DAMODARAM SANJIVAYYA

NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE:
BAJAJ VS TVS

SUBJECT:
ECONOMICS I

NAME OF THE FACULTY:

PROFESSOR ABHISHEK SINHA

Name of the Candidate

RAJ KARAN SHARMA
Roll No: 21LLB143
Semester 2

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 ACKNOWLEDGMENT

I owe a huge debt of gratitude to my project supervisor, Dr. Abhishek Sinha, who has
supervised this study from the start and whose knowledge and insights have greatly aided me in
writing this project. Working under him has been a wonderful experience for me.

I’d like to express my gratitude to the academic department and library of DAMODARAM
SANJIVAYYA NATIONAL LAW UNIVERSITY for their unwavering support and
availability of resources and books, without which it would have been difficult to accomplish my
project within the deadline.

I’d want to thank my parents and classmates for their support, as well as their ideas and
perspectives, which aided me in moving on with my project.

RAJ KARAN SHARMA

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 TABLE OF CONTENTS

S. No. TOPIC Page No.

1. ABSTRACT 4

2. SYNOPSIS 5

3. INTRODUCTION 6

4. HISTORICAL BACKGROUND 7

5. CASE STUDY 9

6. JUDGEMENT AND ANALYSIS 12

7. CONCLUSION 19

8. BIBLIOGRAPHY 20

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 ABSTRACT
The case of Bajaj vs. TVS Motors is a dispute over the unlawful use of the DTSi patent. The
plaintiff's DTSi technology, which was utilised in this lawsuit by Bajaj Auto, was a ground
breaking development. It has been granted a patent for the same. It is commonly utilised by the
Plaintiff's Pulsar motorcycle, which is a well-known two-wheeler and three-wheeler
manufacturer in India. The case is critical in terms of not just the parties' financial stakes, but
also the application of the theory of pith and marrow test. This project examines a case study of
the same, including facts, arguments, judgement, and analysis.

This is one of the rare patent cases in India where the Concept of Equivalents, often known as
the doctrine of pith and marrow, has been considered. Above all, the concepts that guide the
decision-making process are very important.

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 SYNOPSIS

OBJECTIVE:
The objective of the study is to trace the history of parties involved in the lawsuit and analyse the
outcomes of the proceedings of the case revolving around the DTSi technology.

SIGNIFICANCE OF THE STUDY:

This study will help the reader to understand the historical background, origin of both the
companies, issues raised by both the parties, and application of some landmark doctrines such as
pith and marrow.

SCOPE OF THE STUDY:

The scope of this project is limited to the analysis, interpretation and discussion of case study
revolving around the DTSi technology.

LITERATURE REVIEW:
The researcher used various primary and secondary sources of data like books, journals, websites
and articles.

RESEARCH METHODOLOGY:
The researcher has used the doctrinal method of study and complemented it with the explanatory
method to substantiate and explain the answers.

MODE OF CITATION:
OSCOLA, 4th edition.

RESEARCH QUESTION:
1. Whether Bajaj patented the technology way before TVS?
2. Whether TVS was using a different technology stack?
3. Whether the innovation is patentable?

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 INTRODUCTION
Bajaj and TVS are the big names in the Indian Automobile sector especially in the two-wheeler
segment. Both the companies have been catering to the needs of the Indian consumers. Since
both the companies are competitors of each other there remains a pretty good chance of disputes.
In this project will be covering one such dispute in greater depth. The lawsuit revolves on the
defendant's patent infringement and the resulting damages. However, the case also raises the
question of whether the threats made by the defendant in the same instance were justified. In
2007, the case was filed in the Madras High Court. The plaintiffs (Bajaj Auto Ltd) and the state
of Maharashtra accused the defendants (T.V.S. Motor Company Ltd.) of infringing on their
patents, which relate to the innovation of enhanced internal combustion innovation.

