Bajaj Auto – TVS Motors

Patent Controversy
Introduction
Chronology
February 16, 2008
Bajaj sought and was granted an interlocutory
injunction by the Madras High Court on restraining
TVS Motor Co. Ltd. (“TVS”) from launching their 125
cc motorcycle under the trademark “Flame”
May 18, 2009
TVS lodged an appeal before the Division Bench and
the order of the Single Bench was overturned
September 16, 2009
Bajaj appealed before the Supreme Court, which
directed that TVS shall be entitled to sell its
motorcycle ‘Flame’
But TVS has to maintain an accurate record of all its
domestic and international sales
Directed the Madras High Court to appoint a receiver
for this purpose.
Facts of the case
DTS-i Technology
On July 7, 2005, Bajaj was granted a patent with a
priority date of July 16, 2002
The title of the patent application was “An improved
Internal Combustion Engine working on four stroke
principle”
Use of twin spark plugs located diametrically opposite
to each other in a small displacement engine with the
cylinder bore diameter ranging between 45 mm to 70
mm
Pulsar
In 2003, Bajaj launched “Pulsar,” a motorcycle which
employed the DTS-i Technology in respect of which
the patent was then pending
In the first eight months of that financial year itself,
Bajaj manufactured and marketed 814,393 two-
wheelers with the “DTS-i Technology”
Flame
In 2007, TVS announced the launch of a 125 cc
motorcycle under the trademark “Flame”
Powered by lean burn internal combustion engine of
bore size 54.5 mm with a twin spark plug
configuration just like Bajaj
TVS Suit
TVS stated that on September 1 & 3, 2007, Bajaj had
issued certain groundless threats to dissuade TVS from
launching “Flame”
In October 2007, TVS filed a suit under section 105 &
106 of the Act in the Madras High Court, alleging
constituted groundless threats, and sought the
intervention of the court to restrain Bajaj from
interfering with the launch of “Flame”
Further, TVS also filed an application for the revocation
of Bajaj’s patent before the Indian Patents Appellate
Board under section 64 of the India Patents Act, 1970
Bajaj Suit
Bajaj filed a suit for permanent injunction under
section 108 of the Act in the Madras High Court
Restrain TVS from using the internal combustion
technology patented by Bajaj and from employing the
same in marketing 2/3 wheelers, including TVS’s
proposed 125-cc “Flame” motorcycle
Analysis
Principles for the grant of an interlocutory
injunction
That the plaintiff must establish that it has a prima
facie case, that its patent is valid and that its rights
have been infringed
That the balance of convenience is in favor of the
plaintiff
That the plaintiff would suffer irreparable loss and
injury, if the interlocutory injunction, as sought, is not
granted
Single Bench of the Madras High Court
Date: February 16, 2008
Ruling: Restrained TVS from launching the proposed
125-cc Flame motorcycle
Reason:
Bajaj prima facie enjoyed the right of exclusive usage of
the patent, granted to it by the Patent Office.
The Madras High Court held that Bajaj had succeeded in
establishing a prima facie case for the grant of an
injunction
Single Bench of the Madras High Court
Pulsar had been introduced in the market in 2003, TVS had for
the first time raised an objection only on August 24, 2007, by
which time Bajaj’s DTS-i technology based product had been
sold in large numbers across the country
Single Judge found that the petition for revocation of a patent
granted to Bajaj had been filed a mere six days prior to the launch
of Flame, and as such the conduct of TVS was not entirely bona
fide
The patent granted to Bajaj could not be viewed with suspicion,
considering that it had been in existence for more than five years
and as such the patentee Bajaj must be treated as an actual user
and the presumption of the validity of its patent was thus
established
Division Bench
Nature of operation of the DTS-i engine by virtue of
twin spark plugs and that of TVS by virtue of receipt
of air fuel mixture through two different intake valves,
their points of emphasis differed considerably
The operation of the invention as claimed by the Bajaj
appears to be plug centric and that of TVS was valve
centric
Supreme Court
Reiterated that in matters relating to trademarks,
copyright and patents, the provisions of the Code of
Civil Procedure which mandate that civil disputes
should be heard on a day to day basis without any
adjournments
Final judgment should be given normally within four
months from the date of the filing of the suit
Thank You!!!
“the company lost about Rs 120 crore in sales because
of the delay in launching the Flame”
Mr Venu Srinivasan,
MD, TVS