IP in a booming textile industry

Rishu Srivastava and Vikrant Rana of SS Rana & Co assess the role of IP regulations in India’s increasingly influential textile industry

The prominence of fashion in our image conscious world, and the socially imperative and accepted flamboyant culture it has created makes it an indispensible aspect of today’s modern life. With the inception and advent of globalisation the textile industry has apparently moved from a mere product to a well characterised and categorised brand. As an integral component of world trade, the fashion industry thrives on huge investments and constant improvement and innovation. These original creative expressions and the intellectual capital are not only the drivers of competitive advantage but also are the fountainheads of invaluable IP assets in the apparel and textile industry. It is thus vital for all business entities to identify and protect their intangible assets to prevent their unauthorised appropriations.

Why register a design?

The function of apparel has graduated from a social, cultural and utilitarian role, to aesthetics and expressions of art. Design has become a bulwark of any successful marketable entity and besides the functionality , it is the luxurious aesthetic feature of apparel that has championed a brand and determines commercial success of the product. The very fact that the clothing industry invests huge sums to come up with new and original designs each season makes design registration as integral a part of the fashion industry as it is of any other business venture. It is more than required in the fashion world as blatant infringement of novel creations are often defended on the grounds of homage, inspiration and dedication. It is the IP rights that recognize and harness individual creativity and unless the incentive of monopoly right is guaranteed, the designers can neither be stimulated to create nor can they actually be rewarded for their creation.

 

Design or copyright?

The protection accorded by copyright and designs are overlapping in nature and their interaction have been discussed in several disputes, including the much debated Rajesh Masrani vs Tahiliani Design and Microfibres vs Girdhar and Co. While the articles falling under the purview of artistic work and design are clearly delineated in The Copyright Act, 1957 and in the Design Act, 2000, it is Section 15 of The Copyright Act that needs to be mentioned here. That section provides for special provisions stating that copyright shall not subsist in any design which is registered or capable of being registered under The Design Act. Another important parameter of this provision is that copyright in the design shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright or with his licence by any other person. This clause stymies the inherent protection accorded by copyright that a person enjoys merely by virtue of creation. However it is the same clause that was used to its advantage by Tahiliani Design in the famous Rajesh Masrani vs Tahiliani Design case where the latter succeeded in getting an injunction on the ground that the subject matter of the suit belonged to the couture line and not more than twenty or possibly fewer copies were made of any single costume. Though the case may lead to fewer designers actually filing designs, it should be remembered that in order to claim damages it is essential to get the design registered. The Tahiliani brand  itself  stands  among  the  top  filers  in  the country (in class 02-02) having filed more than 40 designs in the last 10 years.

Nevertheless, the aforesaid section tends to distinguish purely artistic works and work that has commercial overtones. It was also clarified in the Microfibres vs Girdhar and Co, where the judge stated that “what cannot be lost sight of is the very object with which such arrangements or works had been made. The object is to put them to industrial use. An industrial process has to be done to apply the work or configuration to the textile. It is not something which has to be framed and put on the wall or would have any utility by itself. The two important aspects are the object with which it is made (which is industrial) and its inability to stand by itself as a piece of art”.

A failure to register a creation capable of being registered as a design may result in loss of both copyright and design. Furthermore, it can be interpreted that while the artistic work of the apparel, textile and fabric including prints, arrangement of patterns and design are copyrightable material, the haute-couture and custom-designed apparel is to be registered under The Design Act. Moreover, in the case of infringement proceedings, little respite is offered by copyright.

 

Table 1: Top registrants in class 02-02 (for garments)

 

Source: Patent and Design Journals

 

Graph 2: Total designs in class 2 compared with Indian and foreign designs in class 2

 

It  is  the  design  rights  that  provide  for  much stronger  protection.  Section  22  of  The  Design Act   states   that   in   the   case   of   piracy   of   a registered  design,  the  infringer  shall  be  liable to pay the registered proprietor of the design a sum      not      exceeding      Rs25,000      ($451) recoverable as a contract debt; if the proprietor elects   to   bring   a   suit   for   the   recovery   of damages  for  any  contravention  of  the  rights conferred to him and for an injunction against repetition of it, damages may be awarded and the person may be restrained by injunction.

 

Registration under The Design Act

The  preliminary  condition  for  the  registration of  a  design  is  its  novelty  and  originality.  The design       should       also       be       significantly distinguishable  from  known  designs  or  their combination,     and     should     not     comprise scandalous  or  obscene  matter.  The  protection extends  to   features  of   shape,   configuration, pattern,   ornament,   composition   of   lines   or colour,  and  is  given  for  a  period  of  10  years which  can  further  be  renewed  to  another  five years.  The  third  schedule  of  the  Design  Act provides for registration of articles of clothing and  haberdashery  in  class  2  and  textile  piece goods,  artificial  and  natural  sheet  material  in class 5.

