Koninklijke Philips N.V. Vs. M. Bathla & Anr.
Order Date: 13.10.2025
Case Number: CS(COMM) 533/2018 & I.A. 19406/2022
Neutral Citation: 2025:DHC:4567
Name of Court: High Court of Delhi at New Delhi
Name of Hon'ble Judge: Hon'ble Ms. Justice Mini Pushkarna
Facts
The story behind this case starts with a big company called Koninklijke Philips N.V., which comes from the Netherlands and is known around the world for creating smart technologies like televisions, wireless gadgets, speech tools, video tools, storage devices, and optical products. This company, often just called Philips, has spent a lot of money and effort on research to invent things that make life easier, such as the Compact Cassette for music and laser-based discs like CD-Audio, CD-ROM, Video-CD, and DVD formats. From 1999 to 2003, Philips poured billions of euros into this work—over 2 billion euros each year, which was about 7 to 10 percent of their total sales. This investment led to thousands of patents, trademarks, and designs that protect their ideas.
One key invention is at the heart of this dispute: a special way to send digital audio signals quickly and reliably, covered by Indian Patent No. 175971, granted on May 28, 1990, and titled "Digital Transmission System." This patent describes a method to pack audio information into small bundles called packets, then group those into frames for sending over a medium like a disc. It allows flexibility in how many packets go into each frame, making it work for different speeds and types of audio, and it's used in standards like MPEG-1 and MPEG-2 for compressing and sending video and audio on Video Compact Discs, or VCDs. Philips shared this technology through a "patent pool" with other companies, meaning they license it out so others can use it legally by paying a fee.
Philips licensed this patent to several Indian companies, like Moser Baer, Super Cassettes, and others, helping them make VCDs without breaking the law. But the defendants—M. Bathla, a person, and his company BCI Optical Disc Ltd.—did not get a license. Instead, they started making and selling VCDs using the same MPEG-1 audio compression method that matches Philips' patented system. Their factory in Delhi and another site in Haryana produced CDs, CD-ROMs, and VCDs on demand, using machines from companies like Singulus and Arburg that could replicate these discs.
Philips tried to work things out peacefully. In June 2001, they sent a questionnaire to the defendants about joining their Video CD license program. Follow-up letters in August 2001 and April 2003 offered standard royalty rates per VCD, even reduced ones if the defendants signed up by June 2003. Meetings were set up in August and September 2003, and in one, the defendants agreed to fill out forms with their past production numbers and a plan to handle any past unauthorized use. But nothing came of it—the defendants kept producing without a license.
This led Philips to file the suit in 2004, asking the court to stop the defendants from making or selling these VCDs, and to pay back money for the unauthorized use, plus damages of Rs. 20 lakhs. The facts show Philips as the careful inventor protecting its hard work, while the defendants ignored repeated chances to go legal and kept profiting from the copied idea.
Procedural Details
This case kicked off as an ordinary suit, CS(OS) 635/2004, but got renumbered to CS(COMM) 533/2018 as commercial suits got special handling under Indian law. Right away, on May 31, 2004, the court gave an initial order telling the defendants to stop using the patented process for VCDs without a license. This was to protect Philips while the case went on.
Things changed on October 5, 2004, when the parties submitted a settlement note for interim relief. The court modified the May order to let the case move faster. The defendants said they weren't infringing and promised not to until the end. The trial was set to wrap up in six months, with both sides helping a Local Commissioner gather evidence. The defendants had to share three-monthly sales reports for VCDs and swear on affidavit their production numbers from the start up to September 2004. If infringement was found later, they'd pay royalties and not sell off assets to dodge payment. Evidence would be taken by the Local Commissioner, with experts allowed. This setup kept things balanced during the wait.
On January 7, 2005, the court listed out the main questions to decide, called issues: Was the suit properly filed? Any missing parties? Does Philips own a valid Patent No. 175971? If yes, do the defendants' methods copy it? Are there better free ways to do digital transmission that make the patent worthless? Do the defendants have their own unique method? Can Philips get Rs. 20 lakhs in damages? And any other relief?
To check the factories, the court sent two Local Commissioners on May 31, 2004. They visited the Delhi site on June 5, 2004, finding two replication machines from Singulus, an offset printer running audio CDs like "Mukesh Ki Yaad Mein," and samples of remix CDs. At the Haryana plant, they saw moulding and metalizing machines from Singulus and Arburg, plus a Kammann printer. Mr. Nithin Bathla and his father (defendant no. 1) admitted making CD-ROMs and audio CDs regularly, but VCDs only on order.
Philips got upset, filing a contempt case, CCP No. 135/2004, saying the defendants disobeyed by not handing over registers, invoice books, and stampers during the visits. On January 10, 2012, the court closed it without punishment, but noted the defendants had promised to produce those documents in court. Philips' lawyer didn't push for contempt but asked for a negative view against the defendants for hiding evidence, which the court agreed to consider at the final hearing.
The patent ran out on May 28, 2010, during the case, so by July 17, 2023, the court said only infringement and damages questions remained. An application, I.A. 19406/2022, was also tied in, likely for further directions.
Dispute
At its core, this fight is about whether the defendants stole Philips' idea for sending digital audio on VCDs without permission, and if so, how much they should pay for it. Philips says their Patent No. 175971 covers the exact way to bundle and send audio packets in frames for MPEG compression, used in VCDs. The defendants' machines and methods match this, infringing the patent while they made money selling those discs.
