The Hon'ble Supreme Court of India (SC) delivered a significant judgment dated April 15, 2025 in Cryogas Equipment Private Limited v. Inox India Limited & Others and LNG Express India Private Limited v. Inox India Limited & Others 1 addressing the intricate interplay between copyright protection and design registration in the context of industrially applied works and laid down two pronged test to resolve the longstanding ambiguity surrounding Section 15(2) of the Copyright Act, 1957 (Copyright Act), particularly in relation to the Designs Act, 2000 (Designs Act). SC also emphasised that such complex legal issues cannot be adjudicated at the preliminary stage, particularly in an application under Order VII Rule 11 of the Civil Procedure Code (CPC).
In the present matter, the dispute arose from a trademark suit (Suit) instituted by Inox India Limited (Inox) against Cryogas Equipment and LNG Express India Private Limited (LNG Express) (collectively as Appellants), concerning certain engineering drawings and accompanying literary descriptions associated with the manufacture of cryogenic semi-trailers. Inox asserted that these drawings, developed by its engineers, were protectable as 'artistic works' under the Copyright Act, and claimed proprietary rights over the literary elements integral to the design process. In the said Suit, Inox inter alia sought declaratory and injunctive reliefs for alleged infringement of its 'Proprietary Engineering Drawings', Intellectual Property (IP), and Literary Works, along with damages of Rs. 2 Crores and a direction for surrender and destruction of infringing materials. It also filed an application under Order XXXIX Rules 1 and 2 of CPC seeking ad interim restraint against further infringement of its IP rights and confidential information during the pendency of Suit.
In response, LNG Express filed an application under Order VII Rule 11 of the CPC, seeking rejection of the plaint on the ground of maintainability in view of Section 15(2) of the Copyright Act. It primarily contended that the drawings in question constituted 'designs' within the meaning of Section 2(d) of the Designs Act and were therefore, ineligible for copyright protection, particularly since the drawings had been reproduced more than fifty times through an industrial process. LNG Express specifically contested Inox's assertion of having generated revenue amounting to Rs. 122 Crores, arguing that such earnings could only have resulted from the industrial scale manufacture of cryogenic semi-trailers using the 'Proprietary Engineering Drawings', thereby exceeding the statutory threshold prescribed under Section 15(2) of the Copyright Act. Thus, LNG Express submitted that no protection could be availed under the Copyright Act, and that the Suit is not maintainable.
The 4th Additional District Judge at Vadodara (Commercial Court) vide its order dated April 1, 2022, allowed the application filed by LNG Express under Order VII Rule 11 of the CPC and consequently, rejected the plaint and dismissed Inox's application for ad interim injunction. Aggrieved by this decision, Inox preferred two appeals before the Hon'ble High Court of Gujarat (High Court) challenging the Commercial Court's order. By way of a common order dated March 13, 2024, the High Court set aside the decision of the Commercial Court, holding that it had erred in law in allowing the application under Order VII Rule 11 of the CPC, and remanded the matter for reconsideration, restoring the suit to its original number and directing the Commercial Court to adjudicate the pending applications independently, by way of separate orders.
Pursuant to the High Court's directions, the Commercial Court reconsidered the matter and, by separate orders dated May 3, 2024, again allowed LNG Express' application under Order VII Rule 11, thereby once again resulting in the rejection of the plaint and dismissal of Inox's injunction application. Inox once again approached the High Court, challenging the Commercial Court's orders dated May 3, 2024. The High Court vide common judgment dated October 22, 2024 allowed the appeal filed by Inox and set aside the Commercial Court's orders dated May 3, 2024. High Court observed that the Commercial Court had erred in law by presuming that the 'Proprietary Engineering Drawings' qualified as a 'design' under Section 2(d) of the Designs Act. High Court further observed that the Commercial Court had wrongly concluded that the drawings stood excluded from copyright protection under the Copyright Act merely because the same had been used to manufacture a product more than fifty times through an industrial process. High Court held that, based on this presumption, the Commercial Court had wrongly concluded that the drawings stood excluded from copyright protection under the Copyright Act thereby, dismissing the application filed by LNG Express under Order VII Rule 11 of the CPC and restoring the Suit filed by Inox. Hight Court further reinstated Inox's interim injunction application filed under Order XXXIX Rules 1 and 2 of the CPC and directed that the said application be decided on its merits independently by the Commercial Court, preferably within a period of eight weeks.
