Bajaj Auto Ltd. Vs. T.V.S. Motor Company Ltd.

Updated: Oct 23



Citation: Civil Appeal No. 6472 of 2004

Bench: Justice B.N. Agarwal & Justice P.P. Naolekar

Court: Supreme Court of India


Timeline of the Case:

  1. In October 2007, Bajaj claimed unauthorized application of its patent by TVS at Madras High Court.

  2. Bajaj prayed for an order of temporary injunction while the above suit was still pending.

  3. T. V. S. filed a suit against Bajaj for groundless threat of infringement in Madras High Court.

  4. In February 2007, the Madras High Court granted a temporary injunction to Bajaj.

  5. In May 2009, the Division Bench repealed the temporary injunction in response to T. V. S.’s prayer to repeal the same.

  6. Due to this, Bajaj filed suit in the Hon’ble Supreme Court against the order of the Madras High Court.

  7. The matter was settled outside court after withdrawing the several pending suits from various courts and fora. The two companies entered into a settlement agreement and put the dispute to rest.

Laws Involved:

Sections 64, 106, 107 and 108 of the Patents Act, 1970


Facts of the Case:

Two suits were involved in this case. The first one involved Bajaj Auto Limited filing a suit in the Madras High Court under Section 108 of the Patents Act, 1970 against T.V.S. This was filed to obtain a permanent injunction against TVS to prevent it from using Bajaj’s patented 125-CC Flame engine. Bajaj claimed that T. V. S. 's CCVTi technology used in the 125 - CC Flame engine was a replica of its DTS-i technology. With the exception of the three-valve component in the product, it was prima facie similar to the applicant’s patented product.


While this suit was pending, Bajaj prayed for an order of temporary injunction. T. V. S. filed a subsequent suit against Bajaj Auto Limited in the Madras High Court on the basis of the groundless threat of infringement under Section 106 of the Patents Act.


The Madras High Court issued the temporary injunction prayed for by Bajaj. The order stopped T. V. S. from completing pending orders and producing fresh models for the duration of the injunction. In response to this, T. V. S. requested for the repealing of this injunction. The Division Bench of the Madras High Court agreed to this and later repealed it, for which an appeal was filed in the Hon’ble Supreme Court by Bajaj, against the order of the Madras High Court Division Bench. The decision of the Madras High Court was repealed.


Issues:

  • Whether T. V. S. infringed the patent of Bajaj Ltd.?

  • Whether improvements made on patented technology can be used without infringing the original patent?

Analysis:

The plaintiff (Bajaj) claimed that the patented technology was a new invention and fell under the ambit of the definition of ‘an inventive step’. Thus, the technology patented was not prior art and as a result, the injunction could be sustained. It was also contended that Bajaj’s invention came into the market three years before T. V. S’s product had already achieved commercial success.


The defendant, T. V. S., claimed that the technology used in this case was prior art, since it was used before in a US Honda Patent, the patent ought not to have been granted to Bajaj in the first place. In addition to this, Bajaj's claim was for two spark plugs with two valves, and T. V. S. 's design included two spark plugs with three valves for which it held a license. Thirdly, Bajaj’s invention was not new and novel as held under the rules set by Bishwanth Prasad Radhey Shyam v. H. M. Industries AIR 1982 SC 1444. Lastly, they claimed that the validity of the patent could be challenged.


The Hon’ble Supreme Court expressed displeasure at the pendency of the case while it was before the Madras High Court at the interloculary level. The suit was filed in the year 2007, and not even a written statement was filed.


The Hon’ble Supreme Court stated that as observed in the case of M/s Shree Vardhman Rice and Gen Mills v. M/s Amar Singh Chawalwala (2009) 10 SCC 257, matters connected to intellectual property were to be decided expeditiously by the trial court rather than enduring the long process of granting and refusing injunctions.


Thus, without analysing the merits of the case, the Supreme Court ordered the Defendant to file a written statement as soon as possible. In addition to this, it ordered the Madras High Court to hear the case every day until it is disposed of, and that no order for adjournment would be granted. The deadline for the same was the 30th November, 2009.


It also directed that a receiver be appointed, who would be tasked with tracking T. V. S.’s sales until the suit was pending. The Supreme Court then dismissed the appeal.


Conclusion:

The Supreme Court’s role in this case broadened the ambit of trademark, patent and copyright infringement, and it was observed that matters concerning IPR hold high significance, due to which they ought to be disposed of speedily. Further, it provided guidelines to lower courts, an important one being, intellectual property matters shall be heard on a day-to-day basis and should be resolved within a span of two to three months and that this order would have to be strictly and punctually complied with by all lower and tribunal courts. Only circumstances beyond the control of parties would justify an adjournment of the hearing beyond the following day.


If the above guidelines were implemented strictly in all courts, all IPR cases would be decided on a priority basis, which would prevent unnecessary adjournments, thus overcoming judicial delays. This judgement surely bodes well for IPR owners in India, as well as the international community.







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