“The plaintiffs are seeking a permanent injunction to stop the defendants from: 

1. using the technology or invention described in the plaintiffs' patents; and 

2. Preventing them from marketing, selling or exporting 2/3 wheelers (including the proposed
125cc TVS FLAME) that contain the disputed internal combustion engine or product that
infringe the patent. They also claim damages for infringement of the patent.”1
The case was still ongoing. Until then, the plaintiffs filed a petition in the same court seeking a
temporary restraining order against the defendant for the same remedy sought in the permanent
injunction complaint. The application was submitted to avoid patent infringement while the
lawsuit was pending. “The defendants in the case filed a lawsuit in court to stop the plaintiffs
from releasing threats that they are infringing on the defendants' patent via different means,
preventing the plaintiffs from launching their product.”2 The case was still ongoing in court.
Meanwhile, the defendants filed a motion to prohibit them from making threats and thereby
interfering with the introduction of their goods while the case is continuing. In light of the terms
of the Patents Act of 1970, the case study focuses on the substantive part of the case.
Furthermore, the research contains a number of tests developed by the Supreme Court in the
case. The case is significant because, in a recent judgement by the Hon'ble Supreme Court, the
emphasis was placed on the prompt disposal of the interim injunction and an order to the Madras
High Court to do so.

1
Patents Act 1970, s 108.
2
Patents Act 1970, s 106.

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 HISTORICAL BACKGROUND

BAJAJ AUTO LTD:

It is one of India's 10 leading firms by market capitalization and one of the top 5 by yearly
turnover.

It began as a trade firm in 1945 and was established in 1946. It acquired scooters and three-
wheelers from Italy and marketed them in India from 1948 to 1959. In 1959, it was granted a
manufacturing licence, and in 1960, it formed a technological partnership with Piaggio of Italy.

Scooter manufacturing began in 1961. In 1962, three-wheeler manufacture began. Its partnership
with Piaggio ended in 1971, and the company's scooters and three-wheelers have been marketed
under the "Bajaj" brand name since then.

Maharashtra Scooters Ltd. was created in 1975 under the "Horizontal transfer of technology"
strategy, with the company owning 24 percent of the stock and the Maharashtra State
Government's Western Maharashtra Development Corp. owning 27 percent. Satara, Maharashtra,
is where the manufacturing facilities are situated. This aided in the expansion of industrial
capabilities. The unit continues to build scooters from the Company's CKDs. These scooters are
sold via the Company's distribution system and under the brand name of the Company.

In 1984, the company opened its second factory in Aurangabad, Maharashtra. Scooter
manufacture began in 1986 at this factory, followed by three-wheeler production in 1987, and
scooterettes and motorcycle facilities in 1990 and 1991, respectively.

Since 1961, when yearly output was about 4000 units, the company has grown to become a
global leader, with annual production over 1.35 million units and product offers across all
categories (mopeds & scooterettes, scooters, motorcycles, three-wheelers).

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TVS MOTORS:

TVS Suzuki, a renowned two-wheeler manufacturer, was founded on the idea of T.S. Srinivasan,
the late founder of the Sundaram Clayton Group, to "create, develop, and build a cheap moped
for the Indian family." In 1980, when the TVS 50, India's first two-seater moped, rolled out of
the plant in Hosur, Tamil Nadu, Southern India, this ambition became a reality.

The TVS 50, a symbol of toughness and dependability, proved to be a promising success and set
the way for many more achievements for TVS Suzuki in the years thereafter. The TVS 50 XL is
a well-known and popular moped, as are the TVS Champ and Super Champ, which were
designed for consumers who prefer economy and athletic appearance. And now, with a 70 cc
high-tech Power Pack, the new XL Super is destined to revolutionise the category of mopeds in
the nation.

It has consistently innovated the motorcycle category in addition to the economic two-wheeler
line. The Suzuki Samurai was designed with the urban commuter in mind.

The Max 100 R was designed with toughness and durability in mind. The Suzuki Shogun was
designed for folks who want unadulterated power. Today, TVS Suzuki continues to stay ahead of
the curve by introducing the Suzuki Shaolin, India's first five-speed 140cc motorbike. Another
example of the firm pioneering a new category and establishing as market leaders is the TVS
Scooty, a 60 cc Scooterette.

In terms of additional victories, 'Team TVS' has won every major race and rally in the nation,
from the street to the track, with each of the TVS motorcycles taking first place. And with each
victory, whether on or off the track, a lot of consumers have gained a better product for their
personal mobility.