The said order of High Court was eventually appealed before the SC, which in turn framed two central issues, first, the parameters for determining whether a work falls within the limitation under Section 15(2) of the Copyright Act, thereby classifying it as a 'design' under Section 2(d) of the Designs Act; and second, whether the High Court had erred in setting aside the order of the Commercial Court and thus, rejecting the application under Order VII Rule 11 of the CPC filed by LNG Express.
While examining the extant IP statutory framework in India and evaluating the interpretative standards adopted across jurisdictions, SC observed that copyright in India is governed by the Copyright Act, which was enacted to safeguard the proprietary rights of authors, including for commercial exploitation, and to encourage the creation of original works. Analysing the definitions of 'copyright' under Section 14 of the Copyright Act and 'design' under Section 2(d) of the Designs Act, SC noted that although the language of these provisions is distinct, a narrow zone of overlap exists wherein a 'design' shares features with artistic works such as paintings or drawings that may initially be entitled to copyright protection. SC pointed out that Section 15 of the Copyright Act explicitly provides that copyright shall not subsist in any design which is registered under the Designs Act. Further, Section 15(2) of the Copyright Act clarifies that where a design is capable of being registered under the Designs Act but is not registered, the copyright in such design shall cease as soon as the design is applied to any article and reproduced more than fifty times through an industrial process, whether by the proprietor or any person licensed by him. Therefore, it noted that certain designs may be eligible for copyright protection at the outset, but they may lose such protection upon industrial application, and conversely, some artistic works may not qualify for continued protection once they cross the industrial threshold. SC noted that this overlap creates a statutory tension due to the express embargo on long-term copyright protection for designs.
SC further undertook an analysis of established jurisprudence and comparative legal frameworks adopted by courts in India, the United States of America, and other jurisdictions, and examined guiding principles under international treaties such as the Paris Convention for the Protection of Industrial Property, 1883, Berne Convention for the Protection of Literary and Artistic Works, 1886, and Trade Related Aspects of Intellectual Property Rights, 1995. It observed that while these instruments have played a significant role in shaping IP law globally, they do not specifically address the overlap between copyright and design protection and instead permit each jurisdiction to devise its own legal standards.
SC observed that an original artistic work, which initially enjoys copyright protection, does not forfeit such protection merely because a 'design' derived from it has been industrially applied to create a product. While the term 'artistic work' under the Copyright Act encompasses a broad ambit, a 'design' under the Designs Act is confined to specific visual features namely, shape, configuration, pattern, ornamentation, or composition of lines or colours when applied to an article through an industrial process resulting in a product appealing to the eye. SC further clarified that the absence of artistic character under the Copyright Act does not automatically entitle a work to protection under the Designs Act; as such protection is not automatic and must satisfy statutory conditions.
In this regard, SC underscored the consistent application of the 'functional utility' test by Indian and foreign courts to assess the eligibility of a work for protection under the Designs Act. Accordingly, a two-pronged test was formulated by SC to resolve interpretative uncertainties under Section 15(2) of the Copyright Act: (i) whether the work in question is purely an 'artistic work' entitled to copyright protection, or whether it is a 'design' derived from such work and applied through an industrial process, thus, attracting the limitation under Section 15(2) of the Copyright Act; and (ii) if it does not qualify for copyright protection, whether the work's dominant purpose assessed through the test of functional utility warrants protection under the Designs Act. SC held that the application of this test requires a case specific analysis, followed by statutory interpretation, binding precedents, and comparative jurisprudence, to ensure that the Copyright Act and Designs Act operate in a mutually exclusive and coherent manner.
