Setback for Mahindra in US as court denies motion for injunction in infringement case

Mumbai: In a major setback for utility vehicle (UV) maker Mahindra and Mahindra Ltd (M&M), a US district court in Michigan denied the company’s motion for a preliminary injunction that would have prevented Fiat Chrysler Automobiles (FCA) US LLC from bringing a complaint against it in the US’s International Trade Commission (USITC).

The court, in a 2 October order, denied the motion filed by M&M and its North American unit, Mahindra Automotive North America (MANA), on 23 August on the grounds that they “cannot show that they are likely to succeed on the merits of their claim”.

The claim was that FCA cannot bring a suit against M&M for using an approved grille design owing to a contract signed in 2009, which was the result of negotiations between the two automakers after FCA asserted the Scorpio UV’s grille infringed on its trademark with seven parallel vertical slots.

In early September, FCA petitioned the court to reject M&M’s motion for injunction, claiming that the Indian automaker is seeking refuge in a legal interpretation of the 2009 contract.

On 1 August, 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 M&M’s Roxor off-road utility vehicle infringed the intellectual property rights (trade marks and trade dress) of its Jeep design, potentially putting at risk the Indian auto maker’s renewed attempt to enter the US market.

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

On 13 September, Mint reported that the ITC would probe the matter. If the investigation established that Mahindra had 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.

In the 2 October order, the court said that FCA’s ITC complaint is outside the scope of the 2009 agreement because it “asserts claims that are not based on the Approved Grille Design” as FCA believes the grille on the Roxor is “taller and more square” than the approved design and also includes circular headlights, which are similar to the Jeep’s, and are not part of the agreed-upon design.

M&M responded by saying it is “nonsensical” that the Roxor’s grille does not comply with the approved design because the agreement doesn’t indicate specific dimensions, which indicates that the matter would proceed in the Michigan court as well as the ITC.

However, the court said that M&M did not “present evidence sufficient to show that they can succeed on” FCA’s claim of trade dress infringement as well.

The court added that the issuance of a preliminary injunction would cause harm to Fiat since the ITC complaint had not been resolved and therefore, it is possible that Mahindra is infringing Fiat’s intellectual property rights.

A Mahindra spokesperson said that in anticipation of the possibility that the Michigan court would be “unwilling” to grant the injunction, Mahindra filed a motion for summary judgement on 26 September with the ITC, challenging the patent infringement claims made by Fiat with respect to the Roxor grille.

“In that motion, we requested that the ITC dismiss those claims since the ITC only has jurisdiction over trade disputes. A summary judgement in favour of Mahindra would be appropriate since the grilles were designed, manufactured, and assembled all within the United States (and not imported). That would leave the ITC to resolve the remaining merits of Fiat’s trade dress claims which we have always held were without merit”, the spokesperson said in an email.

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.