Active Stocks
Mon Dec 11 2023 15:59:37
  1. Tata Steel share price
  2. 130.05 0.66%
  1. ICICI Bank share price
  2. 1,017.05 0.6%
  1. HDFC Bank share price
  2. 1,650.75 -0.14%
  1. Bharti Airtel share price
  2. 997.45 -0.21%
  1. State Bank Of India share price
  2. 614.35 0.06%
Business News/ Companies / News/  Flash Electronics files patent case against Royal Enfield in US court
Back Back

Flash Electronics files patent case against Royal Enfield in US court

Auto parts maker to also move courts in 8 other countries over patent infringement of regulator rectifier
  • Flash Electronics received patent for regulator rectifier in the US on 20 February 2018
  • The lawsuit comes at a time when Royal Enfield has been looking to diversify into more developed markets as well as emerging nations. (Photo: Bloomberg)Premium
    The lawsuit comes at a time when Royal Enfield has been looking to diversify into more developed markets as well as emerging nations. (Photo: Bloomberg)

    Flash Electronics India Ltd, a New Delhi Based automobile component manufacturer, has filed a law suit against country’s largest premium motorcycle manufacturer, Royal Enfield, in the US regarding a patent infringement of a component known as regulator-rectifier. Flash will subsequently file similar law suits against the motorcycle manufacturer in the Europe and Asia-Pacific, including India.

    A regulator-rectifier is a component that efficiently converts the AC (Alternating Current) voltage produced in motorcycle engines into DC (Direct Current) voltage to charge batteries, power headlights, light up instrument panel, thus driving the motorcycle’s electrical systems.

    Flash Electronics was granted patent for the device by authorities in the US and in European countries like Germany, France, Italy, UK, Spain and others.

    According to Sanjeev Vasdev, founder and managing director Flash Electronics, Royal Enfield approached the company for some samples of regulator-rectifier in September 2014, following which Enfield asked another company to manufacture the product.

    After the development came to light, three senior executives of Royal Enfield flew down to Delhi to meet the senior management of

    Flash and accepted the mistake but sought time to settle the issue.

    “On October 12, 2018, we met in JW Marriot in Aerocity and one of the three executives was known to me personally. It was because of his request I decided not to file a law suit then, but they sought some time because the company was launching the new products in different markets. I don’t know if the top management including the managing director of the company knew about this infringement," Vasdev told Mint over a phone call.

    In the last couple of years, the management of Royal Enfield has been actively looking to promote the brand in developed and other emerging markets across the world and this kind of a development will become a setback for the company.

    This is not the first time an Indian automobile manufacturer has been dragged to courts in developed markets for flouting of intellectual property rights.

    In August 2018, Fiat Chrysler Automobile N.V. (FCA) filed a complaint with the US ITC, a federal agency that deals with unfair trade and intellectual property practices of foreign companies, alleging that Mahindra and Mahindra Ltd’s Roxor, an off-road utility vehicle, infringed the intellectual property rights (trademarks and trade dress) of its Jeep design, potentially putting at risk the Indian auto maker’s renewed attempt to enter the US market.

    “We would ensure that Royal Enfield recalls all the products in different parts of the world where our component was used. Flash has received patent from the authorities in United States and Europe, after extensive tests and it took us almost a year and half to complete the legal formalities. We will approach the courts in India as well but here, it takes time to get a verdict. In US and other markets in the West, the courts deliver verdicts quickly and Intellectual Property rights infringement is taken very seriously," add Vasdev.

    If the verdict goes against Royal Enfield and the company has to recall its products across the world, then the financials of the company might take a hit.

    In the March quarter, the company’s motorcycle sales fell 13% year-on-year. But revenues declined only 1.2%, thanks to higher realizations. Ebitda (earnings before interest, tax, depreciation and amortization) margin fell a sharp basis points to 27.4% from a year earlier in Jan-Mar.

    Milestone Alert!
    Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
    More Less
    Published: 20 May 2019, 04:21 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App