Whalesbook
Court Demands Proof of Infringement
The Delhi High Court has delivered a significant blow to Koninklijke Philips Electronics NV, rejecting its claim for royalties in a DVD patent case. The court's division bench, comprising Justices Hari Shankar and Om Prakash Shukla, stated that a patent owner cannot simply assert a royalty claim based on a patent being essential to a product standard. Crucially, the patent holder must provide concrete evidence demonstrating that the opposing party actually utilized the patented technology.
Overturning Previous Ruling
This ruling directly contradicts a 2018 judgment that had ordered KK Bansal and Rajesh Bansal, associated with Mangalam Technology and Bhagirathi Electronics, to pay substantial royalties and damages to Philips. The dispute centered on Indian Patent IN 184753, which related to a decoding device within DVD players, essential for reading disc information. Philips had argued this was a Standard Essential Patent (SEP), meaning any DVD player adhering to the standard would inevitably use their technology.
Bansals' Defense and Exhaustion Doctrine
The Bansals successfully argued that they had sourced printed circuit boards containing MediaTek chips from authorized dealers Shuntak and Sheen Land. The court accepted this, noting that MediaTek was an authorized dealer of these specific boards. Furthermore, the court invoked the doctrine of patent exhaustion under Section 107A(b) of the Patents Act, indicating that Philips' exclusive rights were extinguished once the patented item was first sold.
FRAND Rates Unproven
The division bench also found Philips' royalty rates to be unsupported by evidence. The court highlighted that Philips failed to present any licensing agreements with third parties, despite a witness claiming such documents existed. The judges further questioned Philips' attempt to calculate royalties based on the entire DVD player, emphasizing that the patent specifically covered only the decoding device, not the complete product. Consequently, the appeals filed by the Bansals were allowed, and the previous single-judge ruling was quashed.