There have been quite a few patent infringement cases in the auto sector and the one involving Bajaj Auto and TVS makes a perfect case study for auto companies as well as legal professionals. However, to the relief of all stakeholders, Bajaj Auto and TVS Motor have finally settled the matter amicably out-of-court. It was a 12-year old case that had witnessed a bitter legal battle between the two companies.
The case dates back to 2007 when Bajaj filed a patent infringement case against TVS, alleging that the company has copied its patented DTSi technology. Bajaj said that TVS was using DTSi technology for its 125cc Flame motorcycle. TVS on its part filed a counter case seeking dismissal of the case filed by Bajaj. TVS also filed a defamation suit against Bajaj claiming damages worth Rs 250 crore.
The case went on for years and was pending before Bombay High Court, Madras High Court, and Intellectual Property Appellate Board (IPAB), Chennai. Some cases were also filed internationally and were pending in courts in Sri Lanka and Mexico.
It may be recalled that Bajaj had developed the DTSi engine in-house. It turned out to be a profitable innovation, as bikes based on DTSi such as Pulsar emerged as bestsellers. Unlike standard motorcycle engines that use a single spark plug, DTSi (Digital Twin Spark Ignition) utilizes twin spark plugs. This allows for more efficient combustion, thereby improving both power output and fuel efficiency. The theory had existed on paper, but nobody had tried it for a two-wheeler before Bajaj.
Responding to Bajaj’s claim of patent infringement, TVS had said that the engine used for its Flame motorcycle was developed in collaboration with Austria based AVL, a leading engine research institute. The company said that its engine had three valves, which was different from that of Bajaj that had two valves. However, Bajaj rejected this claim saying that the third valve was inconsequential, as it did not play any role in enhancing engine quality.
Putting an end to the dispute, both companies have notified stock exchanges to inform shareholders, customers and all other stakeholders. In the press release issued by both companies, it has been stated that the decade old dispute has been closed on October 31 via a “Settlement Agreement”. Both companies have agreed to withdraw all cases and absolve each other of all penalties and compensation. The press release also mentions that the settlement will have no impact on the financial position of the two companies.
Industry experts say that the change in stance of the two companies could have been due to BS-VI norms that will come into play from April 2020. As DTSi tech may become obsolete after BS-VI implementation, there is no use fighting over rights to an old technology.