Mahindra Files Complaint Against Fiat Chrysler in U.S. Over Breach of Contract

By Little India Desk | August 31, 2018

Mahindra has responded to a complaint lodged by Fiat Chrysler Automobile ( FCA), which had accused the Indian firm of copyright infringement in its Roxor model, by filing a case of its own against FCA at the federal court in Michigan, accusing it of breach of contract. Mahindra has also filed a public interest statement with the United States International Trade Commission (ITC), saying that it is in the public interest for the ITC to rule against Fiat and in favor of Mahindra.

After FCA’s complaint, which was filed earlier this month, Mahindra released a statement, affirming their knowledge about the complaint and said it would respond soon. On Aug. 29, the company released another statement, saying it has taken the actions with the ITC and in the federal district court.

Mahindra said that FCA’s complaints carry no merit as the allegations are false and aimed to create a negative image in the consumers’ minds against the Indian brand. FCA is “using the ITC case to harm our ROXOR business by creating negative publicity, damaging our reputation and our stature in the marketplace,” the company’s statement said.

Fiat has responded by saying that it expects the district court in Michigan to disagree with Mahindra’s claims, Moneycontrol.com reported.

“FCA expects the district court to disagree with Mahindra on its contract claims. But even if it did not the district court should nevertheless decline to enjoin FCA from pursuing its Section 337 claims before the Commission. This presents another basis to deny Mahindra’s request,” FCA responded on Aug. 27, the report said.

FCA said in its complaint, filed on Aug. 1, that the design of the Roxor has been copied from the Jeep, and carries the same “boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood,” according to a previous Bloomberg report.

“Mahindra NA’s website show that they (Roxor) are a nearly identical copy of the iconic Jeep®design and incorporate the Jeep Trade Dress and Jeep Design Marks. In fact, the Accused Product was ‘modeled after the original Willys Jeep’ and copied down to the undercarriage of the historic Jeep® CJ,” FCA’s petition said, Moneycontrol.com had reported earlier.

The Mumbai-based firm says that their business understanding with Fiat Chrysler dates back to 1940 when they made an agreement with the Willys. They signed a contract with Fiat in 2009, which allowed Mahindra to use the 4.5 slat grille design in its vehicles in the United States. Known internally as the ‘approved grille design,’ it features a 4-and-a-half slat design with the central slat raised slightly.

According to Mahindra, since the Roxor features this grille instead of the traditional 7-spoke grille used in Jeep vehicles, it is not liable to any copyright infringement, Moneycontrol.com reported.

“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,” the Indian company said in the statement.

It also refuted FCA’s claim that Mahindra Automotive North America is trying to harm its business by cutting the cost of manufacturing in the United States. “Mahindra capitalizes on the cost advantages of manufacturing their products in India and then importing knocked-down kits to the U.S., where they’re assembled in the Detroit area,” FCA had said in its complaint.

Mahindra has countered the allegation by saying that the ROXOR “was always intended only as an off-road vehicle, does not compete with Fiat vehicles, is manufactured and assembled in the first OEM plant to be built in Michigan, USA, in the last 25 years, (and) was the result of more than three years of research and development.” It has “categorically rejected the notion that the ROXOR was an imported low quality ‘knock-off’ kit car,” the statement added.

Mahindra has also said that FCA’s complaint, filed soon after the launch of its Roxor, is “to arrest and halt the positive momentum of signing up new dealers and customers,” NDTV said in an exclusive report. FCA’s breach of contract has caused “monetary and intangible harm to Mahindra,” it added, according to the report.

Mahindra, known as India’s largest sports utility vehicle manufacturer, expanded its presence abroad last year, by opening its headquarters at Southeast Michigan in the United States. Mahindra Automotive North America (MANA) opened its new headquarters as well as a manufacturing unit with an investment of $230 million in Detroit in November 2017.

Roxor was the first vehicle to be rolled out of the Detroit plant, and was launched in March this year with a price tag of $15000.