Philips v. Bathla: A Defining Moment for SEP Enforcement in India

By Swaraj Singh Raghuwanshi and Subhashree Priyadarshinee

Introduction

On October 13^th, 2025, the Hon’ble Delhi High Court ended one of India’s longest-running patent disputes in the case of Philips v. M. Bathla & Ors.,[1] a case that spanned more than two decades and culminated in India’s first reported finding of non-infringement in a Standard Essential Patent (SEP) dispute.

While the technology involved Video Compact Disc (VCD) audio compression, which had long faded from commercial relevance, the judgment has immediate and far-reaching consequences for SEP enforcement, patent litigation strategy, and licensing negotiations in India. The Court’s decision recalibrates how infringement, essentiality and evidence will be assessed going forward, particularly in disputes involving global patent holders and Indian implementers.

This ruling is less about obsolete media formats and more about the future rules of engagement for technology litigation in India.

In this case the suit was filed in 2004 to stop the Defendants from making, selling, or offering to sell VCD systems. The suit patent was granted on May 28, 1990, and expired on May 28, 2010, while the case was still ongoing. On July 17, 2023, the Court reviewed the case again and decided to focus only on whether there was infringement and if any damages should be awarded.

Background of the Dispute

Philips initiated the suit in 2004 against BCI Optical Disc Limited and its director, alleging infringement of Indian Patent No. 175971 titled “Digital Transmission System.” The patent, granted in 1990 and expired in 2010, related to audio signal coding used in VCDs under the MPEG-1 standard.

Philips asserted that:

• The Defendants procured and used stampers capable of large-scale VCD replication;
• They manufactured and sold VCDs allegedly incorporating the patented technology; and
• They ignored licensing notices displayed on replication equipment.

A central pillar of Philips’ case was that the suit patent was essential to MPEG-1 (and MPEG-2) audio standards, thereby obligating implementers to obtain licenses on FRAND terms.

Although the patent expired during the pendency of the proceedings, the Court vide  order dated July 17, 2023 restricted the issues to infringement and damages, setting the stage for a final adjudication.

Key Arguments

Philips’ Position

Philips contended  what may be described as an “inevitability” theory of infringement: that compliance with the MPEG-1 standard necessarily resulted in use of the patented technology. It relied on selective similarities between the patent specification and the MPEG standard to argue that infringement was unavoidable in any VCD replication process.

On essentiality, Philips asserted that certain portions of the MPEG standard mirrored the patent claims, thereby qualifying the patent as an SEP.

Defendants’ Strategy

The Defendants adopted a multi-layered, commercially astute defence:

• Technical separation: They argued that audio encoding occurred at the master disc creation stage, not during replication.
• Chain of responsibility: Film producers, as owners of the master discs, controlled content and licensing.
• Claim mismatch: The replication process did not implement the specific system claimed in the patent.
• SEP challenge: Philips failed to produce foundational evidence such as SSO declarations, comparable licenses, or independent essentiality assessments.

This approach shifted the case from broad allegations to granular evidentiary scrutiny, where Philips’ case ultimately faltered.

The Court’s Analysis and Findings:

1. Party ImpleadmentThe Court declined to implead film producers or equipment manufacturers, holding that infringement could be assessed based on the direct relationship between Philips and the Defendants. While this finding favoured the patentee procedurally, it did not assist Philips substantively.
2. Infringement Analysis: A Higher Bar for System Patents
   In a significant development, the Court classified the suit patent as a system (product) patent and applied a strict “claim-to-product mapping” standard.Relying on:
   • The Delhi High Court Rules Governing Patent Suits, 2022, and
   • The CRI Guidelines, 2025,

   The Court held that infringement requires proof that each claimed element is present in the impugned product or process.

   Philips’ evidence was found deficient because it focused on functional outcomes (such as similar audio frame length) rather than demonstrating how the defendants’ replication systems implemented the entire claimed system architecture.

   This finding significantly narrows the scope for infringement arguments based on functional similarity alone.

3. SEP Essentiality: Evidentiary Discipline Enforced
   Although essentiality was not framed as a formal issue, the Court addressed it in detail due to extensive submissions.The Court rejected Philips’ SEP claims due to the absence of:
   • Declarations to Standards Setting Organizations;
   • Comparable license agreements for FRAND benchmarking;
   • Independent expert essentiality evaluations;
   • Precise claim-to-standard mapping; and
   • Scientifically robust expert testimony.

   Importantly, the Court held that private negotiations and correspondence cannot substitute formal proof of essentiality under Indian Evidence law. Hence, setting a new evidentiary baseline for SEP litigation in India.

Commercial and Strategic Implications

For Patent Owners and SEP Holders

• SEP enforcement in India now demands front-loaded technical and documentary preparation.
• Assertions of inevitability or standard compliance will not suffice without rigorous claim mapping and independent validation.
• Licensing strategies must anticipate judicial scrutiny of FRAND evidence and essentiality claims.

For Implementers and Indian Industry

• The judgment equips defendants with strong precedent to challenge weak infringement theories.
• Procedural discipline and evidence-based defences can neutralize even long-standing patent assertions.
• This decision strengthens India’s position as a balanced jurisdiction, protective of innovation without enabling over-enforcement.

Conclusion

The Philips v. Bathla decision is a milestone in Indian patent jurisprudence, not because of the technology involved, but because of the discipline it introduces into SEP enforcement and infringement analysis.

For businesses operating in standards-driven industries, like electronics, telecom, media, and software, the message is clear: India now expects precision, proof, and proportionality in patent litigation.

This ruling enhances legal certainty, encourages responsible licensing practices, and signals that Indian courts are fully equipped to handle complex SEP disputes on globally credible terms.

[1] https://indiankanoon.org/doc/48192506/