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 CASE STUDY
FACTS:

The following are the phases that the facts of the case goes through:

1. The patent of Bajaj

Bajaj Auto Limited (appellant) claims that it was awarded Indian Patent No. 195904 for a patent
application entitled “An Enhanced Internal Combustion Engine Operating on a 4-Stroke
Principle – DTS-i Technology” with a commencement date of July 16, 2002. On July 7, 2005,
the patent was awarded.

The following are some of the invention's features:

A cylinder bore diameter of 45 mm to 70 mm indicates a small displacement engine. Lean air

fuel mixes are burned. At a specified time, a pair of spark plugs ignite the air-fuel combination.

Thus, the applicant claims that his invention was not clear prior to the invention and that it was
innovative since it applied to tiny bore lean burn engines. The invention's industrial use is
unavoidable since it aided the vehicle industry in reducing fuel consumption. Furthermore, since
the development, the number of Bajaj bikes equipped with DTSi Technology has skyrocketed.

2. FLAME- the Bone of Dispute is released by TVS.

M/s. TVS Motor Company Limited, the Respondents, announced the introduction of 125-cc
motorcycles under the trade name 'FLAME' on December 14, 2007. According to Bajaj Auto
Ltd., the motorbike was powered by a lean burn internal combustion engine with a bore size of
54.5 mm and a dual spark plug layout, which infringes on its patent. As a result, before the
introduction of the motorcycles, the applicants filed a lawsuit in court to safeguard their
intellectual property.

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3. TVS brings a lawsuit under the Patents Act of 1970, Sections 105 and 106.

The respondent filed the complaint (C.S. No. 979 of 2007) in the Madras High Court in October
2007, claiming a groundless threat under Sections 105 and 106 of the Patents Act, 1970.

4. Request for the applicant's patent to be revoked

“The applicant further learned that the respondent filed an application for revocation of
applicant's patent No. 195904 before the Indian Patents Appellate Board ("IPAB"), barely seven
days before the intended 125-CC motorbike was to be launched.”3

5. The unveiling of the contentious motorcycle

In contrast to the applicants' expectations, the responses subsequently released the bikes without
making any changes.

ISSUES:

1. Whether the Defendants infringed on the patent or combinations, notwithstanding the fact that
they improved the principal patented article?

2. Whether the applicant's patent was legitimate and remains in effect?

3. Whether there a connection between the design of the TVS flame and the Bajaj motors patent?

4. Whether the injunction was required to safeguard the applicant's rights under the statutory
requirement?

5. Whether it is true that the respondents were intimidated unfairly in order to gain an unjust
monopoly on the market?

PLEADINGS OF THE PARTIES:

APPELLANT:

1.The patent is still valid and active.

2.The responders can't get away with saying that the engine has three valves.

3.There are similarities in the specs.

3
Patents Act, 1970, s 64.

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4.The grant of an injunction is necessary to safeguard the applicant's exclusive rights granted by
the patent.

5.The harm created by the infringing conduct will have an impact on market share loss, among
other things.

6.Because the applicants have launched their motorcycle and the respondents have launched
FLAME but have not sold the motorcycle on a large scale, the applicant is entitled to an
injunction.

RESPONDENT:

1. Instead of approaching the Court to seek justice, the applicants have wrongfully intimidated
and defamed the respondent.

2. In an IC engine, the applicant cannot obtain a patent for the use of dual spark plugs.

3. On August 24, 2007, the respondent filed a petition with the IPAB in Chennai for the
cancellation of the applicant's patent.

4. According to US Honda Patent No. 4534322, the respondent's cylinder will be fitted with two
spark plugs.

5. A patent given to AVL protects the three-valve design and how they operate in the engine.

6. Two spark plugs and three valves are used in this setup.

7. The applicant's claim of inventing a spark plug-centric engine with two spark plugs that
produces a lean air-fuel mixture is not an invention because:

A) The applicant sought to confound the operation of an IC engine, namely the spark plugs.

B) In big bore IC engines, the use of two spark plugs precludes the applicant from claiming
patent protection.

8. The third valve in the respondent's three-valve system isn't just for show.

9. From the specification of the year 2003 and the updated specification of the year 2004, the
applicant switched from a plug-centric to a valve-centric description.

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 JUDGEMENT AND ANALYSIS
After hearing both parties' arguments, the learned single judge weighed several aspects of the
case before reaching a decision.

