Chennai: With the Madras High Court barring the sale and manufacture of TVS Motor's 125cc Flame motorcycle Bajaj Auto seems to have emerged victorious, at least for the time being, in its ongoing battle with the South-based company over the marketing of its 125cc TVS Flame, with TVS retaliating with a defamation suit (See: TVS Motor sues Bajaj Auto for defamation, claims Rs250-cr damages) 
 
The Pune-based Bajaj Auto had filed a case against the South-based TVS Motors India's third- biggest two-wheeler maker last September alleging infringement of its patented DTSi technology.

Bajaj Auto says it was awarded the global and Indian patent 195904 for the DTSi technology for small engines on 16 July 2002 for a period of 20 years. It also alleges TVS Motors is using this technology in the Flame bike.

TVS Motors has responded by saying that the Flame is fitted with a three-valve engine based on CCVTi (Controlled Combustion Variable Timing Intelligent) technology, which is different from the technology used by Bajaj Auto. It denies having infringed on anyone's technology for the 125cc Flame bike.

The latest interim order by Justice P Jothimani dismissed TVS' application to go ahead with bookings of its motorbike Flame. The judge granted the stay order on a suit filed by Bajaj and passed an order restraining TVS Motor from manufacturing, marketing and selling of Flame.

The judge also dismissed a petition filed by TVS Motor Company to restrain Bajaj from interfering with the manufacture and sale of its new bike Flame. The new order overrules an earlier 20 December 2007 verdict of the same court which allowed TVS to take orders on the 125cc model.

The court also dismissed a petition filed by TVS under section 106 of the Patent Act, which deals with the power of the court to grant relief in "cases of groundless threat of infringement proceedings."

Earlier, a Supreme Court directive, on January 18, had restrained TVS-Motors from accepting any fresh bookings for the 125cc Flame bike till 29 January. It was, however, permitted the manufacturer execute its earlier bookings.

The suit was filed by Bajaj Auto under Section 108 of the Patents Act, 1970 for relief of permanent injunction in respect of its patent No 195904 and / or from using technology / invention described in said patent, and / or manufacturing and marketing two- and three-wheelers, including the proposed 125cc Flame motorcycle containing an internal combustion engine or any internal combustion engine or product which infringed plaintiff's patent, claiming of damages for infringement of patent to the extent of Rs10.5 lakh, etc.

TVS Motor is expected to file an appeal before the division bench of the Madras High Court.

This ruling has come as a blow to the South-based two-wheeler maker, which was banking on the Flame to increase sales and profitability. TVS Motor's bike sales have been weak throughout this fiscal year.

In the first 11 months of 2007-08 TVS' motorcycle sales were down 41.5 per cent to 417,837 units and its market share in this category dipped to 8.6 per cent in this period from almost 13 per cent a year ago.  The falling sales have dented the profitability of the company as in the quarter ended December 2007, TVS' net profit reduced by almost 50 per cent.

Bajaj Auto's patented DTSi technology uses two igniters instead of one for better fuel efficiency. Bajaj uses the DTSi engine technology in four of its models-Pulsar, Avenger, XCD and Discover.

TVS says its technology uses three valves instead of the two used in DTSi and introduced the Flame late last year.

TVS also filed two more suits against Bajaj Auto in the Bombay high court to claim damages for defamation and another for revocation of Bajaj's patent in the Intellectual Property Appellate Board, a quasi-judicial body.

Bajaj Auto has recently introduced a 125 cc bike XCD that competes against the TVS' Flame.

The executive sement is the largest selling category of bikes and one in every two motorcycles sold in India fits in this category which is one category above entry-level bikes.

Analysts say this is an important segment for any manufacturer as it is the largest segment and also the best in terms of margins.

Last month TVS Motor Company had decided to roll out the TVS Flame across five cities.