“The Suit Discloses Triable Issues and Cannot Be Rejected at the Threshold”: Supreme Court Lays Down Twin Test to Resolve Copyright–Design Conflict Under Section 15(2)
Kiran Raj
The Supreme Court Division Bench of Justice Surya Kant and Justice Nongmeikapam Kotiswar Singh held that the High Court did not err in setting aside the Commercial Court’s order allowing an application under Order VII Rule 11 of the Code of Civil Procedure, 1908. The Court directed restoration of the original suit instituted for copyright infringement and permitted it to proceed to trial. It recorded that the issues raised in the plaint required adjudication and could not be summarily dismissed. The Court delineated the scope of Section 15(2) of the Copyright Act, 1957 in relation to the Designs Act, 2000 and prescribed a two-pronged test to determine the appropriate statutory framework applicable to such claims
The dispute arose when Inox India Limited filed a commercial suit before the Commercial Court against Cryogas Equipment Private Limited, LNG Express India Private Limited, and others, alleging infringement of its intellectual property rights. The primary grievance concerned two distinct categories of copyright: (i) Proprietary Engineering Drawings created by Inox for cryogenic semi-trailers, and (ii) Literary Works comprising textual content, including design narratives, test procedures, and descriptions authored by Inox engineers during the creation of the drawings.
Inox claimed that these works were specifically developed for Indian road conditions and formed an integral part of the design and manufacturing of cryogenic semi-trailers. The suit, filed under Section 62(2) of the Copyright Act, 1957, sought various reliefs including a declaration of copyright infringement, permanent injunctions restraining reproduction or use of the said works, destruction of infringing materials, and damages to the tune of ₹2 crores.
In addition to the main suit, Inox filed an application under Order XXXIX Rules 1 and 2 of the CPC seeking an interim injunction. LNG Express filed an application under Order VII Rule 11 of the CPC, seeking rejection of the plaint on the ground that the Proprietary Engineering Drawings were capable of registration under the Designs Act, 2000, and therefore attracted the bar under Section 15(2) of the Copyright Act. It argued that Inox had failed to register its designs and had surpassed the threshold of fifty reproductions by an industrial process, which disentitled it from copyright protection.
The Commercial Court initially allowed the Order VII Rule 11 application on 01.04.2022, rejecting the plaint and the interim injunction. This order was challenged before the High Court. On 13.03.2024, the High Court set aside the Commercial Court’s order, observing that the application was decided without properly analysing the complex questions of law and fact involved. The High Court restored the suit and directed that interim applications be heard independently.
On remand, the Commercial Court, by its order dated 03.05.2024, again allowed LNG Express’s application and rejected Inox’s plaint. Inox again approached the High Court, which by the impugned judgment, set aside the Commercial Court’s order and reinstated the suit, the injunction application, and the necessity for full adjudication. The Commercial Court was directed to decide the pending applications independently and as expeditiously as possible.
Senior Counsel for LNG Express, Mr. Shyam Divan, argued before the Supreme Court that the drawings in question were “designs” under Section 2(d) of the Designs Act, and hence the suit was barred under Section 15(2) of the Copyright Act. It was further submitted that Inox had produced over fifty units, and its revenue of ₹122 crores indicated mass industrial application. He contended that registration under the Designs Act was mandatory and the Copyright Act could not be invoked to claim protection for these drawings.
Inox, represented by Senior Advocates Mr. Chander M. Lall and Mr. J. Sai Deepak, contended that the drawings pertained to internal components of cryogenic containers and lacked the visual appeal required for a "design" under the Designs Act. They submitted that the Proprietary Engineering Drawings fell within the definition of “artistic work” under Section 2(c) of the Copyright Act and were not registrable under the Designs Act. They also argued that their claim included separate heads of IP—artistic works, literary works, and confidential information—each deserving independent legal scrutiny.
They contended that the Commercial Court failed to appreciate that the claims raised mixed questions of law and fact. They further pointed out that Order VII Rule 11 CPC only permits rejection of a plaint if it does not disclose a cause of action. According to their argument, the existence of triable issues—such as the nature of the drawings, scope of registration, and misappropriation of know-how—necessitated a full trial.
The Local Commissioner’s report dated 26.09.2018 was cited by Inox, which recorded the seizure of several documents from the premises of Cryogas and LNG Express, including inspection reports, test plans, and drawing calculations bearing Inox’s proprietary markings.
The Supreme Court noted that the issue involved a fundamental disagreement over whether the drawings were “designs” or “artistic works.” It was not in dispute that the drawings had been used in the manufacture of cryogenic semi-trailers. However, the question of whether these works retained copyright protection under the Copyright Act or fell within the exclusive domain of the Designs Act was central to the maintainability of the suit.
The Supreme Court therefore proceeded to determine whether the plaint disclosed a cause of action sufficient to withstand scrutiny under Order VII Rule 11 of the CPC and whether the Commercial Court was justified in rejecting the suit without a trial.
