TVS, Bajaj settle patent dispute out of court

In 2007, TVS Motor Company launched its 125CC bike ‘Flame’, powered with a lean burn internal combustion engine with a twin spark plug configuration. Following this, Bajaj Auto filed an infringement suit against TVS and applied for an interim injunction during the pendency of the suit.

By:Published: November 1, 2019 7:32:21 AM

A decade-old legal dispute between two-wheeler arch rivals TVS Motor Company and Bajaj Auto has finally been settled, out of the court. TVS Motor Company has announced that it has entered into an agreement on Thursday with its competitor Bajaj Auto to amicably settle the long-drawn dispute relating to alleged infringement of Bajaj’s patent No 195904 (on twin spark technology), defamation suit filed by the company against Bajaj Auto and other related proceedings filed against each other, which were pending before the Madras High Court, Bombay High Court, Intellectual Property Appellate Board (IPAB), Chennai and courts in Sri Lanka and Mexico. In a communication, TVS Motor said that both itself and Bajaj Auto have mutually agreed to withdraw the pending proceedings and release each other from all liabilities, claims, demands and actions in respect of the pending proceedings.

None of them are required to pay any compensation or penalty to the other as part of the said settlement. There will be no impact on financial position of the company due to the settlement agreement, TVS added. Both the companies had been locked in a patent dispute over the use of twin spark plug engine technologies, where Bajaj Auto had claimed that it holds a patent on it. The technology-enabled spark plugs were to help fuel burning more efficiently, leading to greater mileage. Bajaj Auto had got the patent for its twin spark technology way back
in 2005.

In 2007, TVS Motor Company launched its 125CC bike ‘Flame’, powered with a lean burn internal combustion engine with a twin spark plug configuration. Following this, Bajaj Auto filed an infringement suit against TVS and applied for an interim injunction during the pendency of the suit. The Madras High Court then granted interim injunction because Bajaj had a prima facie case, the balance of convenience weighed in its favour. Considering the fact that Bajaj was in the market and its patent was for a limited period and it was in a crucial stage of development, the court then pointed out that TVS could not be permitted to interfere with Bajaj’s business, especially as TVS was a strong competitor to Bajaj. TVS Motor filed an application challenging the continuance of the interim injunction against it after six months.

After hearing the parties and analysing the facts of the case, the court then discontinued the interim injunction granted against TVS. The court compared the technologies used by Bajaj and TVS in the light of patents based on which such technologies have been implemented by the companies and held that the technologies were prima facie different from each other. The court then said that while Bajaj’s technology sparked the ignition with twin plugs in a four stroke engine of a single cylinder with two valves in order to produce improved internal combustion in a lean burn mixture, it pointed out that TVS’ technology licensed from AVL Austria was valve centric as the two intake valves provided for combined air fuel mixture of swirl and tumble action, with a separate exhaust valve in an internal combustion engine of single cylinder with four stroke with the aid of twin plug provision.

The court further pointed out that the technologies differed in the number of valves and positioning of the spark plugs. As both the technologies were patented in India, the court observed that they were prima facie valid and deserve equal protection. Alongside, TVS Motor also filed a suit against Bajaj Auto in Bombay High Court in 2007, alleging defamation by Bajaj Auto. Concurrently, TVS also moved the IPAB to revoke the patent granted to Bajaj Auto. Meanwhile, Bajaj Auto had filed a Special Leave Petition (SLP) before the Supreme Court in January 2008. SC set aside the division bench’s order and permitted sale of TVS’ Flame bikes booked until January 18, 2008. However, no further bookings were to be received by TVS until January 28, 2008. Also, SC directed the single judge of Madras HC to take up hearing of interim applications from January 29, 2008.

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