Introduction

This Bulletin examines the 'Bajaj Auto Ltd. vs. TVS Motors case which is currently
pending in the Madras High Court. It examines the circumstances in which the orders oI the
Single Bench and the Division Bench came to be passed. It Iinally analyzes the order and the
directions passed by the Supreme Court and how it may impact the IPR litigation pending in
the various courts in the country.

The 'Bajaj Auto TVS Motors patent controversy erupted when Bajaj Auto Ltd. ('Bajaj)
sought and was granted an interlocutory injunction by the Madras High Court on February
16, 2008 restraining TVS Motor Co. Ltd. ('TVS) Irom launching their 125 cc motorcycle
under the trademark 'Flame. This stirred up the Indian two-wheeler industry; with the two
parties being Iierce competitors locked in a battle over the market share, and caught
widespread media attention. TVS lodged an appeal beIore the Division Bench, and on May
18, 2009 the order oI the Single Bench was overturned. Bajaj preIerred an appeal beIore the
Supreme Court, which while broadly aIIirming the decision oI the Division Bench, vide its
decision dated September 16, 2009 directed that TVS shall be entitled to sell its motorcycle
Flame,` subject to an accurate record oI all its domestic and international sales being
maintained, and directed the Madras High Court to appoint a receiver Ior this purpose.







,cts of the c,se
On July 7, 2005, Bajaj was granted a patent1 with a priority date oI July 16, 2002. The
Title oI the patent application was 'An improved Internal Combustion Engine working on
Iour stroke principle. The invention was called 'DTS-i Technology and it related to the use
oI 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. Per Bajaj, this
placement oI the spark plugs enabled a better control over the ignition timing and lesser time
was taken Ior the Ilame to travel during the process oI combustion. The novelty also lay in
the use oI a sleeve to protect the spark plug which prevented exposure oI the plugs to the
lubricating oil.

In 2003, Bajaj launched 'Pulsar, a motorcycle which employed the DTS-i Technology in
respect oI which the patent was then pending. In the Iirst eight months oI that Iinancial year
itselI, Bajaj manuIactured and marketed 814,393 two-wheelers with the 'DTS-i Technology
out oI a total oI 1,501,241 two wheelers were sold by it, which amounted to 54.25 oI its
total sales.

In 2007, TVS announced the launch oI a 125 cc motorcycle under the trademark 'Flame
which was to be powered by lean burn internal combustion engine oI bore size 54.5 mm with
a twin spark plug conIiguration just like Bajaj. TVS also stated that on September 1 & 3,
2007, Bajaj had issued certain groundless threats to dissuade TVS Irom launching 'Flame.
Hence in October 2007, TVS Iiled a suit under section 105 & 106 oI the Act in the Madras
High Court, alleging that the statements made by Bajaj on September 1 & 3, 2007 constituted
groundless threats, and sought the intervention oI the court to restrain Bajaj Irom interIering
with the launch oI 'Flame. Further, TVS also Iiled an application Ior the revocation oI
Bajaj`s patent beIore the Indian Patents Appellate Board under section 64 oI the India Patents
Act, 1970 ('Act).

Upon the announcement by TVS, Bajaj Iiled a suit Ior permanent injunction under section
108 oI the Act in the Madras High Court to restrain TVS Irom using the internal combustion
technology patented by Bajaj and Irom employing the same in marketing 2/3 wheelers,
including TVS`s proposed 125-cc 'Flame motorcycle.




!rinciples for the gr,nt of ,n interlocutory injunction
The principles Ior the grant oI an interlocutory injunction may be summarized as Iollows:
(i) That the plaintiII must establish that it has a prima Iacie case, that its patent is valid
and that its rights have been inIringed;
(ii) that the balance oI convenience is in Iavor oI the plaintiII;
(iii) that the plaintiII would suIIer irreparable loss and injury, iI the interlocutory
injunction, as sought, is not granted.

