The Shape of Goodwill – The Crocs Judgment By Delhi High Court, Backed By The Supreme Court
by Gautam Panchal (Partner Associate) and Priyanka Prabhakar (Partner Associate)
The Division Bench of the Delhi High Court delivered a landmark ruling in the Crocs litigation, tackling a key question in Indian intellectual property law: can a passing-off action be pursued for a product’s shape even when that shape is protected as a registered design under the Designs Act. Confusion had arisen due to conflicting interpretations, particularly after the Single Judge’s decision that rejected Crocs’ suits at the outset. The Division Bench overturned that view, clarifying that passing off is a common-law remedy that operates independently of statutory design registration.
The dispute originated when Crocs filed several passing-off suits against footwear manufacturers such as Bata, Liberty, Aqualite, Action Shoes, Relaxo, and Bioworld, alleging that these companies were selling clogs visually similar to Crocs’ iconic design. The Single Judge dismissed these suits without examining interim injunction requests and without permitting factual inquiry. This dismissal was based on the view that when a product’s shape is registered as a design, the plaintiff cannot maintain a passing-off action concerning that shape.
The Single Judge claimed to rely upon the five-judge Bench decision in Carlsberg Breweries v. Som Distilleries. However, the Division Bench would later clarify that the Single Judge misapplied Carlsberg. The Single Judge read the decision to suggest that a design registration extinguishes the remedy of passing off for the same shape, a conclusion that fundamentally misinterpreted the ratio of Carlsberg.
The Division Bench began by revisiting the true holding of Carlsberg. It clarified that the five-judge Bench was called upon to decide only one narrow question: whether a composite suit combining causes for design infringement and passing off could be maintained. Carlsberg held that such composite suits are indeed maintainable. It did not, however, hold that passing off is unavailable simply because the subject matter is also a registered design.
With this correction in place, the Division Bench proceeded to reaffirm that passing off is a common-law remedy that arises from goodwill, consumer association, and misrepresentation. The Designs Act does not provide, expressly or impliedly, that design registration eliminates or prohibits an action in passing off. Therefore, the two rights can coexist.
The Court observed that a product’s shape can serve dual roles. It may qualify as a design under the Designs Act for its visual features and simultaneously function as trade dress if consumers associate that shape with a particular commercial source. These two legal protections operate in different spheres: designs safeguard novelty and aesthetic appeal, while passing off safeguards commercial goodwill and consumer identification.
An essential part of the Division Bench’s reasoning was that even if maintainability were in question, the Single Judge still could not dismiss the suits at the threshold. Whether the Crocs design had acquired distinctiveness, whether consumers connected the shape to Crocs, and whether the defendants’ products resulted in misrepresentation were all factual questions requiring evidence. None of these issues could be resolved without a full trial.
Consequently, the Division Bench held that the plaint disclosed a complete cause of action. It highlighted that passingoff actions ecessarily require evaluation of evidence regarding market reputation, consumer perception, and deceptive similarity. The Single Judge’s approach, therefore, prematurely terminated the suits before these factual elements could be considered.
The Court emphasised that permitting such dismissals at the outset would not only prejudice the plaintiff but also distort the functioning of intellectual property law, whereby a defendant could replicate an iconic shape and avoid accountability merely because the plaintiff had once registered the design. This approach would encourage copying immediately after design expiry, defeating the purpose of passing off and the protection of accumulated goodwill.
The Division Bench therefore restored all Crocs suits and directed that they resume from the stage at which they had been improperly dismissed. This reinstatement was critical because it ensured that the suits would continue on merits, allowing Crocs to attempt to demonstrate reputation, secondary meaning, and misrepresentation.
The judgment carries far-reaching implications beyond Crocs. It clarifies that Indian intellectual property law recognises the coexistence of different forms of rights in the same subject matter. Just as copyright and design rights may overlap in certain contexts, and trademarks may overlap with passing off, so too can design protection and trade dress protection coexist simultaneously.
This doctrinal clarity is particularly important in industries where shape is central to branding, such as footwear, furniture, packaging, beverages, and consumer products. A rigid approach barring passing off whenever a design is registered would undermine brand building and remove an important avenue of protection for product configurations.
The Division Bench’s analysis brings Indian jurisprudence in line with international intellectual property norms. With this clarification, India now embraces a layered system of protection comparable to these global practices.
By affirming the independent character of passing off, the judgment also provides practical guidance to litigants. Plaintiffs must establish the traditional trinity of goodwill, misrepresentation, and damage, while defendants must challenge these elements on their merits rather than relying on the simplistic assertion that design registration bars passing-off claims.
The importance of the Crocs decision was further elevated when the Supreme Court of India endorsed the Division Bench’s position on 14 November 2025. The Apex Court’s affirmation reinforces the distinction between novelty-driven design protection and goodwill-driven passing-off rights. It recognises that design rights are time-bound and hinge on newness, whereas passing-off protection endures as long as goodwill persists. Courts must therefore assess whether a shape functions as an indicator of origin, irrespective of its design registration history.
Overall, the Crocs ruling of the Delhi High Court, now upheld by the Supreme Court fortifies the protection of product identity and promotes healthy competition. It deters opportunistic copying, encourages investment in brand reputation, and safeguards consumers from confusion caused by lookalike products that exploit the goodwill of established manufacturers.
