of CS (Comm) 739/2017 in light of the settlement agreement dated February 27, 2018. The defendants' commitment in the aforementioned settlement agreement, whereby they committed not to produce any tread pattern that was comparable to the plaintiff's tread pattern and could, thus, result in passing off, cannot be regarded as sufficiently satisfied by these alterations "The court stated.
• The plaintiff's claim to have registered the tread pattern in question as a design, in this case, has likewise never been disputed by the court, according to the court's ruling. Additionally, even if the defendants were to have submitted designs for additional tread patterns for registration, that cannot, at least initially, bar the plaintiff from receiving interlocutory relief about the tread pattern in question.
• "I find it difficult to agree with this kind of thinking. The parties to an undertaking that is now in court are still bound by it unless it is changed. The defendants would need to ask this Court for the proper instructions if they felt that the undertaking in the settlement agreement from February 28, 2018, should no longer bind them due to a subsequent change in circumstances. They didn't do that. As a result, the endeavor is still in effect. Since the settlement agreement from February 28, 2018, was inked in 2018, this Court cannot proceed to a presumption that the plaintiff's suit tread pattern is no longer unique. That is an issue that would at the very least need to be tested in court, the panel ruled.
• The Court further stated that at a prima facie stage, while handling a request under Order XXXIX Rules 1 and 2, it would proceed under the assumption that Pioneer is still bound by the undertaking made in the Settlement Agreement.
• Apollo claimed earlier that Pioneer Trading had plagiarised the tread pattern of its ENDURACE LD tyre in the application for an interim injunction. Pioneer was accused by Apollo of passing off its tyres as Apollo's by employing a tread pattern that was confusingly close to Apollo's.
• The High Court accepted the suit and granted an interim injunction in Apollo's favour. Pioneer then applied to have the interlocutory injunction vacated. The court denied the application and stated: In light of the above arguments, I believe that the plaintiff has shown a strong prima facie case for upholding the ex-parte ad interim injunction that this court issued in the plaintiff's favour on August 30, 2022.

CONCLUSION

The Delhi High Court ruled that the registration of a tread pattern that is nearly identical to the suit pattern as a design would not ipso facto operate to disentitle it from being regarded as a "trademark" within the meaning of the Trade Marks Act, 1999, in a case relating to the alleged copying of tyre tread patterns.

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