Interlocutory Injunction is a legal term that refers to a temporary restraining order that is issued
in granting an interlocutory injunction in this patent case, the court considered the following
principles:

• Plaintiff must establish a prima facie case that the patent is valid and infringed;

• Balance of convenience is in favour of the plaintiff; and

• Plaintiff may suffer irreparable harm if an order of injunction is not granted in his favour.

The court made the following conclusions based on the aforementioned principles:

1. Prima Facie Case:

Before deciding whether the Plaintiff has established a prima facie case, the Court had to
consider the applicants' argument that, following the amendment to Section 48 of the Patents
Act, 1970, if a patentee files a suit for infringement based on the patent granted to him, the court
should prima facie presume the patent to be valid until it is revoked or set aside under any of the
grounds set forth in Section 64 of the Patents Act, 1970 or in any other manner.

According to the Court, the amendment gave the patentee an exclusive right to prevent third
parties from using, selling, or distributing the inventions in India, whereas before the
amendment, the patentee had an exclusive right to use the inventions himself, through agents, or
through licensees, as well as to exercise, sell, or distribute them in India.

The court also addressed the respondent's argument that section 13(4) of the Patents Act of 1970
indicates that a patent's validity is not guaranteed by its grant. “The Supreme Court's decision in

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Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries was cited by the Court, In this
decision, the Supreme Court decided that the validity of a patent is not guaranteed by its grant
and sealing, or by the Controller's decision in the event of an objection, since it may be contested
in revocation or infringement actions before the High Court on different grounds.” 4 This is now
supported by section 13(4) of the Act.

Returning to the issue of patent validity assumption, the court noted that, despite the fact that the
new section 48 provides the patent a lot of weight, the patent still has a lot of weight. However,
the clause relating to the burden of demonstrating a prima facie case of patent validity and
infringement has not altered. As a result, it is the plaintiff's responsibility to establish a prima
facie case.

• Whether the innovation is patentable: The word "invention" is defined under Section 2(j) of
the Act. The court had to refer to all of the specifications because Respondent raised the
objection that the applicant is unsure about its invention since it has taken varied stands in the
provisional specification, full specification, and updated specification produced by the applicant.

The court stated that a final claim that provides more construction than what was available
during the preliminary specification period cannot be declared invalid. The court based its
findings on the decisions of Patent Exploitation Ld. v. Siemens Berothers & Co. Ltd. 5 and
Sandow Ld. v. Szalay.6

The court also recognised the following considerations in the Applicants' favour:

1. Since the date of the preliminary specification in 2002 and even after the product (Bajaj Pulsar
motorcycle) was introduced onto the market, the Respondent has neglected to express any
objections.

2. “The vast increase in market share of "DTS-i Technology" between 2003 and 2008 indicates
that the applicant's product, for which a patent was granted as invention, has found a unique
niche in the market.”7

4
Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, AIR 1982 SC 1444.
5
Patent Exploitation Ld. v. Siemens Berothers & Co. Ltd, 1903 RPC 225.
6
Sandow Ld. v. Szalay, 1906 RPC 6.
7
Telemecanique & Controls (I) Ltd. v. Schneider Electric Industries, SA 2002 (24) PTC 632 (Del).

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3. The respondent acted in bad faith by failing to object to the applicant's product since the patent
application was filed. Instead, in 2007, it decided to file a revocation petition with the IPAB for
the first time. Furthermore, the respondent's action of launching "FLAME" within six days of
submitting the revocation petition demonstrates its bad faith.

• The validity of a patent is presumed: The patent issued to the applicant in this instance dates
back to the date of application, which was 16th July 2002 or 2003, when the applicant presented
its product Bajaj Pulsar "DTS-i Technology," and is valid for 20 years under the Act.

“The court cited the case of K. Ramu v. Adyar Ananda Bhavan Muthulakshmi Bhavan, which
dealt with the validity of a patent issued. The plaintiff will be considered to have discharged its
initial responsibility of proving that its patent is protected by the certificate issued by the
competent authorities under the Patents Act, according to S. Rajeswaran, J., where issuance of a
patent right has been admitted and the same is valid for a period of 20 years.”8

The mere filing of a revocation petition under section 64 of the Act does not result in a
presumption that the patent is invalid.

