Flash Electronics has filed a lawsuit against Royal Enfield alleging patent infringement.
One of the most loved bike manufacturers in India, Royal Enfield might face trouble introducing BS6 vehicles in the future. Delhi-based Flash Electronics has filed a patent infringement lawsuit on the company. The issue is regarding the usage of regulator rectifier, a component necessary for BS6 compliance that converts the alternating current voltage produced by motorcycle engines into a direct current voltage to charge the battery, power the headlights and light up the instrument panel.
Flash Electronics claims that Royal Enfield has breached their patent by sourcing the component from Varroc Group. According to the company, they hold the patent in the USA and the UK and have filed the lawsuit in Wisconsin, USA.
If Royal Enfield fails in the court settlement or gets an unfavourable judgment, the company will have to look for an alternate vendor. Even though companies like Royal Enfield work on a multi-vendor system, sourcing the components from a different vendor in such a short period of time will add to the cost of manufacturing. This can severely hurt their expansion plans in the international markets. Sale in the domestic market has been slow as well due to the slowdown in the industry.
Both the companies have had several meetings but have not come to an agreement yet. According to Flash Electronics, Royal Enfield is ready to offer them 100% of the foreign business with some future prospects in the domestic business as well. At the moment, due to the ongoing talks between the companies, the case has been put on hold by Flash Electronics. The company aims to get Royal Enfield penalised and force them to stop production. It is to be noted that several companies like Bajaj source their components from Flash Electronics as it provides them a much more economical option than other foreign firms.
Royal Enfield BS6 Bikes
– RE is being sued by Flash Electronics over infringement of patent of the regulator rectifier
– The company may have to look for alternate vendors at an increased cost
– The companies are in talks for a settlement but have not come to an agreement yet
Source- LiveMint.com