Recently, the Delhi High Court delivered a landmark judgment in three interconnected patent infringement suits in Koninklijke Philips N.V vs Maj (Retd) Sukesh Behl & Anr. [CS(COMM) 423/2016, CS(COMM) 499/2018, CS(COMM) 519/2018] [2025:DHC:1144], concluding a decade-long legal battle over the infringement of a Standard Essential Patent (SEP) in DVD technology.

What is an SEP? The Delhi High Court explained in this judgement that “an essential patent is one that discloses and claims an invention indispensable for practicing a given industry standard. The essentiality of a patent implies that it is technically impossible, based on normal technical practices and the available state of the art, to produce, sell, lease, or operate equipment or methods compliant with a standard without infringing upon the specific patent”.

Philips alleged that the suit patent (no. 218255) was one of the nine essential patents utilized in DVD production in India. The patent covered the Eight-to-Fourteen Modulation Plus (EFM+) coding technology which was claimed to be an essential component in DVD manufacturing, storage, and replication. Between May and September 2012, Philips filed the infringement suits alleging that the Defendants were unlawfully using their patented technology for large-scale DVD replication without obtaining a license.

Philips claimed that despite repeated communications urging the Defendants to obtain a license based on Fair, Reasonable, and Non-Discriminatory (FRAND) terms, the Defendants willfully did not secure a license. Notably, the Defendants were already in breach of a previous licensing agreement with Philips for their patented VCD technology.

The Defendants attempted to challenge the maintainability of the suits on various procedural grounds including lack of authorization and proprietorship of Philips over the suit patent. However, the Court dismissed the challenge by noting that procedural flaws alone cannot not derail substantive claims unless actual prejudice is proven.

Further, the Defendants contested the infringement claim and also challenged the validity of the suit patent on the grounds of lack of novelty, patent ineligibility under Sections 3(m) and (k), insufficient disclosure, and misrepresentation for obtaining registration. Following are the key arguments advanced by the parties on the validity of the suit patent and the observations made by the Court therein:

Section 8 Non-Disclosure & Revocation Under Section 64(1)(m)

The Defendants pointed out that Philips had not disclosed details of their corresponding patent applications to the Patent Office as required under Section 8, arguing that the suit patent was liable to be revoked under Section 64(1)(m). Philips acknowledged the omission but contended that the omission was unintentional and was a result of a photocopying error.  

Notably, at the interim stage, the Court ruled that the question of revocation under Section 64(1)(m) was to be decided at the stage of trial. The Defendant assailed this decision before the Division Bench [FAO(OS) 16/2014], however, their appeal was dismissed, with the Bench clarifying that revocation under Section 64(1)(m) is discretionary, not automatic, and hinges on whether the omission was intentional or a genuine mistake, something only trial evidence can establish. The Defendant’s subsequent appeal to the Supreme Court [SLP(C) 6615/2015] met the same fate.

After the conclusion of the trial, the Court found that Philips had provided all relevant details to its patent agent and, upon becoming aware of the lapse, in 2012, after the institution of the instant suits, Philips promptly corrected it by submitting before the Patent Office an affidavit enclosing full details. The onus was on the Defendants to prove fraud and demonstrate that the omission influenced the decision to grant the suit patent, which they failed to do. The Court noted that while the disclosure error should have been avoided, it did not constitute deliberate suppression. The Defendants could not show that the omitted information would have affected the patent grant, as the corresponding foreign applications remained valid and enforceable throughout. The Court remarked that, “given the dynamic nature of patent portfolios across multiple jurisdictions, the process of updating such records is inherently complex and subject to administrative oversight. A mere clerical or inadvertent error in updating foreign patent statuses, without any evidence of bad faith or intent to mislead, cannot be a ground for revocation.”. The Court also held that “non-disclosure must be deliberate and substantial enough to have impacted the decision to grant the patent”. The Court cited the U.S. ruling in Therasense, Inc. v. Becton, Dickinson & Co., which established the “but-for” materiality test, which states that withheld information is material only if the Patent Office would have refused the patent had it been disclosed.

Novelty & Anticipation (Revocation under Section 64(1)(e))

The Defendants argued that the suit patent lacked novelty and was anticipated by a U.S. patent owned by Sony which disclosed an 8-to-16-bit conversion process, allegedly similar to that claimed in the suit patent. However, the Court rejected this argument, highlighting that the suit patent introduced the EFM+ modulation technique that supported unambiguous decoding, which was absent in the Sony patent. The Court noted that for anticipation to be established under Section 64(1)(e), prior art document(s) must disclose every element of the claimed invention in the same arrangement and functionality. Since no prior art fully disclosed the claimed invention with the same structure, operation, and effect, the anticipation challenge failed​.  

Misrepresentation & Divisional Application (Revocation under Section 64(1)(j))

Notably, the suit patent originated from a divisional application and its parent application was subsequently deemed abandoned due to non-prosecution within the statutory timeline. The Defendants alleged that Philips had intentionally withheld information about the abandonment of the parent application while pursuing the divisional application. They also argued that the parent application claimed a single invention and, since it did not lack unity of invention, the divisional application should not have been allowed.

The Court ruled that the divisional application claimed a distinct invention without overlapping the claims of the patent application. The Court also found that Philips had duly disclosed the parent application during prosecution. Noting that abandonment due to efflux of time has no legal bearing on the validity of a divisional application, the Court held that Philips’ actions were in compliance with the law. The Court explained that abandonment was not a deliberate act of Philips, but a legal consequence of non-prosecution within the statutory timeline. The Court highlighted that there is no statutory mandatethat requires applicants to disclose the reasons for abandonment. The Court emphasized that to invalidate a patent under Section 64(1)(j), the burden of proof lies with the defendant to show intentional deception. Since the Defendants failed to establish fraudulent intent or misrepresentation, their contention was dismissed.

