It appears there is some confusion regarding the interpretation of Section 22 of the Designs Act, 2000, which deals with piracy of registered designs and reliefs available to the owner of a registered design. Specifically, there seems to be some doubt with respect to the maximum value of damages that the owner of a registered design may claim in a suit for design infringement. One school of thought is of the opinion that Section 22(2) and the first proviso thereunder limits/caps damages that a design owner may seek in a suit to INR 50,000/-. Is this truly the case?
A clear reading of each of the sub-clauses of Section 22(2) reveals the following:
1) The provision provides two options/reliefs to a registered design owner in the event of infringement of a design. The first relief is where the design owner may recover a maximum of INR 25,000/-.from the infringer for “every contravention” in the form of a contract debt
2) The second relief is one which permits the owner of the design to institute a suit for damages and permanent injunction against the infringer
3) It is to be noted that the reliefs are disjunctive in nature which means the owner of the design has to elect between the two
4) Critically, what is to be noted is that the limit/cap of INR 50,000/- for “every design” prescribed in the first proviso is restricted to the first relief and does not apply to the second relief. Simply put, there is no pecuniary limit whatsoever on damages that a registered design owner may seek should he opt to institute a suit for damages and injunction under the second relief
If this is the case, how does one interpret the first relief and the first proviso together? Based on a combined reading of Section 22(2)(a) and the first proviso, it follows that when the design owner opts for the first relief by way of a contract debt, although, he is entitled to recover maximum of INR 25,000/- from the infringer “for every contravention”, it is to be noted that he may recover a maximum of INR 50,000/- for infringement of a design regardless of the number of contraventions with respect to the design. In other words, under the first relief, the statutorily prescribed limit is INR 50,000/- for infringement of a single design regardless of the number of contraventions. Therefore, if in the same infringing act, the infringer violates multiple design registrations of the same design owner, the owner is entitled to recover a maximum of INR 50,000/- for each of the designs.
However, this raises a few more questions. Since the first relief does not provide for an injunctive relief, does it mean that after the recovery of a maximum of INR 50,000/- for infringement of every design, the design owner does not have the right to recover more money in the event of a subsequent infringement? If yes, where is the incentive for the design owner to opt for the first relief if it does not act as a deterrent to the infringer? Importantly, if with respect to a first cause of action the design owner opts for the first relief, is he barred from instituting a suit for damages for a subsequent cause of action/infringement by the same infringer?
I look forward to comments and corrections from the readers.