In K K Bansal & Anr. Vs. Koninklijke Philips Electronics NV, the High Court of Delhi on 18 May 2026 in RFA(OS)(COMM) 17/2018 & 18/2018 delivered a detailed judgment by a Division Bench comprising Justices C. Hari Shankar and Om Prakash Shukla, partly allowing the appeals filed by K.K. Bansal and Rajesh Bansal against the judgment of the learned Single Judge dated 12 July 2018.
The dispute centered on Indian Patent IN 184753 held by Philips, claimed to be a Standard Essential Patent (SEP) for decoding technology used in DVD players. Philips alleged that the Bansals infringed the patent by manufacturing and selling DVD players without obtaining a licence. The Single Judge had held the patent to be an SEP, found infringement, and awarded royalty at FRAND rates along with punitive damages.
The Division Bench undertook an extensive analysis of SEP jurisprudence, essentiality, infringement (both direct and indirect tests), patent exhaustion under Section 107A(b), and FRAND obligations. While acknowledging the complexities involved in SEP litigation, the Court held that the Single Judge’s quantification of damages and royalty rates suffered from several infirmities, including insufficient evidence on FRAND compliance and mapping. The appeals were partly allowed and the damages awarded were set aside.
Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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Introduction
Standard Essential Patents (SEPs) occupy a unique position in patent law because they cover technologies that have become industry standards, ensuring compatibility across devices from different manufacturers. In a comprehensive judgment, the Division Bench of the Delhi High Court examined critical issues relating to SEPs, including their essentiality, proof of infringement, the doctrine of patent exhaustion, and the requirement of offering licences on Fair, Reasonable and Non-Discriminatory (FRAND) terms. The ruling provides important guidance on balancing the rights of patent holders with the need to prevent abuse of dominant market positions through patent pools.
Factual and Procedural Background
Koninklijke Philips Electronics NV (Philips) filed two commercial suits against K K Bansal (proprietor of Bhagirathi Electronics) and Rajesh Bansal (proprietor of Mangalam Technology). Philips alleged that the defendants were manufacturing and selling DVD video players that infringed its Indian Patent No. IN 184753 titled “Decoding device for converting a modulated signal to a series of m-bit information words.” This patent, granted on 13 February 1995, corresponded to US Patent 5696505 and European Patent EP 745254B1, which Philips claimed were recognised as SEPs for DVD technology.
Philips asserted that its patent was essential to the DVD standard set by the DVD Forum. It claimed willingness to license the patent on FRAND terms, but the defendants were unwilling licensees who continued to sell infringing DVD players without taking a licence. The suits sought injunctions and damages. During the pendency of the suits, the patent expired on 12 February 2015, rendering the injunction claims infructuous. A learned Single Judge of the Delhi High Court, by a common judgment dated 12 July 2018, held the patent to be an SEP, found infringement, and decreed the suits in favour of Philips, awarding royalty at specified FRAND rates along with punitive damages of Rs. 5 lakhs against Rajesh Bansal and directing an inquiry into the number of infringing players sold.
Aggrieved by the judgment, K K Bansal and Rajesh Bansal filed appeals before the Division Bench, which were reserved on 17 December 2025 and pronounced on 18 May 2026.
Dispute
The core dispute revolved around whether Philips’ patent was a valid SEP for DVD technology, whether the defendants’ DVD players infringed it, whether the doctrine of patent exhaustion applied because the defendants sourced components such as printed circuit boards (PCBs) containing the technology from authorised suppliers, and whether Philips had offered a FRAND licence. The defendants also challenged the quantification of damages and the award of punitive damages.
Reasoning and Analysis of the Judge
The Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla, with Justice Hari Shankar authoring the judgment, provided an extensive prefatory note on SEPs, drawing heavily from the Division Bench decision in Intex Technologies (India) Ltd v. Telefonaktiebolaget L.M. Ericsson (2015 SCC OnLine Del 1845 (DB)). The Court explained that SEPs require proof of a standard set by a recognised Standard Setting Organisation (SSO), essentiality of the patent to that standard through proper mapping, and a commitment by the patentee to license on FRAND terms.
The Bench analysed the nature of the invention in IN 184753, which relates to a decoding device converting 16-bit code words to 8-bit information words using a “look ahead” mechanism involving specific bit positions. It examined whether this technology was essential to the DVD standard and whether the defendants’ products infringed it, considering both direct and indirect tests of infringement as approved in the Intex case.
On the defence of patent exhaustion under Section 107A(b) of the Patents Act, 1970, the Court considered the defendants’ plea that they purchased chips/PCBs from authorised sources like MediaTek. The judgment discussed international exhaustion principles and their application to components incorporated in finished products.
Regarding FRAND, the Bench stressed that the patentee must demonstrate it is a willing licensor by making a specific, written FRAND offer and providing sufficient information for the prospective licensee to evaluate it. The Court referred to the CJEU decision in Huawei Technologies Co. Ltd v. ZTE Corp. (Case No. C-170/13) for the step-by-step protocol involving notice, offer, counter-offer, and security. The Bench found that the rates offered and the evidence led by Philips did not sufficiently establish that the terms were FRAND. It also held that royalty could not be calculated on the entire value of the DVD player but only on the smallest salable patent-practising unit.
The judgment cited several authorities including Microsoft Corporation v. Motorola Inc. (US Court of Appeals) on the value of standards and anti-competitive risks, and discussed claim-to-standard and claim-to-product mapping requirements under the Delhi High Court Patent Rules.
Final Decision of the Court
On 18 May 2026, the Division Bench allowed the appeals in substantial measure. While upholding certain findings on the technical aspects, the Court set aside the Single Judge’s quantification of royalty and the award of punitive damages, finding the evidence on FRAND compliance and damages insufficient. The Bench remanded aspects relating to actual damages for fresh consideration where necessary, while clarifying important legal positions on SEP litigation.
Point of Law Settled in the Case
The judgment reinforces that in SEP cases, the patentee bears a heavy burden to prove essentiality through proper mapping, infringement (directly or indirectly), and willingness to license on genuinely FRAND terms with adequate disclosure. It clarifies the application of patent exhaustion to imported components and emphasises that royalty should be based on the patent-practising unit rather than the entire end product. The ruling underscores the need for fair inquiry and evidence before awarding punitive damages or high royalty rates in SEP disputes.
Case Detail Title: K K Bansal & Anr. vs Koninklijke Philips Electronics NV Date of Order: 18 May 2026 Case Number: RFA(OS)(COMM) 17/2018 & RFA(OS)(COMM) 18/2018 Neutral Citation: 2026: DHC: 4317-DB Name of Court: High Court of Delhi Name of Hon'ble Judges: Hon'ble Mr. Justice C. Hari Shankar and Hon'ble Mr. Justice Om Prakash Shukla
Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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AdvocateAjayAmitabhSuman, IPAdjutor
Headnote: Delhi High Court Division Bench in appeals by K K Bansal and Rajesh Bansal partially allows challenges to Single Judge decree in Philips SEP suits concerning IN 184753, clarifies essentiality, infringement mapping, patent exhaustion for components, and strict requirements for proving FRAND offers while setting aside royalty and punitive damages quantification for want of sufficient evidence.
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