Summary
Crocs Inc. USA ("Crocs") and M/S Bata India Ltd. ("Bata") were locked in a footwear design dispute before the Delhi High Court that began in 2014 and outlasted an interim injunction, two appeals, and a Supreme Court order. The core dispute concerned Crocs' registered design for footwear, which the Deputy Controller of Patents & Designs later cancelled for lacking novelty and originality under the Designs Act. Once the suit was disposed of as infructuous following that cancellation, Bata sought actual litigation costs rather than a token sum. The Delhi High Court agreed, awarding design cancellation costs of over Rs. 24 lakh, applying the Supreme Court's guidance that costs must realistically follow the event in commercial disputes. The ruling reinforces that design owners who lose on novelty grounds cannot treat prolonged commercial litigation as cost-free.
Background
When a registered design is cancelled years into an infringement suit, who pays the design cancellation costs of the decade spent fighting it? The Delhi High Court answered that question in a costs order that closes a footwear design dispute stretching back more than ten years.
Crocs Inc. USA (“Crocs”) had sued M/S Bata India Ltd. (“Bata”) and others in 2014, alleging that Bata’s footwear imitated its registered design no. 197685. The suit began before the district court at Tis Hazari, where an ex-parte ad-interim injunction was granted and Local Commissioners seized substantial quantities of allegedly infringing footwear from Bata’s premises. Once the matter reached the Delhi High Court as a commercial dispute, the interim injunction was vacated on February 8, 2018: a Single Judge found the design was not novel and had existed in the public domain before Crocs’ registration. Along with vacating the injunction, the Court awarded actual costs to Bata under the Code of Civil Procedure, 1908 (“CPC”) provisions applicable to commercial disputes. The Division Bench upheld this order on January 24, 2019, and the Supreme Court, while disposing of the special leave petition in Crocs Inc. USA v. M/s Liberty Shoes Ltd. & Anr. on September 23, 2019, made the costs conditional on the final outcome of the suit. Separately, on May 9, 2019, the Deputy Controller of Patents & Designs cancelled Crocs’ design registration on a petition filed by an unrelated third party, holding it lacked novelty and had been previously published. With the design cancelled, the Delhi High Court disposed of the infringement suit as infructuous in July 2023, while keeping open Crocs’ right to revive proceedings if its appeal against the cancellation succeeded. Bata then applied for actual costs under the CPC, leading to the present order.
Issues
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- Whether cancellation of Crocs’ registered design under Section 19 of the Designs Act, 2000 (“Designs Act”), on the ground that the design lacked novelty and originality under Section 2(g) and Section 4, extinguished the basis for the pending infringement suit.
- Whether Bata was entitled to actual costs under Section 35 and Section 35A of the CPC despite the Supreme Court’s earlier order making costs conditional on final adjudication.
- Whether the “costs follow the event” principle governing commercial disputes required the Court to award costs at the amount actually incurred, rather than a nominal sum.
Crocs’ Arguments
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- Did not dispute the quantum of Rs. 24,63,400 claimed by Bata as actual costs, supported by a bill of costs and affidavit.
- Argued that any determination of costs should be made without prejudice to the connected, still-pending suit concerning the shape trademark and passing-off claim over the same footwear design.
- Submitted that it had appealed the Deputy Controller’s cancellation order, keeping alive the possibility that its registered design could be restored.
Bata’s Arguments
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- Relied on Section 35 and Section 35A of the CPC, and the principle recognized in Uflex Ltd. v. Government of Tamil Nadu & Ors. (2021 INSC 492), that costs must follow the event in commercial litigation and be quantified at actual expense rather than a token amount.
- Pointed to the design cancellation order dated May 9, 2019, in which the Deputy Controller of Patents & Designs held the design was neither new nor original under Section 2(g) of the Designs Act, and had been published prior to registration.
- Highlighted that the interim injunction had already been vacated in 2018 on identical findings of lack of novelty, a conclusion affirmed by the Division Bench and left undisturbed by the Supreme Court.
- Filed a detailed bill of costs of Rs. 24,63,400 covering fees, court expenses, and litigation costs incurred since 2014, examined by the Registry against Chapter XXIII of the Delhi High Court Original Side Rules, 2018.
Court’s Analysis
On the survival of the suit after cancellation, the court noted that the design’s term had itself expired and that the Deputy Controller of Patents & Designs had separately cancelled the registration for lack of novelty and prior publication. The court observed that once the design stood cancelled on the ground that it was neither new nor original, the suit for design infringement had lost its foundation, since infringement can only be alleged on the strength of a valid, subsisting registration. The court reasoned that the earlier disposal of the suit as infructuous had, however, left a limited window open: if Crocs succeeded in its appeal against cancellation and the design were restored, the question of reviving the suit could be revisited. Because that appeal remained pending, the disposal of the suit, though final in form, had not foreclosed every right of the parties.
Turning to costs, the court held that in commercial disputes, costs must ordinarily follow the event, and awarding only nominal costs undermines the very purpose behind the Commercial Courts Act, 2015 and the amended costs regime under the CPC. The court found that the reasoning in Uflex Ltd. v. Government of Tamil Nadu & Ors. squarely applied: parties who litigate strategic commercial disputes must bear the consequences of success or failure, and courts should not shy away from awarding realistic costs out of misplaced concern that costs reflect adversely on counsel. The court further observed that design cancellation costs in this case were not merely academic, since the litigation had run from 2014 through the district court, the High Court, the Division Bench, and the Supreme Court, with Local Commissioners seized of goods along the way, imposing real and quantifiable expense on Bata.
On quantification, the court stated that the absence of any explicit costs direction in the July 2023 order disposing of the suit could not, by itself, be treated as a waiver of the right to claim costs, particularly where the disposal had expressly kept remedies open pending the cancellation appeal. The court noted that the Registry’s note on the components of a bill of costs, drawn from Chapter XXIII Rule 5 of the Delhi High Court Original Side Rules, 2018, confirmed that advocate’s fees, incidental litigation expenses, and delay attributable to a party’s conduct could all be factored into the final figure. The court opined that since Crocs did not dispute the Rs. 24,63,400 figure placed on record by Bata, and since the design cancellation costs claimed corresponded to actual, vouched expenditure rather than an inflated estimate, the amount could be awarded in full. The court clarified that this determination would operate without prejudice to the connected suit on the shape trademark and passing-off claim, preserving both parties’ rights in that separate proceeding.
Findings
In view of the observations and the arguments presented by both the parties, the Delhi High Court held that:
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- The infringement suit could not survive once the registered design stood cancelled by the Deputy Controller of Patents & Designs for lack of novelty and prior publication under the Designs Act.
- Non-mention of costs in the July 2023 disposal order did not amount to a waiver of the right to claim costs, since the disposal had expressly preserved remedies pending the cancellation appeal.
- Actual costs, not nominal costs, must follow the event in commercial litigation, applying the principle recognized in Uflex Ltd. v. Government of Tamil Nadu & Ors..
- Crocs Inc. USA was directed to pay Bata India Ltd. actual costs of Rs. 24,63,400 within three months.
- The determination of costs was made without prejudice to the connected suit concerning the shape trademark and passing-off claim, keeping those rights open.
- The connected execution petition, Ex. P. 64/2022, would stand disposed of upon payment of the costs
Case Citation:Crocs Inc. USA v. M/S Bata India Ltd. & Ors., CS(COMM) 625/2018, I.A. 25948/2023, Delhi High Court, decided on July 2, 2026. Available at http://indiankanoon.org/doc/112881824/.
Authored by Gaurav Mishra, IP Attorney, BananaIP Counsels