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Mahindra faces US trade commission probe after Fiat alleges patent violation

Fiat says Mahindra's Roxor SUV is a copy of Jeep

A Mahindra Roxor utility vehicle blasts souvenir balls and t-shirts into the crowd during a game between the Detroit Tigers and Chicago Cubs at Comerica Park on August 22 in Detroit, Michigan.   © Getty Images

MUMBAI (NewsRise) -- Mahindra & Mahindra's efforts to gain a toehold in the U.S. market is facing a fresh hurdle as Fiat Chrysler Automobiles alleged a patent infringement by the Indian automaker, triggering an investigation by the trade commission.

The investigation is based on a complaint filed by Fiat on Aug. 1 that sought to ban the import of Mahindra's Roxor sport-utility vehicle into the U.S. Fiat is alleging that the vehicle is a copy of one of its top brands, Jeep.

The complaint alleges violations of U.S. rules in the import and sale of certain motorized vehicles and components that infringe "trade dress" and trademarks asserted by Fiat, the U.S. International Trade Commission said in a statement on Tuesday.

Fiat last month said Mahindra Roxor infringes key characteristics of Jeep's signature trade dress -- the "boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood." The complaint also said that the alleged violations have "the threat or effect of causing substantial injury" to the U.S. auto industry, the regulator said.

The USITC aims to complete the probe in 45 days. A spokesman for Mahindra didn't immediately respond to a query.

The complaint comes at a time when Mahindra is making a second attempt to grab a spot in the U.S. market after a plan to sell a pick-up truck based on its Scorpio SUV there was abandoned at the beginning of this decade amid a legal battle with its dealer.

In 2013, Mahindra opened a technical center in Michigan to design, engineer, and develop new vehicles. Last year, Mahindra opened its first vehicle assembling plant in the U.S. with an ambitious plan to manufacture off-road vehicles designed and engineered by Mahindra Automotive North America.

The company had then announced plans to invest $600 million in the Roxor manufacturing facility and triple its workforce. By 2020, the group planned to employ as many as 670 workers there.

At the company's annual general meeting early last month, Anand Mahindra, the chairman of the Mumbai-based conglomerate, had dismissed allegations of Fiat as "baseless," saying the group has not received any complaints.

On Aug. 29, Mahindra called Fiat's complaint with the trade commission as one "without merit," and said it has filed a case at the federal court in Michigan, asking it to block Fiat from participating in the USITC claim. Mahindra sought the injunction citing a 2009 design agreement with Fiat.

"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," Mahindra group then said in a statement.

Shares of Mahindra lost 0.4% in Mumbai trading on Wednesday while the benchmark S&P BSE Sensex gained 0.8%.

--Dhanya Ann Thoppil

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