Delhi High Court Reinforces Award of Actual Costs in Commercial IP Litigation After Cancellation of Registered Design

In Crocs Inc. USA v. Bata India Ltd. & Ors., the Delhi High Court directed the Plaintiff to pay ₹24,63,400 towards the Defendants’ actual litigation costs after the design infringement suit was disposed of following cancellation of the Plaintiff’s registered design. This article examines the facts, legal issues, and findings of the Court in this significant commercial litigation costs decision.

Summary

In Crocs Inc. USA v. Bata India Ltd. & Ors., CS(COMM) 625/2018, the Delhi High Court directed the Plaintiff to pay ₹24,63,400 towards the Defendants’ actual litigation costs after the design infringement suit was disposed of following cancellation of the Plaintiff’s registered design.

The Court reiterated that, in commercial disputes, costs ordinarily follow the event, subject to the Court’s discretion, particularly where the successful party has incurred substantial litigation expenses over prolonged proceedings.

Relying on the Supreme Court’s decision in Uflex Ltd. v. Government of Tamil Nadu, the Court reiterated that the following provisions provide the statutory and procedural framework for awarding realistic costs in appropriate commercial disputes:

• Sections 35 and 35A of the Code of Civil Procedure, 1908
• The Commercial Courts Act, 2015
• Chapter XXIII of the Delhi High Court (Original Side) Rules, 2018

The Court accordingly directed the Plaintiff to pay the Defendants ₹24,63,400, being the actual costs claimed by them and not disputed by the Plaintiff.

Facts of the Case

Crocs Inc. instituted a suit against Bata India Ltd. and other Defendants alleging infringement of its registered design bearing Registration No. 197685 relating to footwear. The Plaintiff contended that the Defendants had adopted an obvious and fraudulent imitation of its registered design and sought permanent injunction, damages and other consequential reliefs.

Along with the suit, the Plaintiff obtained an ex parte ad interim injunction and appointment of Local Commissioners, pursuant to which substantial quantities of the Defendants’ products were seized.

The Defendants contested the suit by challenging the validity of the registered design and asserting that the impugned design lacked novelty and had been previously published.

The interim injunction was subsequently vacated by the Delhi High Court, which held that the Plaintiff’s design was not novel and that the relevant footwear design had previously existed in the public domain. The order was affirmed by the Division Bench, and the Supreme Court subsequently disposed of the challenge while directing that the award of costs would remain subject to the final outcome of the suit.

During the pendency of the proceedings, the Deputy Controller of Patents and Designs, by order dated 9 May 2019, cancelled the Plaintiff’s registered design on the ground that the design lacked novelty and originality. By 2023, the term of the design had also come to an end.

Consequently, the Court observed that the substratum of the design infringement suit had ceased to exist and disposed of the suit.

Thereafter, the Defendants filed an application under Sections 35 and 35A read with Section 151 of the Code of Civil Procedure, 1908, seeking recovery of their actual litigation costs.

Issue before the Court

Whether the Defendants were entitled to recover their actual litigation costs under Sections 35 and 35A read with Section 151 of the Code of Civil Procedure, 1908, following disposal of the design infringement suit, and whether the actual costs claimed were liable to be awarded under the applicable commercial litigation framework.

Findings of the Court

The Court observed that the Defendants had contested the litigation through multiple stages, including:

• Proceedings before the District Court
• Proceedings before the Delhi High Court
• Proceedings before the Division Bench
• Proceedings before the Supreme Court
• Defending against an interim injunction and the seizure of their goods

It further noted that the Plaintiff’s registered design had ultimately been cancelled for lack of novelty, thereby rendering the substratum of the design infringement suit non-existent.

Relying extensively upon the Supreme Court’s judgment in Uflex Ltd. v. Government of Tamil Nadu, the Court reiterated that commercial disputes are governed by the principle that costs should ordinarily follow the event and that successful litigants should receive adequate indemnity for expenses genuinely incurred in litigation, subject to the Court’s discretion.

Statutory and Procedural Framework

The Court referred to the following statutory and procedural provisions:

• Sections 35 and 35A of the Code of Civil Procedure, 1908
• The Commercial Courts Act, 2015
• Chapter XXIII of the Delhi High Court (Original Side) Rules, 2018

In particular, Chapter XXIII Rule 5 provides for the contents of a bill of costs, including:

• Court fees
• Process fees
• Reasonable expenses of witnesses
• Advocates’ fees
• Other litigation expenses

Costs Regime in Commercial Litigation

The Court emphasised that the costs regime in commercial litigation seeks to ensure that successful parties are adequately compensated for the expenditure incurred in litigation and also serves to discourage vexatious, frivolous and speculative proceedings.

At the same time, the award of costs remains subject to judicial discretion and the circumstances of each case.

The Court also noted that separate proceedings concerning the Plaintiff’s shape trademark and passing off claims remained pending, and that the costs determination in the present proceedings was without prejudice to those claims.

Held

The Delhi High Court allowed the Defendants’ application for costs and directed the Plaintiff to pay ₹24,63,400 towards the Defendants’ actual litigation costs within three months.

The Court noted that the amount had been presented by the Defendants in a chart of costs supported by documents and that the amount was not disputed by the Plaintiff.

Accordingly, following the principles laid down in Uflex Ltd. and bearing in mind Sections 35 and 35A of the CPC, the Commercial Courts Act, 2015 and Chapter XXIII Rule 5 of the Delhi High Court (Original Side) Rules, 2018, the Court awarded the said amount as costs.

The Court further directed that, upon payment of the awarded amount, the pending execution proceedings relating to the earlier award of costs, being Ex. P.64/2022 titled M/s Bata India Ltd. v. M/s Crocs Inc USA, would stand disposed of.

Conclusion

The judgment reinforces the modern approach towards costs in commercial litigation by recognising that successful litigants should, subject to the applicable statutory framework and judicial discretion, receive adequate indemnity for litigation expenses reasonably incurred.

It reiterates that commercial disputes, particularly those involving intellectual property rights, require parties to carefully evaluate the strength of their claims and the potential costs of prolonged litigation.

By following the Supreme Court’s decision in Uflex, the Delhi High Court has further reinforced the principle that realistic costs form an important component of effective commercial justice, serving both compensatory and deterrent functions while discouraging vexatious, frivolous and speculative litigation.

The decision is particularly significant because the Court awarded ₹24,63,400 in actual costs after considering the prolonged history of the litigation, the multiple stages at which the Defendants were required to defend the proceedings, and the eventual cancellation of the registered design forming the basis of the suit.

At the same time, the decision should be understood in the context of the specific facts and procedural history of the case, and not as an automatic rule that actual costs will be awarded in every unsuccessful commercial or intellectual property proceeding.

Last Updated on 11 August, 2026