• Infringement concern: The only difference between the parties' goods, according to the court,
was the employment of three valves. “In other ways, the respondent's product seemed to be quite
similar to the applicant's patented invention. To support its position, the applicant claimed that
the third valve in dispute is purely decorative and has no bearing on the applicant's innovation.
The court, however, determined that the question of whether the third valve has a meaningful
impact on the applicant's innovation may only be addressed after a complete trial.”9

• Variant Defense: The court also had to deal with the defence of variation. To put it another
way, where a characteristic of a claimed infringement is beyond the main, literal, or contextual
meaning of a descriptive term or phrase in the claim, would it be covered in its language if
correctly interpreted?

“On this issue, the court relied on the purposive construction of language test established in
Improver Corporation and Ors. v. Remington Consumer Products Ltd. and Ors, in which the
court established the following tests:
8
K. Ramu v. Adyar Ananda Bhavan Muthulakshmi Bhavan, 2007 (34) PTC 689.
9
William Needham and James Kite v. Johnson and Co., 1884 JRPC 49.

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a. The variation is outside the claim if it has a significant influence on how the invention
functions.

b. If the variation has no substantial impact, the court must assess whether this fact (i.e., that the
variant had no material effect) was clear to a competent reader at the time the patent was
published. The variation is outside the claim if it was not evident to him.

c. If the aforesaid fact was evident to him, the court will rule that the language of the claim
indicates that the patentee intended strict conformity with the main meaning as an important
requirement of the invention in the eyes of a reader versed in the art.”10

• Pith and Marrow Test: If the patentee intended it, the variation falls outside the claim.
Purposive construction is required for determining the new aspects of an invention that make up
its "pith and marrow," according to recognised principles spelled forth in different judgements.
“The issue remains whether the patentee intended strict compliance with a specific descriptive
term or phrase appearing in a claim to constitute an important requirement of the invention, in
the view of individuals with practical knowledge and expertise in the area of the invention in
question. In this case, every version falls outside the patentee's monopoly, even though it has no
significant influence on how the invention works.”11

“The court also cited the Delhi High Court's Division Bench decision in Raj Prakash v. Mangat
Ram Choudhary and Ors, in which the bench held that the patented article or process (where a
process patent is at issue) must be compared to the infringing article or process to determine
whether it has been infringed. However, minor or non-essential differences should be
overlooked.”12

To summarise, the court determined that the applicant had shown a prima facie case for an
injunction against the respondent.

2. BALANCE OF CONVENIENCE:

The balance of convenience issue might be resolved after evaluating the applicant's and
respondent's use of the patent, as well as whether the applicant's patent is of recent origin or if

10
Improver Corporation and Ors. v. Remington Consumer Products Ltd. and Ors, 1990 FSR 181.
11
Catnic Components Ltd. and Anr. v. Hill & Smith Ltd., 1982 RPC 183.
12
Raj Prakash v. Mangat Ram Choudhary and Ors, AIR 1978 Delhi 1.

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the patentee has failed to use or begin to distribute its product. In such instances, the court will be
hesitant to issue the patentee an injunction.

“The utilisation of a patent for two years was not considered adequate in the case of Bilcare
Limited v. Supreme Industries Ltd. However, since the Applicant has been utilising the patent
since 2003 (up to and including 2009), the court rejected to rule that the applicant's use of the
patented product is recent.”13

“Furthermore, the court applied the balance of convenience test, as explained by the Court of
Appeal in Corruplast Ltd. v. George Harrison (Agencies) Ltd., to hold that if the Respondent is
aware that the applicant is in the market, that its patent is for a limited period, and that it is in a
critical stage of development, he cannot be allowed to interfere, especially if the defendant is a
strong competitor to the plaintiff.”14

The following facts were discovered to be in the Applicant's favour:

a. Despite claiming to be an AVL licensee, the reply has never advertised the company's goods.

b. The applicant has the right to restrict competition since the patent's validity has been proven.
This was determined to constitute the English Court's balance of convenience test.

c. The person challenging the patent has the burden of proof against its validity.

The respondent's claim that the specifications alter at different stages and that the applicant is
ignorant of its innovation was determined to be false.

As a result, the court came to the conclusion that the balance of convenience favoured the
applicant in granting an injunction.

