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2018 Supreme(Del) 1454
IN THE HIGH COURT OF DELHI AT NEW DELHI
MUKTA GUPTA, J.
KONINKLIJKE PHILIPS ELECTRONICS N.V. - Plaintiff
Versus
RAJESH BANSAL, SOLE PROPRIETOR, MANGLAM TECHNOLOGY & ORS. - Defendants
CS (COMM) 24 of 2016, CS(COMM) 436 of 2017
Decided On : 12-07-2018
For the Plaintiff : Mr. Pravin Anand, Ms. Vaishali Mittal, Mr. Sidhant Chamola, Ms. Vrinda Gambhir, Ms. Saugat Khurana, Ms. Mrinali Menon, Advs.
For the Defendant : Mr. Sidharth Aggarwal, Ms. Swathi Sukumar, Ms. Namrata Pahwa, Mr. Nikhil Pillai, Advs.
Headnote:
The Court held that the suit patent was an essential standard patent in respect of DVD technology player, however, no injunction can be granted to the plaintiff for the reason the plaintiff’s suit patent expired on 12th February, 2015. The plaintiff is also found entitled to a decree for recovery from Rajesh Bansal and K.K. Bansal of royalty payable at FRAND rates, that is, USD 3.175 upto 7th May, 2010 and thereafter USD 1.90 upto 12th February, 2015 from the date of institution of the suits with interest @10% p.a. from the end of the month for which royalty is due till the date of payment per video player manufactured/sold. A decree of punitive damages to the tune of Rs. 5 lakhs is also passed in favour of plaintiff and against Rajesh Bansal.
Issues: 1. Whether the plaintiff is the proprietor of Indian Patent registered under No. 184753? 2. Whether the plaintiffs are owners of a valid patent? 3. Whether the defendants have infringed the plaintiffs’ Indian Patent No. 184753? 4. Whether the defendants had knowledge of the plaintiffs’ patents in respect of DVDs and the plaintiffs’ licensing programs? 5. Whether the plaintiffs along with various other members of the DVD forum are misusing its position with a view to create a monopoly and earn exorbitant profits by creating patent pools? 6. Whether the suit patent is an essential standard patent in respect of DVD player technology? 7. Whether the defendant No.2 is liable to pay any license fee to the plaintiffs and if so at what rate? 8. Whether the plaintiff is entitled to a decree of damages or any other relief?
1. Plaintiff filed two suits being CS(OS) No.1034/2009 and CS (OS) No.1082/2009 alleging infringement of its essential DVD Video Player patent, in particular Indian Patent registered under No.184753 seeking the reliefs of permanent injunction, directions to the defendants to provide complete details, delivery, rendition of accounts, damages, etc. In CS(OS) 1034/2009 which was later re-numbered as CS(COMM) 24/2016 the plaintiff initially impleaded K.S. Negi and Manglam Technology as defendant No.1 and 2 respectively and in CS(OS) 1082/2009 which was later re-numbered as CS(COMM) 436/2017 impleaded Bhagirathi Electronics, Big Bazar and Home Solutions Retail (India) Limited as defendant No. 1, 2 and 3 respectively.
2. The case of the plaintiff in the two plaints was that the plaintiff is a company incorporated under the laws of Netherland and was formally known as N.V. Philips Gloeilampenfabrieken prior to changing its name to Philips Electronic N.V., which was further changed to Koninklijke Philips Electronic N.V. in the year 1977. The suits have been filed through the authorized attorney of the plaintiff, Farokh Bhiwandiwala. Plaintiff claims to be a global top electronics corporation providing consumer electronics and domestic appliances, lighting, health care etc. in over 60 countries and a world leader in digital technologies for televisions and displays, video compression and optical storage products. According to the plaintiff, it was investing huge amounts in the research and development. Plaintiff claims to hold approximately 55,000 patent rights, 33,000 trademark registrations, 49,000 design registrations and 26,000 domain name registrations. Plaintiff has been spending substantial amount in advertisement and promotion of its products world over including India.
3. The two suits concern the patent being Indian Patent No.184753 on Channel (De)coding technology used for DVD Video Playback function in a DVD Video Player. It is claimed that the plaintiff is the registered proprietor of IN-184753 dated 13th February, 1995 for “Decoding Device for converting a Modulated Signal to a series of M-Bit Information Words”. The invention concerns ‘channel modulation’ which involves a coding step that is performed directly before the storage of the data. This coding ensures that the data to be stored on the disk has a particularly suitable structure for storage. The decoding of 16-bit code words to 8-bit information words is performed by “looking ahead” to the next code words. Plaintiff claims that IN-184753 is an essential patent of the plaintiff corresponding to US 5696505 and EP 745254B1 registered in USA and Europe respectively. The essentiality with respect to the said patent has been analyzed declaring the corresponding US and EP patents as essential. The suit patent of the plaintiff being an essential patent, any party interested in manufacture of DVD Video players ought to have sought licenses for all essential patents of the patent pool. It is claimed that the plaintiff offers two types of patent licenses to DVD Video players manufacturers firstly, the PHILIPS ONLY version offering only patents of Philips and secondly the JOINT version offering patents of Philips, Sony, Pioneer and LG.
4. In CS(COMM) 24/2016 it is claimed that defendant No.1/K.S. Negi is the Unit Head of defendant No.2/Manglam Technology (in short ‘Manglam’) which is an entity having its service centre at Delhi and the defendants are engaged in manufacture, assembly and sale of DVD Video players under various brands one of which is SOYER DVD Video players. It is claimed that the defendant’s DVD Video Players employ Decoders especially meant for decoding contents stored on optical storage media in accordance with the methods described in IN-184753, thus infringing the suit patent. In CS(COMM) 436/2017 plaintiff had impleaded defendant No.1/Bhagir