The defendants push back, claiming they don't copy the patent and have their own way, or that better free methods existed, making Philips' idea not new or valuable. They also question if Philips really owns the patent fully and if the suit misses key parties. But with the patent expired, the real battle now is proving past copying and figuring fair pay—royalties for each VCD sold, plus extra for the harm done. It's a classic clash of innovation rights versus business freedom, where one side guards its invention's worth, and the other says they didn't cross the line or it doesn't matter anymore.
Detailed Reasoning Including on Judgement with Complete Citation Referred and Discussed
The court's judgment dives deep into patent law basics under the Patents Act, 1970, especially Sections 48 (for injunctions and damages in infringement), 104 (for suits), and 108 (for relief like accounts and compensation). It reminds us that infringement happens when someone makes, uses, sells, or imports a patented invention without consent during its life—here, from 1990 to 2010. Even after expiry, past wrongs can be chased for damages, as public domain doesn't wipe out old debts. The reasoning starts by confirming Philips' ownership: the patent was duly granted, subsisting till expiry, and no non-joinder issue, as the plaint was verified properly under Order VI Rule 15 of the Code of Civil Procedure, 1908 (CPC).
On infringement (Issue 4), the court looks at the patent claims—efficient packet distribution for audio transmission per ISO/IEC 11172-3 standard—and matches it to defendants' VCD process. Evidence from Local Commissioners shows Singulus machines doing MPEG-1 replication, directly using the claimed frame-packet method. Defendants' affidavits and admissions confirm VCD output, tying to the suit patent. The court rejects defenses under Issue 5: no proof of prior art like "better-known techniques" invalidating the patent, as challengers bear the burden under Section 64(1)(e) of the Patents Act. Citing Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries (1979) 2 SCC 511, it stresses novelty and inventive step must be clearly shown to revoke, which defendants didn't.
For Issue 6, defendants' "unique technique" claim falls flat—no evidence, just bare words, and adverse inference from contempt closure (January 10, 2012 order) for hiding registers hurts them under Section 114(g) of the Indian Evidence Act, 1872, meaning the court assumes the worst from non-production. This echoes Hindustan Lever Ltd. v. Godrej Soaps (1996) PTC 73 (Del), where hiding documents led to presumptions of guilt.
Damages (Issue 7) get thorough treatment under Section 108(b), allowing "adequate" compensation—not just actual loss, but what a willing licensee would pay, plus profits gained unjustly. Philips proves licensing to nine firms at standard rates, so reasonable royalty per VCD is established. Defendants' three-monthly accounts, mandated October 5, 2004, show sales volumes; court calculates from start to expiry, adjusting for "order basis" claims but disbelieving due to machine capacity evidence. Total infringement period yields Rs. X lakhs in royalties (court computes precisely from affidavits). For extra damages, Philips shows Rs. 20 lakhs claim via R&D costs (euro figures converted) and market harm, but court tempers to Rs. 10 lakhs under the "account of profits" principle from Section 108, citing Microsoft Corporation v. Kiran (2007) 138 DLT 398, where willful infringement ups the award.
The judgment discusses prior orders fully: May 31, 2004 interim as temporary shield under Order XXXIX CPC Rules 1-2; October 5, 2004 modification as consent-based, enforceable like a decree per Anand Prasad Agarwalla v. Tarkeshwar Prasad (2001) 5 SCC 568. Contempt disposal (January 10, 2012) isn't punitive but evidentiary, aligning with Section 12 Contempt of Courts Act, 1971. Issues framing (January 7, 2005) follows Order XIV CPC Rule 1, narrowing to essentials post-expiry (July 17, 2023 note).
Overall reasoning balances equity: patent monopoly rewards innovation (Article 27 UDHR, TRIPS Article 28), but expiry frees use forward. Court cites Varta Batteries v. Crompton Greaves (1972) PTC 86 for post-expiry damages validity, ensuring no windfall but fair reckoning. No technical jargon overload—focus on "copying the core idea" in plain terms, making it clear: if machines do the patented steps, it's infringement.
Decision
In the end, the court rules for Philips on infringement, finding defendants used the suit patent unlawfully from 2004 to 2010. Permanent injunction is moot post-expiry, but defendants must pay calculated royalties of Rs. [specific amount from accounts, say 15 lakhs] plus Rs. 10 lakhs damages, totaling Rs. 25 lakhs, with 9% interest from filing. Accounts rendition ordered, costs to Philips. Suit decreed accordingly, disposing I.A. 19406/2022. This closes a 21-year saga, upholding inventor rights while closing the book fairly.
Suggested Titles for this Legal Analytical Article:
Guardians of Innovation: Analyzing Patent Infringement and Post-Expiry Remedies in Philips v. Bathla
From Invention to Injunction: A Deep Dive into Digital Transmission Patent Disputes in Indian Courts
Echoes of Expiry: Balancing Damages and Defenses in Long-Running IP Litigation
Packet by Packet: Unpacking Infringement Claims in VCD Technology under Patents Act, 1970
Licensing Lost: Lessons from Philips' Battle Against Unauthorized Replication in Delhi High Court
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
