Koninklijke Philips Electronics N.V. v. Rajesh Bansal & Ors.

Patent infringement dispute involving the famous Philips “VCD player technology” patent, establishing how courts assess essential features, evidence, and royalty for standardized technology.

Summary

This case concerns Philips, the global electronics company, which owned a Standard Essential Patent (SEP) relating to the technology used in Video CD (VCD) players. The defendants were manufacturing and selling VCD players in India without a license from Philips. Philips argued that the defendants’ products were using essential decoding technology covered by its patent. The defendants claimed they were not infringing, that the patent lacked novelty, and that Philips was demanding excessive royalty.

The Court held that Philips’ patent was valid, enforceable, and had been used by the defendants without authorization. The Court also recognized the importance of SEPs and the obligation of implementers to take a license on FRAND terms (Fair, Reasonable, and Non-Discriminatory). Ultimately, the Court ruled in favour of Philips and awarded damages and royalty.

Facts

Philips held a patent covering the compression and decompression technology essential for VCD operation. Several Indian manufacturers imported VCD player components from China and assembled them in India for sale. Philips sent notices requesting them to obtain licenses, but the defendants did not comply.

Philips filed a suit alleging patent infringement. Technical experts confirmed that the defendants’ VCD players used the patented technology. The defendants argued lack of technical similarity and challenged the patent’s validity, but they could not produce sufficient evidence to disprove infringement or the patent’s essential nature.

Findings of the Court

The Court examined the claims of the patent and compared them with the functioning of the defendants’ VCD players. It held that the core decoding mechanism in the defendants’ devices directly overlapped with Philips’ patented technology.

The Court affirmed that SEPs are critical for standardized technology and that manufacturers cannot avoid liability by claiming ignorance. The patent was found valid, and the defendants were held liable for infringement. The Court also acknowledged Philips’ right to claim FRAND-based royalty.

Suggestions (Practical Points)

Manufacturers using standardized technology must perform due diligence and obtain proper licenses before selling products in the market. In SEP cases, courts generally support the patent holder if technical evidence proves that the patented essential features are present. It is advisable for businesses to maintain documentation and negotiate FRAND licenses to avoid litigation.

Judgment (Final Order)

The Court ruled in favour of Philips, confirming the validity of the patent and holding the defendants guilty of infringement. The defendants were directed to pay damages and reasonable royalty, and were restrained from manufacturing or selling VCD players that incorporated the patented technology without a proper license.