Insufficiency of Disclosure (Revocation under Section 64(1)(h) & (i))

The Defendants contented that the suit patent was not sufficiently disclosed. However, after a detailed review, the Court dismissed this claim, reaffirming that a patent cannot be invalidated merely due to imperfections in language or lack of technical refinement. The Court emphasized that patent law does not require exhaustive detailing of well-established scientific principles or routine design choices, because a person skilled in the art (PSITA) would naturally infer such aspects without undue effort. The Court further clarified that an application need not provide step-by-step instructions for implementing widely known components, as long as the disclosure, when read as a whole, enables a PSITA to replicate the invention without excessive experimentation. Since the subject method of the suit patent was fully reproducible and the Defendants failed to provide any evidence of difficulties in implementation, the Court dismissed the challenge under Sections 64(1)(h) and (i).

Non-Patentability Under Section 3(k) & 3(m) (Revocation under Section 64(1)(k) and (d))

The Defendants contended that the invention was ineligible for patent protection under Section 3(k) (for being a mere computer program) and Section 3(m) (for being a mental act). However, after examining the claims and technical details of the patent, the Court determined that the invention was not merely an algorithm or abstract idea. The Court noted that it provided a significant technical advancement in data modulation and storage. The Court further clarified that the claimed invention demonstrated industrial applicability and did not merely rely on software-based execution. Therefore, the Defendants’ challenge was dismissed​.

In the light of the foregoing, the Court upheld the validity of the suit patent. The Court further evaluated the following aspects:

Essentiality

Based on expert testimony, claim mapping, and technical analysis, the Court concluded that the suit patent was essential for any company involved in producing and replicating DVDs that meet industry standards. Therefore, the patent was recognized as an SEP.

SEP Infringement

The Defendants argued that they never performed the EFM+ modulation process covered by the suit patent directly; instead, they claimed that they relied on a mechanical replication process i.e. copying content from a licensed master DVD. However, after a detailed claim construction analysis, the Court determined that the patent was not limited to process claims but also included the physical product, the DVD, which stores the modulated signal generated using EFM+ coding. Applying the indirect test of infringement for an SEP, which requires first mapping the patent to the relevant standard to confirm its status as an SEP and then determining if the defendant’s product aligns with the standard, the Court affirmed that the Defendants’ products fell within the scope of the suit patent.

The Court also found inconsistencies in the Defendants’ pleadings. Notably, the Defendants had stated that their DVD manufacturing process involved two stages: (i) creating the glass master and stamper, and (ii) the replication process. They claimed that the first stage was outsourced to Moser Baer, an authorized licensee of Philips. However, in earlier pleadings, they had denied that Moser Baer had a valid license for DVD replication. This contradiction, coupled with the Defendants’ failure to prove that Moser Baer was authorized to produce stampers used for replication on their behalf, and the fact that the Defendants’ use of stampers anyway exceeded any license Moser Baer might have held, led the Court to conclude that the Defendants had infringed upon Philips’ patent.

The Court also found the Defendants responsible for the actions of Moser Baer under the principles of agency and vicarious liability. The Court noted that Moser Baer acted collaboratively with the Defendants in producing and replicating DVDs that used the patented technology. This collaboration meant that both parties contributed to the infringing outcome and were equally accountable under the principles of joint tort feasance.

Lifting the corporate veil

After examining the evidence, the Court pierced the corporate veil and attributed personal liability on the Director of the Defendant company. The Court noted that the Director actively authorized the infringing activities and engaged in fraudulent and deceptive conduct by falsely representing in pre-suit communications that DVD replication had ceased.

Damages & Interest on Compensation

The Court remarked that “the present cases reflect a textbook example of wilful infringement, where the Defendants not only had knowledge of the Suit Patent, but actively evaded compliance with their legal obligations”. The Court calculated the damages on the basis of lost royalties, aggravated damages, interest on compensation, and litigation costs.

• Calculation of Royalties Lost: The Court adopted a royalty-based damages model, with the following assumptions:
• Standard Royalty Rate: The Court relied on the royalty rate set in Philips’ Standard DVD License Agreement, fixing it at USD 0.03 per DVD.
• Estimating the Number of DVDs Replicated: The Defendants failed to disclose sales and revenue data, despite multiple Court directions. As a result, the Court applied the principle of adverse inference, relying on available information such as Moser Baer’s submission on the number of stampers sold to the Defendants, submissions made by the Defendants before the Registrar of Companies and promotional materials released by the Defendants. Since no direct evidence was presented on the number of DVDs replicated per stamper, the Court assumed that each stamper produced 10,000 DVDs.
• Interest on Damages; 12% Annual Rate: In addition to the lost royalties, the Court imposed a 12% interest rate on the damages amount, justifying it as a recognition of the time value of money.
• Aggravated Damages; Rupees 1 Crore: The Court imposed aggravated damages of Rupees 1 crore, citing the Defendants’ wilful infringement and misconduct during the trial.
• Litigation Costs: The Court ordered the Defendants to bear the litigation costs incurred by Philips. The Court acknowledged that defendants in legal proceedings are entitled to defend themselves, but in this case, the Defendants deliberately hindered the litigation process rather than engaging in substantive legal arguments.