Home/ Auto / Mahindra runs into patent probe hurdle in the US

Mumbai: A US trade regulator on Tuesday said it would probe whether Mahindra and Mahindra Ltd’s Roxor off-road utility vehicle infringed on the intellectual property rights of Fiat Chrysler Automobiles NV’s Jeep design, potentially putting at risk the Indian auto maker’s renewed attempt to enter the US market.

The US International Trade Commission (ITC), in a statement, said it was initiating a patent-related investigation and has not decided on the merits of the case. Within 45 days from Tuesday, a target date would be set to complete the investigation, the statement said.

If the investigation establishes that Mahindra has violated patents, it would derail the Indian company’s 14-year-old plan to sell utility and commercial vehicles in the US that first started in 2004.

A spokesperson for Mahindra said the complaint was without merit as Roxor “was always intended only as an off-road vehicle and does not compete with Fiat vehicles".

In early September, M&M requested ITC to conduct a 100-day expedited consideration of the 2009 pact and its effect on the investigation, that is, whether it is dispositive on all or some of the issues complained of by Fiat, the spokesperson said, referring to a 2009 agreement by Fiat Chrysler to “never" bring such claims if M&M used a grille approved by it, which the Roxor does.

In response to a lawsuit filed by Fiat Chrysler with ITC, Mahindra claimed that “Fiat’s breaches of the contract have caused, and will continue to cause, Mahindra irreparable harm, including loss of goodwill, harm to reputation, and loss of fair competition and competitive advantage".

Fiat Chrysler had called for an immediate halt in all sales and marketing activities of the Roxor in the US, terming the off-roader unlawful and unauthorized.

Mahindra earlier ran into a controversy with dealers that it had identified in the US. They filed a lawsuit accusing Mahindra of fraud, misrepresentation and conspiracy. A Mahindra group spokesperson on Wednesday claimed that there was no pending litigation in the US.

This is not the first time Fiat has locked horns with Mahindra over copyright issues.

Mahindra had to abandon plans to launch the Scorpio pickup truck, after Chrysler Group LLC—acquired by Fiat later—in 2008 objected to the design of the vehicle because Chrysler claimed a trademark in grilles with seven parallel vertical slots. After a long negotiation, Mahindra agreed to incur the costs of a redesign and change to the distinctive approved grille design.

In June the same year, Fiat Chrysler, then only Chrysler, accused Mahindra of using its “Jeep" title for a vehicle sold in South Africa.

Terming the current case as “complex", analysts say the outcome depends on the US government since Fiat Chrysler’s allegations regarding the shape and structure of the Roxor are ambiguous.

“There is no denying that the Roxor originates from the Jeep, but at the same time, there is nothing belonging to Jeep in the vehicle right now," said Deepesh Rathore, co-founder and director at London-based consulting firm Emerging Markets Automotive Advisors. “The mechanics and engineering have all been developed by Mahindra, apart from the original shape, which has stayed the same. Ruling on such a basis would fall into an ambiguous category."

In the current case, Fiat Chrysler has alleged that the Roxor, which Mahindra imports into the US from India as knocked-down kits through its US subsidiary, Mahindra Automotive North America, is “a nearly identical copy of the iconic Jeep design". Fiat Chrysler added that the product was modelled after the original Willys Jeep, which Mahindra had a licence to assemble and sell in India beginning in the 1940s.

Mahindra entered the US market in 1994 to make small tractors. With plans to make new off-highway vehicles at a facility inaugurated last November, it announced the infusion of $600 million (about 4,330 crore) through 2020. This facility is the first new manufacturing unit in the world’s auto capital, Detroit, Michigan, in nearly 25 years, Mahindra has claimed.

On Wednesday, shares of Mahindra fell 0.36% to 937.05 on BSE, while the benchmark Sensex gained 0.81% to 37,717.96 points

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Updated: 13 Sep 2018, 03:19 AM IST
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