Three months after Fiat Chrysler Automobiles (FCA) dragged Mahindra & Mahindra to court over violation of intellectual property rights (IPR), the investigative staff appointed by the US Trade Commission has barred FCA from pursuing the investigation further.
If the US Trade Commission accepts the findings of the Commission Investigative Staff the Mumbai-based M&M will be allowed to import the Roxor off-road vehicle from India to market them locally in the US. This could prove to be a huge setback for FCA which had accused M&M of copying the Jeep’s grille design for the Roxor. Jeep is an FCA brand.
“The Commission Investigative Staff believes that Mahindra & Mahindra and Mahindra Automotive North America, Inc. met their burden of establishing that FCA US LLC is contractually barred from enforcing its intellectual property rights against Mahindra’s importation of the accused vehicle," said a statement from the Staff.
“FCA is contractually barred from pursuing this investigation if Mahindra’s vehicles contain or use the approved grille design. The evidence shows that Mahindra’s Roxor uses the approved grille design. Thus, the record supports a finding that Mahindra met its burden of proving by a preponderance of the evidence that FCA is contractually barred from pursuing this Investigation," the statement further added.
Though exact details are not made public more than 4,000 units of the Roxor are believed to have been retailed till now in the US. M&M exports kits of the Roxor in CKD form which is later assembled in the US. Fiat Chrysler has termed Roxor sale as unlawful and unauthorised.
Speaking to analysts Pawan Goenka, Managing Director, M&M said, “We are looking to sell 4,500-5,000 Roxors by end of this financial year."
M&M launched the Roxor, an off-road but not street legal, SUV in March 2018 in the US. Priced at $15000 and powered by 2.5 litres, 4 cylinder diesel engine, the Roxor is based on the Thar with no doors and no hard top roof and without a windscreen.
This is the second instance of M&M trying to enter the US market. In an earlier instance, M&M had planned to launch its SUVs in the US in 2009. But due to regulatory issues, the launch never happened forcing its dealer partners in the US to file a lawsuit against the company in mid-2012.
M&M recently dropped plans of launching its Korean SUV-making subsidiary SsangYong in the US though entering the US market was one of the long-term strategies of the company.
“Mahindra has no right to use the Jeep IP. FCA owns and retains full rights in the Jeep IP and has not granted a license to Mahindra to use the Jeep IP in any country, including the United States. FCA’s predecessors did have prior dealings with Mahindra India, granting Mahindra India limited contractual rights to manufacture and/or sell Jeep branded components and products in India beginning in the 1940s. And none of those contracts at any time granted Mahindra India (or any other Mahindra entity) ownership rights over Jeep brand-related intellectual property. Nor did any of these past agreements grant any rights to manufacture, sell, or advertise vehicles, such as the Accused Products, incorporating the Jeep IP in the United States,” FCA had said.
Correction: An earlier version of this report inadvertently concluded that M&M had won the case against Fiat Chrysler for selling the Roxor in the US.