In the recent case of Holland Company LP & Anr. vs. S.P. Industries[1], the Delhi High Court vide its order dated July 27, 2017, disposed off the application filed by the Holland Company LP seeking injunction to restraining S.P. Industries from manufacturing or selling Automatic Twist Lock (hereinafter referred to as “ATL”) and spare parts, as well as to restrain them from reproducing the ATL spare parts in 3-D form, from the 2-D artistic work of Holland Company LP in the form of the industrial drawings.

Brief facts-

The present suit was filed by Holland Company LP (hereinafter referred to as the Plaintiff No. 1) which deals in the railways supply industry for car/wagon components, and manufactured and supplied the Indian Railways with ATL, which is a system for securing cargo containers to a support. The Plaintiff No. 1 claimed to have a copyright over the industrial drawings of the ATL and spare parts thereto. M/s. Sanrok Enterprises (hereinafter referred to as Plaintiff No. 2) is the exclusive licensee of the Plaintiff no. 1 in India for manufacturing, selling, marketing and servicing Plaintiff no. 1’s ATL and spare parts. The Plaintiffs had previously supplied the drawings of the ATL device and its spare parts to Indian Railways, who thereafter used it on its container flat wagon.

      Subsequently, the Eastern Railway, Sealdah Division had floated a tender for carrying out repairs, replacement of spare parts and servicing of the defective parts of the ATL devices. S.P. Industries (hereinafter referred to as the ‘Defendant’) had successfully outbid Plaintiff No. 2, and was awarded the aforesaid contract. The Plaintiffs claimed that the Defendant does not have the requisite know-how to replace and repair the spare parts of the ATL device which was supplied to the Indian Railways by the Plaintiffs, and that since they have artistically created the ATL, they have the right to maintain and sell the spare parts of the same and no other party has any right over the same. Accordingly, the Plaintiffs instituted the suit for permanent injunction before the Delhi High Court.

Vide its order dated May 20, 2014, the Hon’ble High Court of Delhi had dismissed the application filed by the Plaintiffs under Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908 (hereinafter referred to as the CPC) seeking permanent injunction against the Defendant. Aggrieved by the said order, the Plaintiff filed an appeal bearing no. CS (COMM) 1419/2016 wherein vide order dated September 12, 2014, the Hon’ble Court was directed to decide the application afresh.

Contentions of the Plaintiffs:

  • The Plaintiffs claim that the spare parts which are the subject matter of the above mentioned tender are components of ATL devices manufactured and supplied by the Plaintiffs, who also claim to have a patent over the said device (an application for registration of the patent has been moved and published) and copyright over the industrial drawings of the ATL and its spare parts.
  • That since the Plaintiffs are the real owners of the ATL devices and spare parts thereof, and since the Plaintiffs possess copyright and patent over the same, no third party has the right to sell, manufacture, offer to sell or advertise ATL devices or spare parts thereto.
  • The Plaintiffs held that the Defendant has intentionally, deliberately, knowingly and willfully offered its substandard products and services to be used in Indian Railways.
  • That a combined reading of Section 2 (c), Section 13 (1) (a) and Section 14 (c) (i) (B) of the Copyright Act, 1957, shows that a copyright exists in engineering drawings/technical drawings under the category of Artistic Works, which includes the exclusive right to depict the drawings in three dimensions. That such engineering drawings/technical drawings need not possess any artistic qualities to claim protection under Section 2 (c) of the Copyright Act, 1957.
  • That the Designs Act, 2000, features “appeal to the eye alone” and it does not apply to “functional” features. It is submitted that the Designs Act, 2000, therefore, is not applicable on the industrial/engineering drawings and technical drawings.
  • That in a case where the owner neither relinquished nor entered in public domain its copyright, it cannot be said that the work has entered in public domain.

Contentions of the Defendant

  • That industrial drawings are not an artistic work and, therefore, no copyright exists. The Plaintiffs are not the author of the work and hence, by necessary inference, are not entitled to protection under the law. Even if it was presumed that the Plaintiffs are the authors of the industrial drawings of the ATL, the same are capable of being registered under the Designs Act, 2000, are exempted from the purview of the Copyright Act, 1957.
  • That by virtue of Section 15 of Copyright Act, 1957, no copyright exists in any drawing or design once the production has been done more than 50 times by an industrial process using such drawing or design, and that the Plaintiffs have themselves admitted that they have supplied ATL devices to the Railways and thus by using drawing they have reproduced more than 50 articles.
  • That having lost the tender, the Plaintiffs cannot claim to have exclusive rights to repair and replace the ATL devices which belong to Indian Railways. Further, it was contended that the Plaintiffs also cannot be said to have exclusive intellectual property right over the said drawings since these drawings have been published and are readily available in the market.

Observations of the Court:

  • A conjoint reading of Section 2(d) of Designs Act, 2000, Section 14(c) and 15(2) of the Copyright Act, 1957, makes it amply clear that where a design of an article is prepared for the industrial production of an article, it is a design and registrable under Designs Act and under Section 14(c), the author of such design can claim copyright, however, since such a design is registrable under the Designs Act, and if such design has been used for production of articles by an industrial process for more than 50 times by the owner of the copyright, or, by any other person with his permission, then such person ceases to have copyright in such design.
  • ……Plaintiffs had prepared the engineering drawings for the purpose of production of ATL devices. The industrial drawings are, therefore, or a design of the ATL device which the Plaintiffs had supplied to the Railways under a contract given to them by the Railways. The drawings of the ATL devices of the Plaintiffs, therefore, are registrable under the Designs Act. The said drawings have not been registered under the Designs Act. The Plaintiffs have also not disputed the fact that while using these engineering drawings, it had used for more than 50 ATL devices by an industrial process and, therefore, it is clear that it has used these engineering drawings for more than 50 times in an industrial process. By virtue of Section 15(2) of Copyright Act, therefore, even if assuming the Plaintiffs had a copyright in these engineering drawings, it ceases to have the same.
  • “…The Plaintiffs have not made the Railways a party to the suit although in the facts and circumstances of the case it is a necessary party because prima facie it is the Railways who have used the engineering drawing of the ATL devices for inviting tenders…

Held:

For being entitled to interim injunction under Order 39 Rule 1 and 2, the Plaintiff is required to show a strong prima facie case which means the Plaintiff is required to show that it has a right which needs protection. The Plaintiffs have failed to show any prima facie case in their favour. In the light of the same, the application of the Plaintiffs under Order 39 Rules 1 and 2 CPC stands dismissed.