3. Damages must be paid:

The court had to decide the following issues in order to reach the final test regarding the grant of
interim injunction, namely, whether the payment of damages can compensate the applicant:

a. Whether the quantum of damages can be determined; and

b. Whether there was an element of novelty in the patent.

13
Bilcare Limited v. Supreme Industries Ltd., 2007 (34) PTC 444 (Del).
14
Corruplast Ltd. v. George Harrison (Agencies) Ltd., 1978 RPC 761.

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“The respondent argued that the amount of damages to be awarded to the applicant may be
determined with reasonable confidence using a calculated damages figure. If the applicant wins
the lawsuit, the amount of the applicant's sales, as well as sales from the previous year, may be
used to calculate damages, which can be calculated on a royalty basis. The court, on the other
hand, rejected the claim.”15

On the point of novelty, the respondent argued that the invention in question was "obvious,"
since the applicant's components are well-known across the globe. “This claim was also rejected
by the court, which was reviewing the findings in Bishwanath Prasad Radhey Shyam v.
Hindustan Metal Industries. The Supreme Court ruled that the idea of "inventive step" is a mixed
matter of law and fact in this instance. It maintained that a patentable innovation may be a
mixture of multiple previously known issues, explaining the idea of "obvious." It must not,
however, be only a workshop improvement.”16

The court came to the judgement that the patent in issue included novelty.

Furthermore, the product's originality was demonstrated by its large-scale promotion without
protest for at least 5 years. The court also refused to rule that the applicant's goods was
"obvious."

DECISION OF THE COURT:

The learned single judge ruled that the ideas of prima facie case, balance of convenience, and
insufficiency of damages were in favour of the petitioner after analysing the pleadings and
numerous aspects of the case. The injunction was granted in the applicant's favour.

As a result, the petitioner was granted an interim injunction. The interim ruling was challenged
in the Madras High Court's Division Bench, which granted the appeal.

Through a Special Leave Petition, the appeal was finally heard by the Supreme Court
(Markandey Katju and Ashok Kumar Ganguly JJ.). The Supreme Court questioned the continued
pending of intellectual property cases, even at the interlocutory level, in the case at hand. The
court was also hearing the case for a permanent injunction.

15
Netlon v. Bridport-Gundry Ltd., 1979 FSR 530.
16
Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, AIR 1982 SC 1444.

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The Court overturned the judgement granting the petitioners an interim injunction, holding that
the Respondents were authorised to offer their goods in the market as long as they kept correct
records of all India and export sales. For the same, the court appointed a receiver. The Court
further ordered that the learned single judge determine the permanent injunction complaint and
that the Respondents provide a written statement in the case.

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 CONCLUSION
In the Indian patent system, this case is critical. Several tests have been incorporated in the case,
which have progressed from previous instances. These standards were deemed important in
determining the responsibilities of the parties, one seeking to show patent infringement and the
other seeking to contest the patent's validity.

To resolve the case, the learned single judge of the Madras High Court used the different criteria
used in earlier instances. The court made the correct conclusion in order to preserve the
petitioners' intellectual property. The applicant's market goodwill would have been jeopardised if
the temporary injunction had been refused.

However, in my opinion, the Supreme Court's order quashing the petitioners' temporary
injunction is insufficient. The applicants who risked their lives to have their innovation patented
are entitled to the protection of their patent, which will prevent anyone from utilising it without
permission.

Before addition, the petitioners have shown in the Madras High Court that they possess the
patent as well as all of the components of a patentable invention. Allowing responders to sell
their goods throughout the pendency of the lawsuit will dramatically reduce the applicants'
market share.

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 BIBLIOGRAPHY

ACT:

 Patents Act, 1970.

WEB SOURCES:

 https://www.legalserviceindia.com/legal/article-3886-analysis-on-tvs-motor-company-
limited-v-s-bajaj-auto-limited-2009-supreme-court.html
 https://www.businesstoday.in/magazine/features/story/tvs-vs-bajaj-the-fight-gets-dirty-
13138-2007-09-20
 https://www.tradesafeindia.com/bajaj-auto-ltd-vs-tvs-motor-company-limited/
 https://vidhi.org/bajaj-auto-limited-vs-tvs-motor-company-limited/
 https://indiankanoon.org/doc/1058259/

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