Mahindra and FCA continue sparring over design infringement issue

by Ujal Nair 29 Nov 2019

In a regulatory filing today, Mahindra & Mahindra has announced that the sale of Mahindra Roxor and its parts have been prohibited in the USA as per an order from the administrative law judge under the International Trade Commission (ITC) in the US.

In the complaint filed by Fiat Chrysler Automobiles (FCA) before the United States International Trade Commission (USITC), the Administrative Law Judge (ALJ) has in its initial determination found that while the design of the Roxor vehicle does not violate any of FCA’s registered trademarks, it violated FCA’s trade dress.

Mahindra & Mahindra further confirmed that the initial determination made by the administrative law judge of the ITC is a non-binding recommendation to the ITC and the company has asked the same to be reviewed. The ITC will consider the initial determination and review applications filed by the parties and make a final determination.

Meanwhile, FCA has filed a counterclaim in the proceeding filed by Mahindra before the Eastern District Court of Michigan, seeking a permanent injunction on manufacture or sales of the Roxor, as well as disgorgement of any profits made by the company from sales of the Roxor.

If FCA succeeds in getting a permanent injunction, then Mahindra Automotive North America (MANA), the Mahindra subsidiary in the US, will no longer be able to sell Roxors in the US. Mahindra believes that no claims for disgorgement of profits arise. The complaint filed by FCA to ITC still remains and ITC is still continuing with its investigations.

What Mahindra says
Commenting on the ongoing development, a Mahindra spokesperson said, “While the initial ruling concludes that the Roxor violates “Jeep Trade Dress,” until this case, FCA had never defined what it believes to be the “Jeep Trade Dress” or identified it as a business asset in any filings (bankruptcy or otherwise).  Instead, at trial, FCA admitted that it believes it can define and redefine its “Jeep Trade Dress” depending on the product it is challenging – an unreasonable, anti-competitive, anti-business stance that, if successful, could cost good-paying American jobs.”

"Ultimately, the ALJ’s opinion is only a recommendation, and we have asked the entire ITC to review it.  The ITC has the discretion to either adopt the ALJ’s opinion in whole or in part, rewrite parts of it, or completely reject it.  Therefore, it is very important to wait for the ITC review to be finalised.  While there are reports of a cease and desist order with respect to the Roxor, no such order has been entered.  Finally, it was Mahindra, not FCA, who commenced the legal action in the Federal District Court in Michigan. We did this in an attempt to enjoin the ITC action and assert injury claims to our business and reputation as a result of unfair and anti-competitive actions by Fiat Chrysler."

"The Roxor was engineered and developed in the US and is based on the same platform as Mahindra’s Thar vehicle sold in India and many other markets. Mahindra has been manufacturing the Thar and its predecessors since just after World War II.  The Roxor’s resemblance to the CJ and military-style Willys jeep is directly related to this 70-year heritage.” 

When partners turned foes
On August 1, 2018, Fiat Chrysler Automobiles US had filed a complaint against Mahindra & Mahindra (M&M) and Mahindra Automotive North America (MANA) with the United States International Trade Commission (USITC), which said that the sale of the Mahindra Roxor violated Section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain motorised vehicles and components thereof that infringe trade dress and trademarks asserted by the complainant. 

The FCA complaint alleged that certain design features of the details of the Mahindra Roxor infringed the intellectual property rights of dispute/ litigation – Fiat's Jeep design as it was modelled after the original Willys Jeep. FCA had requested that the USITC issue a limited exclusion order and cease-and-desist orders against Mahindra & Mahindra and MANA.

Mahindra had disputed the claim and had said that the case was without any meritOn August 29, the company had issued a public statementwhich said, " Our goals on the public interest statement were two-fold. One was to state our position on the merits and the other was to correct inaccuracies regarding Mahindra as a company and the Roxor as a product. We set the record straight on the history of Mahindra, including its US operations. We also demonstrated that the Roxor is a vehicle that was always intended only as off-road, does not compete with Fiat vehicles, is manufactured and assembled in the first OEM plant to be built in Michigan in the last 25 years, was the result of more than three years of research and development, and categorically rejected the notion that the Roxor was an imported, low-quality ‘knock-off’ kit car."

On August 23, 2018, Mahindra filed a complaint in federal court in Michigan on the issue of the applicability and enforcement of its 2009 agreement with Fiat. The company had said, “We are asking the court to block Fiat from participating in the ITC claim – an injunction – because of the fact that they agreed in 2009 to never bring such claims if we use a grille that they approved. The Roxor uses that grille. We are also arguing that Fiat is using the ITC case to harm our Roxor business by creating negative publicity, damaging our reputation and our stature in the marketplace.”

The dispute arose between the former partners when Mahindra launched the Roxor for the US market. In its argument, FCA claimed that the Roxor infringes FCA's intellectual property rights because the Roxor's grille, which has five slots, is confusingly similar to the Jeep brand's seven-slot grille design. Mahindra countered the argument saying that an agreement from 2009 barred FCA's pursuit of the infringement allegations because the Roxor uses the five-slot grille design that FCA approved for use in the 2009 agreement.

Also read: 2020 Mahindra Roxor to get updated looks

US Trade Commission clears path for Mahindra Roxor sales in America (29-11-18)

Mahindra Roxor rolls out with 6-speed Punch Powerglide automatic transmission