Order of the Single Bench of the M,dr,s High Court

Vide its Order dated February 16, 2008, the Madras High Court restrained TVS Irom
launching the proposed 125-cc Flame motorcycle with the twin spark plug engine
technology, as Bajaj prima Iacie enjoyed the right oI exclusive usage oI the patent, granted to
it by the Patent OIIice. The Madras High Court held that Bajaj had succeeded in establishing
a prima Iacie case Ior the grant oI an injunction, and while granting the injunction was
pleased to observe:
'.. SuIIice it to say now at this stage, prima Iacie there is novelty which means an invention
and the same has been registered under the Patents Act. novelty has been on the Iace oI it
proved by the applicant by marketing the product to such a large extent and also without
objection Iairly Ior long.

Wh,t constitutes ~, prim, f,cie c,se for the gr,nt of ,n injunction
For an invention to be patentable, it must satisIy the triple tests oI novelty, non-
obviousness and be capable oI industrial application and exploitation. While considering the
Iacts oI the case, the court Iound that the invention satisIied the triple tests and was
patentable.
The court was oI the view that, upon the amendment oI the Act in May, 2003, when a
patentee Iiles a suit Ior inIringement based on the patent granted to him, the patent should be
prima Iacie presumed to be valid, until the same is revoked or set aside under any oI the
grounds set out in the Act or in any other manner. The court was oI the view that prior to the
amendment, the patentee was conIerred an exclusive right to use himselI, through agents or
licensees and also to exercise or sell or distribute the inventions in India. However, aIter the
amendment, the patentee enjoys an exclusive right to prevent third parties Irom using or
selling, or oIIering Ior sale etc.
On the question whether Bajaj`s invention involved an inventive step, the court was satisIied
that the invention involved a technical advance as compared to the existing knowledge and
that it had economic signiIicance. The court was prima Iacie satisIied that the invention had
Iound a special place in the Indian market and had established a signiIicant market share.
The court Iound that even though Pulsar had been introduced in the market in 2003, TVS had
Ior the Iirst 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. The Single
Judge Iound that the petition Ior revocation oI a patent granted to Bajaj had been Iiled a mere
six days prior to the launch oI Flame, and as such the conduct oI TVS was not entirely bona
Iide. The court was oI the view that till such time, TVS succeeded in its petition Ior
revocation, the patent granted to Bajaj could not be viewed with suspicion, considering that it
had been in existence Ior more than Iive years and as such the patentee Bajaj must be treated
as an actual user and the presumption oI the validity oI its patent was thus established.
On the above basis, the court recorded its satisIaction that Bajaj had succeeded in establishing
a prima Iacie case Ior the grant oI an injunction. The court also recorded that having
exploited the patent Ior Iive years, the patentee had a Iurther period oI IiIteen years to exploit
the patent, and hence the balance oI convenience was also in its Iavour. Accordingly, the
Madras High Court granted an interlocutory injunction in Iavour oI Bajaj.

Order of the Division Bench in Appe,l
Aggrieved by the Order oI the Single Judge, TVS preIerred an appeal beIore the Division
Bench oI the Madras High Court. The appellate bench oI the Madras High Court held that
Bajaj had not succeeded in establishing a 'prima Iacie case oI inIringement in respect oI its
patented twin spark technology. The Division Bench observed that having regard to the
nature oI operation oI the DTS-i engine by virtue oI twin spark plugs and that oI TVS by
virtue oI receipt oI air Iuel mixture through two diIIerent intake valves, their points oI
emphasis diIIered considerably, notwithstanding the use oI twin spark plug in both the
technologies. The Division Bench Iurther observed that the operation oI the invention as
claimed by the Bajaj appears to be plug centric and that oI TVS was valve centric, and on
scrutiny oI the claim as set out in the Iinal complete speciIication it held that it Iound it
diIIicult to countenance Bajaj`s claim that the TVS's product speciIication inIringed Bajaj`s
patented right. Accordingly, the Division Bench set aside the order oI the single bench.