The Court noted that the primary issue before it was whether the High Court erred in setting aside the Commercial Court’s order allowing the application under Order VII Rule 11 of the Code of Civil Procedure. The Supreme Court identified two key issues for determination:
- the parameters to decide whether a work falls within Section 15(2) of the Copyright Act, and
- the propriety of the High Court’s interference with the Commercial Court's decision.
The Court observed that the case presented a complex legal scenario involving an overlap between copyright and design law. It recorded: “We may clarify at the very outset that the discussion herein would be limited to determining the distinction between a ‘design’ under the Designs Act and an ‘artistic work’ that might warrant copyright protection.” It further stated that the examination was necessary due to the absence of clear guidance on this overlap in prior precedents.
The Court outlined a two-pronged test to determine the applicability of Section 15(2) of the Copyright Act:
- First, whether the work in question is purely an ‘artistic work’ entitled to protection under the Copyright Act or a ‘design’ derived from such work and subjected to industrial application.
- Second, whether the dominant purpose of the work is functional, requiring application of the test of 'functional utility' to determine if it qualifies for protection under the Designs Act.
It elaborated: “The expression ‘artistic work’ under Section 2(c) of the Copyright Act has a very wide connotation... Such a reproduction may also involve depicting a three-dimension work of a two-dimensional work or vice versa.” However, if such a work is reproduced through an industrial process and results in a visually appealing product, it would constitute a ‘design’ under Section 2(d) of the Designs Act.
The Court recorded that legislative intent sought to harmonise the Copyright Act and the Designs Act by distinguishing between artistic protection and commercial exploitation. It noted: “While an ‘artistic work’ qualifies for copyright protection, its commercial or industrial application… is subject to the limitations set out in Section 15(2).”
The Court discussed that copyright in a drawing ceases when the article to which the design has been applied is reproduced more than fifty times by an industrial process. It cited previous decisions, including Microfibres, Mattel, and TTK Prestige, and highlighted the Delhi High Court’s view that even if a drawing is an artistic work, its reproduction beyond this threshold mandates design registration for continued protection.
The Court acknowledged that visual appeal and functional utility were determinative factors. It referred to comparative jurisprudence, noting the conceptual separability test used in U.S. law to distinguish between artistic and functional components.
On the second issue, the Court assessed whether the plaint disclosed a cause of action. It noted that the rejection under Order VII Rule 11 CPC requires the court to see if the plaint, as filed, discloses a cause of action, without engaging in an elaborate examination of law or evidence. It stated: “The allegations, if taken as true, must indicate a cause of action. The fact that the case may be weak or unlikely to succeed is not a valid reason for rejection.”
The Court concluded that the Commercial Court had not applied the correct legal standard. It observed that the High Court had rightly found that the plaint disclosed triable issues. The presence of additional claims regarding literary works and confidential information further precluded partial rejection of the plaint. It recorded: “Even if the claim for copyright infringement is deemed untenable, the suit would still be maintainable on other grounds.”
The Court also recorded its intention to clarify and harmonise the treatment of overlapping IP claims. It stated: “Our analysis and examination have hopefully resolved this legal issue to prevent any further ambiguity in the future.”
The Supreme Court dismissed the appeals and upheld the judgment of the High Court. It recorded that the questions raised in the suit filed by Inox India Limited involved triable issues and required full adjudication. Accordingly, the Court issued the following binding directions:
The Court held that the decision of the High Court rejecting the application under Order VII Rule 11 of the Code of Civil Procedure was upheld. It directed that the Commercial Court shall deliver its decision on the pending application seeking interim injunction filed by Inox under Order XXXIX Rules 1 and 2 of the CPC within a period of two months. The Court further directed that the Commercial Court shall conduct the trial and discern the true nature of the Proprietary Engineering Drawings based on the legal test laid down in paragraph 60 of the judgment, and also assess the related claims of infringement of literary works, confidential information, and know-how.
The trial was directed to be completed within a period of one year, considering the judicial time already consumed by the interlocutory applications. The Court made it clear that the findings in the judgment were confined to the scope of adjudicating the application under Order VII Rule 11 and were not intended to influence the trial on merits.
Pending applications, if any, stood disposed of in the above terms.
Advocates Representing the Parties
For the Petitioners: Mr. Shyam Divan, Mr. Rahul Chitnis, Mr. Hersh Desai, Ms. Shwetal Shepal, Mr. Aditya Khanna, Mr. Chander Shekhar Ashri
For the Respondents: Mr. Chander M. Lall, Mr. J. Sai Deepak, Ms. Smriti Yadav, Mr. Nirupam Lodha, Mr. Dhiren Karania, Mr. Kshitij Parashar, Mr. Gautam Wadhwa, Ms. Ananya Mehan, Mr. R. Abhishek, M/s. Khaitan & Co.
Case Title: LNG Express India Pvt. Ltd. & Others v. Inox India Limited & Another
Neutral Citation: 2025 INSC 483
Case Number: Special Leave Petition (C) No. 28062 of 2024
Bench: Justice Surya Kant and Justice Nongmeikapam Kotiswar Singh
[Read/Download order]
