Copyright in Industrially Applied Design Ceases Beyond 50 Reproductions Unless Registered Under Designs Act: Supreme Court

“Artistic Works Do Not Automatically Become Designs—But Once Applied Industrially, They Must Pass the Test of Functional Utility”: In a judgment of far-reaching consequence for intellectual property law in India, the Supreme Court in Cryogas Equipment Pvt. Ltd. and LNG Express India Pvt. Ltd. v. Inox India Ltd. has definitively resolved a long-standing legal conundrum surrounding the overlap between copyright and design law. The Court ruled that once an unregistered design—capable of registration under the Designs Act—is applied industrially and reproduced more than fifty times, the copyright in that design ceases, as per Section 15(2) of the Copyright Act, 1957.

“The legislative intent is to harmonise the two statutes so that while an ‘artistic work’ qualifies for copyright protection, its commercial or industrial application—i.e., the ‘design’ derived from the original work—is subject to the limitations set out in Section 15(2) of the Copyright Act,” observed Justice Surya Kant, authoring the decision.

Origin of the Dispute: Engineering Drawings or Industrial Designs?

The dispute arose when Inox India Ltd. filed a commercial suit before the Vadodara court alleging that Cryogas and LNG Express had infringed its intellectual property rights in the form of proprietary engineering drawings and accompanying technical documentation (referred to as “literary work”). These engineering schematics were used in the design and manufacture of LNG Semi-trailers.

Inox sought a declaration of copyright, a permanent injunction, damages of ₹2 crore, and destruction of infringing materials. Cryogas and LNG Express, in response, filed an application under Order VII Rule 11 CPC arguing that the suit was barred by Section 15(2) of the Copyright Act because the drawings constituted ‘designs’ under the Designs Act and were being used in an industrial process.

The Commercial Court accepted the objection and dismissed Inox’s suit. However, the Gujarat High Court reversed that decision and reinstated the suit, which then came up in appeal before the Supreme Court.

“We deem it pertinent to outline our own definitive parameters that align with our existing IP rights framework,” the Court said, after engaging in a thorough analysis of Indian precedents, comparative U.S. law, and international conventions.

According to the Court, the correct approach to resolve such disputes must involve a “two-pronged test.” First, the court must assess whether the impugned work is a purely artistic creation or whether it constitutes a “design” applied to an article through an industrial process. If the latter, it must then pass the second prong—whether the primary characteristic of the work is “functional utility rather than aesthetic appeal.”

“It thus seems that the intent of producing an original artistic work is not determinative of its protection under the Copyright or Designs regime,” said the Court. “Rather, the legislative intent is to draw a clear line—while the original artistic work enjoys copyright, the design derived from it loses such protection when applied industrially beyond fifty times.”

The Court referred to earlier decisions like Microfibres Inc. v. Girdhar and Mattel Inc. v. Jayant Agarwalla, reaffirming that artistic works may become industrial designs once their utility eclipses their aesthetic purpose.

The Court underscored that the “test of functional utility” must guide future decisions in such matters. “If the primary purpose of the work is utility—regardless of whether it may also be aesthetically pleasing—it ceases to be a copyrightable artistic work once applied more than fifty times via industrial process.”

Quoting from the English House of Lords’ decision in AMP v. Utilux, the Court reiterated that “there must be a blend of industrial efficiency with visual appeal… If the shape is not there to appeal to the eye but solely to make the article work, then this provision excludes it from the statutory protection.”

On the procedural issue, the Court held that the Commercial Court erred in rejecting the plaint under Order VII Rule 11 CPC without a full trial. “The question whether a work qualifies as a design under the Designs Act or remains an artistic work under the Copyright Act involves a mixed question of law and fact,” it held.

“A cause of action cannot be dismissed on the mere presumption that the plaintiff has applied a work to more than fifty products without examining the factual matrix in detail,” the Court stated, rejecting the appellant’s claim that the suit was an abuse of process.

It also clarified that separate claims for infringement of “literary works” and “confidential information” included in the plaint cannot be automatically dismissed just because the engineering drawings may be classifiable as designs.

The Court concluded by expressing hope that this ruling would eliminate ambiguity in future IP disputes: “Our analysis and examination have hopefully resolved this legal issue to prevent any further ambiguity in the future.”

It praised the efforts of High Courts that have developed jurisprudence consistent with international best practices and emphasized that moving forward, all courts should apply the two-pronged test established in this case.

Date of Decision: April 15, 2025