By Swaraj Singh Raghuwanshi and Rinku Dutta
Introduction
The case of Koninklijke Philips Electronics N.V vs Maj(Retd) Sukesh Behl & Anr[1] is a ruling judgment by the Hon’ble Delhi High Court that deals with the patent enforcement of standard essential patent (SEP). The dispute arose due to the suits filed by Philips Electronics (hereinafter referred to as “the plaintiff”) against the private companies, Pearl Engineering, Siddharth Optical, Powercube Infotech (hereinafter referred to as “the defendant”) for unlawful activities for manufacturing, selling of DVDs using the patented EVM+ technology of the plaintiff without acquiring the license. The Court in this case affirmed the enforceability of the SEP as well as strengthened the IP enforcement and future patent litigation processes in India.
Background and Brief Facts of the Case:
The case is based on three infringement suits, the subject matter of which is based on the Indian patent no. 218255 (hereinafter referred to as “suit patent”), filed on March 17, 1999, as a divisional conventional application. The suit patent relates to EFM+ coding technology, claiming a method of generating modulated signals, which is essential for manufacturing of modern DVD systems. The EFM+ technology enables the transformation of 8-bit information into 16-bit information, thereby producing advanced system for transmitting data.
The plaintiff filed these three suits against the defendant in 2012, demanding permanent injunction along with cost of damages from the defendant for the infringement of its patent without obtaining any licence. The plaintiff alleged that the defendant clearly violating the suit patent since the DVDs manufactured by using the plaintiff’s patented process that provides enhanced data storage capacity of the DVD. The plaintiff further alleged that outsourcing the essential components of the replication process by the defendant is covered under the infringement. The defendant in their counterclaim denied their infringement and challenged the vulnerability of the suit patent based on various grounds, such as, insufficiency of disclosure, non-patentability, false suggestion, and relating to the processing of the application in a country outside India.
Legal Issues Concerning the Case:
- Whether the suit patent is invalid as argued by the defendant in counterclaims of the infringement suits?
- Whether the defendants are infringing the granted patent of the plaintiff?
- Whether the plaintiff is to be awarded with the cost of damages for the infringement by the defendant?
- Whether the defendant has to pay any licensing fee?
Grounds of Revocation Filed by the Defendant:
The defendant had counterclaimed that the suit patent is liable to be revoked under the Patents Act, 1970 (hereinafter referred to as “the Patents Act”) for the following grounds:
- Section 64(1)(d)[2]: for not being an invention within the meaning of this Act;
- Section 64(1)(h)[3]: the complete specification fails to disclose the invention sufficiently;
- Section 64(1)(i)[4]: Scope of the claims are not sufficiently defined by the claims;
- Section 64(1)(j)[5]: Patent obtained by false suggestions or false representation;
- Section 64(1)(k)[6]: The subject matter is non-patentable under Section 3(m), and 3(k) of the Patents Act due to falling under methods of performing mental acts, and computer programs per se respectively;
- Section 64(1)(m)[7]: The applicant has failed to disclose the information required by section 8 of the Patents Act.
About the Parties and Submission of Arguments Made by Them:
The plaintiff, Koninklijke Philips N.V. (Trademark name: “Philips”) is a Netherlands-based company involved in the development and manufacturing in electronics product, domestic appliances and medical devices. Apart from core manufacturing, the plaintiff is also involved in issuing licenses to the other parties for their patented technologies. The plaintiff alleged that the Pearl Engineering had knowingly utilized their patented method for manufacturing the DVDs without obtaining any license agreement. The plaintiff also established that, one of the defendants had obtained a license for the plaintiff’s another patent related to VCD technology, although breaching VCD licence agreement.
The defendant denied any infringement of the plaintiff’s patent, and contended that the suit of the plaintiff is not maintainable. Although the defendant accepted the fact that they have used a replication process to manufacture the DVDs in large scale only after acquiring necessary copyrights approval, and the replication process utilized by the defendant is not similar as the method of compression of data for producing the DVDs, thereby not infringing the method of the suit patent.
Findings of the Court:
After a thorough analysis of the submissions of both parties, the Court gave its verdict in favour of the plaintiff, stating that the suit patent is valid and the defendant had failed to provide any credible arguments to prove the vulnerability of the suit patent. The Court also considered the suit patent to fall under standard essential patent (SEP) under the DVD standard, and rejected all the grounds for revocation, like insufficiency, non-patentability, procedural defects, etc. The Court dismissed the prerequisite criteria of section 8 of the Patents Act, affirming that the revocation of patent under this Act in discretionary, not mandatory. Further, the infringement of patents under direct and indirect infringement had also been clarified, and it was determined by the Court considering the present suit as a matter of direct infringement since the replication process outsourced by the defendants certainly involves the EFM+ encoded technology for manufacturing the DVDs, which infringes claims 1 to 11 and 13 of the suit patent.
In this regard, the Hon’ble High Court awarded the damages based on the FRAND royalty rate and the number of DVDs produced by each of the manufacturers. The cost of damages charged on the defendant are provided as follows:
- The defendant, Pearl Engineering, had to pay the royalty damage of INR ~6.22 crores along with 12% interest per annum since the filing of the suit patent.
- The defendant, Siddharth Optical, had to pay the royalty damage of INR ~1.61 crore along with 12% interest per annum since the filing of the suit patent.
- The defendant, Powercube Infotech, had to pay the royalty damage of INR ~12.43 crore along with 12% interest per annum since the filing of the suit patent.
- An additional damage of INR 1 crore had been charged to each of the defendants for deliberate infringement, non-disclosure of sales records, and procedural misconduct.
The court has further issued a certificate of validity of the claims under section 113[8] of the Patents Act.
Conclusion
The Hon’ble Delhi High Court in the case of Koninklijke Philips Electronics N.V vs Maj(Retd) Sukesh Behl & Anr addressed the protection of the patents under SEP by clarifying the essentiality of the SEP as per the industry standard, ensuring their patent enforceability. This judgment sets a vital precedent under the Indian Patents Act, reinforcing the legal standing of SEPs and enhancing the licensing framework of the patented technologies. It also strengthens India’s position as a jurisdiction that upholds global IP norms while supporting domestic inventions.
[1] Access full judgment at https://indiankanoon.org/doc/19040775/
[2] Access at https://indiankanoon.org/doc/217797/
[3] Access at https://indiankanoon.org/doc/217797/
[4] Access at https://indiankanoon.org/doc/217797/
[5] Access at https://indiankanoon.org/doc/217797/
[6] Access at https://indiankanoon.org/doc/217797/
[7] Access at https://indiankanoon.org/doc/217797/
[8] Visit at https://indiankanoon.org/doc/1937976/