War of words: Bajaj, TVS fail to fit on the silencer

The war of words between two-wheeler giants TVS Motor and Bajaj Auto intensified on Monday, with both companies issuing ultimatums to each other. While TVS insisted that Bajaj withdraw “its malicious charge”, the latter promised “to inflict the maximum permissible damage upon the offender”.

In a late evening statement on Monday, TVS Motor said it is “insisting on Bajaj Auto withdrawing its malicious charge. If they do it, TVS Motor will leave it at that. Otherwise, it will go ahead with its libel suit”.

The company also said it will ensure, by appropriate legal means, that Bajaj Auto does not interfere with the use of its (TVS Motor’s) CCVTi technology, on the basis of which it has already announced new launches from November. The company appears determined to pursue the revocation petition filed by it before the Patent Office in Chennai.

“Bajaj will take every step to safeguard its interests as also to inflict the maximum permissible damage upon the offender so as to set an effective precedent for the future,” said Bajaj Auto CEO (two-wheelers) S Sridhar.

On Sunday, TVS had threatened to file a suit, claiming Rs 250 crore in damages from Bajaj Auto for alleging that the former had infringed on intellectual property rights by using the digital twin spark ignition (DTSi) technology patented by Bajaj.

On August 30, TVS had unveiled its 125cc bike Flame, just before the scheduled launch of Bajaj Auto’s 125cc platform bike, Exceed, on September 10. Bajaj has accused TVS of copying its DTSi technology for Flame.

Though neither party seemed prepared to budge from their respective positions, they have not moved the courts either. “We feel we have a strong case. They (Bajaj) feel they have a strong case. We will act as per the considered opinion of our legal advisors,” TVS Motor CMD Venu Srinivasan told ET.

We will act with sagacity,” added Mr Srinivasan.

In its revocation petition, TVS Motor has sought cancellation of Bajaj Auto’s patent on the widely-used DTSi technology. According to TVS, it is a universally-used technology and its application should not be restricted to any particular company in India. The petition, filed in the week beginning August 20, has contended that the twin spark-plug technology is a “known prior art” and hence not patentable.

TVS head of international business and three-wheeler project HS Goindy told ET, “It’s a commonly-used engine technology, without any kind of exclusive rights. Our 125cc Flame on the same technology will be launched as per our original plans in October.”

Bajaj too is not leaving any stone unturned to protect its market, which is largely based on its DTSi platform. Most of its motorcycles, including the high-volume Discover, Pulsar and Avenger—which have made Bajaj Auto the domestic leader in the premium (125–250 cc) segment and also the largest two-wheeler exporter from India—are based on the DTSi technology.

“We are the creators of the technology and we will defend it at any cost since our future product portfolio rides on this technology,” said Mr Sridhar, adding that statements from TVS Motor about seeking to revoke the Bajaj Auto patent were “a means to work themselves out of the situation”. “Our patent (number 195904 and approved on July 7, 2005) remains valid,” he said.

The 125cc motorcycles are all set to become the largest segment in the 7.8 million unit strong two-wheeler market. Bajaj Auto plans to make the 125cc segment its entry level, where the DTSi technology will play the major role.
“They (Bajaj) have not seen the product (Flame),” maintained Mr Goindy.

The TVS statement said, “Bajaj Auto does not even know what the configuration of TVS Motor’s new technology, CCVTi, is.” It claimed that TVS Motor had developed the wholly in-house technology for the first Indian motorbike, Victor, as early as 2002.

The new technology of TVS Motor has been developed along with globally-renowned engine research institute AVL of Austria, and is totally different from the technology used by Bajaj Auto, the statement said.

“Bajaj is preparing to defend its intellectual property in the event that such a product is eventually introduced. If evaluation of the actual product appears to suggest reasonable grounds for infringement, Bajaj will take all necessary steps to safeguard its interests as also to inflict the maximum permissible damage upon the offender so as to set an effective precedent for the future,” said Mr Sridhar.

“We cannot proceed against them till they launch the product and we believe they may well postpone or delay the launch of the bike on technical grounds,” Mr Sridhar said.

Clearly, TVS, which is set to roll out as many as 12 products from now until July next year, did not expect this backlash from Bajaj. Market circles feel the attack from Bajaj has come at a time when TVS is entering the three-wheeler segment, a strong domain of the former, and is also set to bring in a few high-powered bikes for the executive and top-end segments.

Even as both the companies are preparing for a showdown on the legal front, observers feel the issue is also likely to assume political overtones, with both sides trying to mobilise support in the political corridors of power.