Order of the Supreme Court
Aggrieved by the Order oI the Division Bench, Bajaj preIerred an appeal beIore the
Supreme Court. The Supreme Court, while prima Iacie agreeing with the order oI the
Division Bench, ordered that although TVS shall be entitled to sell its motorcycle Flame,`
but it shall maintain an accurate record oI its entire domestic and international sale and
directed the Madras High Court to appoint a receiver in this connection. In its interim order,
the Supreme Court reiterated that in matters relating to trademarks, copyright and patents, the
provisions oI the Code oI Civil Procedure which mandate that civil disputes should be heard
on a day to day basis without any adjournments, except in circumstances beyond the control
oI the parties. It also directed that the Iinal judgment should be given normally within Iour
months Irom the date oI the Iiling oI the suit. The Supreme Court directed that the timeline
stipulated above be adhered to 'punctually and IaithIully by all courts and tribunals in the
country.

Conclusion
The most salutary eIIect oI this case has been the guidelines passed by the Supreme Court
directing that once the hearing oI the suit has commenced, it shall be continued Irom day-to-
day until all the witnesses in attendance have been examined, unless Ior exceptional reasons,
an adjournment oI the hearing beyond the Iollowing day is necessary. Only circumstances
which are beyond the control oI the parties would justiIy such an adjournment. The direction
oI the Supreme Court, seeks to enIorce a provision2 under which, an adjournment on the
ground that the pleader oI a party is engaged in another court, shall not constitute a ground
Ior an adjournment. This cause oI adjournments is the biggest bane and obstacle in
overcoming judicial delays, and iI these guidelines are actually implemented by the courts
and tribunal below, all IPR cases would have to be decided on a priority basis. This augurs
well Ior the holder oI IP rights in India and should be a heartening note Ior the international
community while aIIording an opportunity Ior the restoration oI Iaith in Indian judiciary.













ASSSIuNNENT
CN

%he B,j,j Auto Ltd
Vs
%VS Motors Ltd

!,tent controversy

5ubmitted to 5ubmitted by
, San[eev S ,a|age kAnUL kU,Ak
CC I,S Dept ,I, (20102012)
NII1 8anga|oe Date 12]09]11






Acknowledgement

I hereby want to pass on my sincere thanks to Mr. Sanjeev S malage sir Ior his incessant
support regarding this assignment on Patent controversy. Without his guidance it would have
been very diIIicult Ior me to handle this assignment with so much eIIectiveness & eIIiciency.

I would like to thank my class mates Ior their continuous intellectual & emotional support.
Also I would like to thank all the Iaculty members oI FMS. Last but not the least; I would
like to thank my Iamily members Ior being there always no matter what the conditions are.


















Bibliogr,phy

1 hLLp//splcylplndlablogspoLcom/2008/01/ba[a[LvspaLenLdlspuLelndlaplugglnghLml
2 hLLp//wwwpsalegalcom/pdf/l81echnology8ulleLlnlssuexll01082010101630AMpdf
3 hLLp//newsonelndlaln/2009/09/17/ba[a[caseLvswlnsbackrlghLLosellflamehLml
4 hLLp//wwwlpprolnccom/admln/uploads/aLenL_lnfrlngemenL_and_LlLlgLlon_ln_lndla_37
pdf






























%,ble of Contents

Sr No

%opics !,ge No


Introduction


,cts ,bout the c,se


!rinciples


Order of the single bench
5

Order of the division bench
6

Order of the Supreme Court 5
7

Conclusion 5















ASSSIuNNENT
CN

!,tent of
G,rment !rotector
By
G,brieel,!resp,lcios

5ubmitted to 5ubmitted by
, San[eev S ,a|age kAnUL kU,Ak
CC I,S Dept ,I, (20102012)
NII1 8anga|oe Date 12]09]11






Acknowledgement

I hereby want to pass on my sincere thanks to Mr. Sanjeev S malage sir Ior his incessant
support regarding this assignment on Patent. Without his guidance it would have been very
diIIicult Ior me to handle this assignment with so much eIIectiveness & eIIiciency.

I would like to thank my class mates Ior their continuous intellectual & emotional support.
Also I would like to thank all the Iaculty members oI FMS. Last but not the least; I would
like to thank my Iamily members Ior being there always no matter what the conditions are.