While adjudicating the second issue, SC concurred with the High Court's view that the Commercial Court had erroneously allowed LNG Express' application under Order VII Rule 11 of the CPC on the assumption that the 'Proprietary Engineering Drawings' qualified as a 'design' under Section 2(d) of the Designs Act, thereby ousting the copyright claim. SC affirmed that the said application could not have been allowed at the threshold stage. It distinguished between Section 15(1) of the Copyright Act, which excludes copyright where a design is registered, and Section 15(2) of the Copyright Act, which requires a factual inquiry into whether the subject matter falls within the scope of the Designs Act. SC held that such an inquiry cannot be resolved on a mere reading of the plaint, and the issue namely whether the drawings constitute 'artistic works' under Section 2(c) of the Copyright Act or 'designs' under Section 2(d) of the Designs Act, demands a detailed and factual examination.
Relying on the decision in Microfibres Inc v. Girdhar and Co.2, SC reaffirmed that 'artistic work' has a broader ambit and may serve as a precursor to a design. A design derived from such a work may initially enjoy copyright protection, which ceases upon industrial application beyond the threshold laid down in Section 15(2) of the Copyright Act. SC clarified that the fact that a drawing is not categorised as an original artistic work does not automatically confer it protection under the Designs Act. Rather, its dominant feature must be assessed whether it is functional or aesthetic and whether the design meets the registrability criteria under the Designs Act, i.e., the finished product, when industrially applied, must have visual appeal rather than being purely utilitarian. SC noted that the determination of whether the 'Proprietary Engineering Drawings', despite being artistic works under Section 2(c) of the Copyright Act, lose copyright protection by virtue of industrial application, constitutes a mixed question of law and fact.
On the scope of Order VII Rule 11(a), SC held that a plaint can only be rejected if it discloses no cause of action, which must be determined solely on the basis of the averments in the plaint. SC emphasised that complex legal issues cannot be adjudicated at the preliminary stage, and as Inox had specifically claimed copyright in the drawings, associated literary work, and know-how, the plaint could not have been rejected. Even a weak or doubtful case which raises triable issues must proceed to trial. Moreover, legal defences raised in the written statement cannot form the basis for rejection under Order VII Rule 11, as that would amount to pre-judging the matter.
SC also noted that the Suit raised additional claims relating to literary work, confidential information, and know-how. Even if the copyright claim were ultimately held untenable, the Suit would remain maintainable on these other grounds. Since a plaint cannot be rejected in part, the entire Suit was required to proceed to trial.
Accordingly, SC upheld the High Court's reasoning and reaffirmed that the question of whether the original artistic work falls within the meaning of 'design' under the Designs Act cannot be conclusively determined at the preliminary stage. It noted that the ascertainment of the true nature of the 'Proprietary Engineering Drawings' involved a mixed question of law and fact, and the Commercial Court had erred in casually assessing the averments in the plaint to dispose off the matter. It held that the Commercial Court had misread the plaint, misapplied legal principles, and failed to appreciate the distinction between 'artistic work' and 'design'.
SC dismissed the appeals and upheld the High Court's decision of rejecting the application under Order VII Rule 11 of the CPC. SC directed the Commercial Court to decide pending interim injunction application filed by Inox within two months; and instructed it to conduct the trial and determine the true nature of the 'Proprietary Engineering Drawings' by applying the test laid down in paragraph 60 of the present judgment, along with adjudicating other related IP infringement claims, within a period of one year, keeping in view the judicial time already expended.
While laying down a two-pronged approach to resolve interpretative uncertainties under Section 15(2) of the Copyright Act, SC also decisively clarified that intricate legal issues particularly those involving mixed questions of law and fact cannot be adjudicated under an application preferred under Order VII Rule 11(a) of the CPC, as such issues demand a full-fledged trial. SC further reaffirmed that a plaint may be rejected under Order VII Rule 11(a) only if it discloses no cause of action whatsoever, but the plaint cannot be rejected merely because the case appears weak or legally contestable. In our view, this judgment brings much-needed clarity to the interplay between copyright and design protection under Indian intellectual property law.
Footnotes
1 2025 INSC 483
2 2009 SCC Online Del 1647
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