The design registration system in India is time bound and the fastest of all IP registration procedures. Moreover, in view of the resources invested in creating a new design, the registration procedure is economical and cost effective. Once registered the proprietor enjoys monopoly and exclusive rights not only against copies of the protected design, but also against substantially similar products.

 

Textile industry and trends

 The   magnanimous   presence   of   the   Indian textile  industry  and  the  fundamental  role  it plays    in    the    country’s    economy,    can    be deciphered  from  statistics  showing  that  not only does it provide for the basic necessities of life,    but    also    contributes    about    14%    to industrial  output,  4%  to  the  GDP,  17%  to  the export  earnings  and  accounts  for  nearly  12% share  of  the  country’s  total  exports  basket.  As per  the  study  conducted  by  Assocham,  one  of India’s   apex   trade   associations,   the   Indian designer    wear    market    is    growing    at    a compounded  annual  growth  rate  (CAGR)  of about 40%. India’s share in the global designer wear industry is a minimal 0.32% but is likely to reach about 1.7% by 2020.

 

Table  2:  Top  registrants  in  class  05-05 [for textile fabrics]

Source: Patent and Design Journals

 

India’s   textiles   products,   including handlooms  and  handicrafts,  are  exported  to more     than     a     hundred     countries.     The association  of textile  industry with  agriculture and the ancient culture in India, along with the country’s  traditions,  make  the  Indian  textiles sector  unique  in  comparison  with  the  textiles industry of other countries. It has the capacity to  produce  a  variety  of  products  suitable  for the different market segments, both within and outside    the    country.    It    provides    direct employment to over 35 million people in India, making   it   the   second   largest   provider   of employment  after   agriculture.   In   the   global market exports of clothing, India ranked as the sixth largest exporter and in the global exports of  textiles,  India  ranked  as  the  third  largest exporter,  trailing  only  the  EU  and  China  (as per 2010 WTO data).

These promising figures are, however, belittled  when  compared  with  the  number  of design registrations in the textile sector in last 10  years.  Of  the  approximately  41323  design registrations since 2002 only 2001 designs are registered  in  class  2  (4.8%  of  the  registered designs). It is pertinent to mention here that of these   2001   designs   only   218   are   registered under  garments  (class  02-02).  The  maximum design  (1562)  in  this  class  is  registered  under the  category  of  footwear,  socks  and  stockings. With  over  45  registrations  in  the  category  of garments Tahilani Design is probably the only fashion entity which is among the top filers in the country.

Similarly in class 5, 1623 designs have been registered so far making only 3.92% of the  total  registered  designs.  Here  again  only 1506  designs  pertain  to  textile  fabrics  (class 05-05).

It  is  also  interesting  to  note  that  both in    class    5    and    class    2    the    majority    of applications  that  are  registered  in  the  last  ten years  originated  in  India.  The  trend  is  also reflected in graph 2 and graph 3.

Regulations a must

The corporatisation of designer wear, the organised retail and mall culture, and change in preference from unbranded to branded clothes, are all responsible for the transition that the Indian textile and fashion design industry has undergone in recent years The holistic protection of IP rights has therefore assumed more significance than ever. Now that the Indian fashion industry is internationally acclaimed with Indian designers getting global recognition, IP and more specifically design registration, has become imperative as only it can enable the entity to explore new markets through licensing, franchising, joint ventures and contractual agreements. The growing designer wear industry is hugely weighed down by plagiarism, design piracy, cheap knock-offs and misappropriation of rights. Regulations are therefore required to curtail and minimise the unauthorised appropriation and use of artistic work in the fashion industry. The creativity and intellectual capital driving the fashion industry will wane unless IP assets are strategically managed, which would not only aid in the commercialisation of new products, but would also reduce the risk of infringing the IP rights of others.

 

Indian textiles sector unique in comparison with the textiles industry of other countries

 

Vikrant Rana

Vikrant Rana is the managing partner of SS Rana & Co. He is a registered patent agent and an advocate-on-record with the Supreme Court of India. For over a decade, he has been providing practical legal advice to many Fortune 500 companies and some of the world’s most esteemed corporations, on securing, protecting, enforcing and exploiting their IP assets in India and abroad. He is actively involved in promoting awareness on IP rights in India and is a frequent speaker and panelist in seminars and conferences by organisations such as WIPO, NIIPM, TIFAC, FICCI, MSSI, CII, TERI, IIM

Ahmedabad, and BHU.

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