Rule 158 – Security for costs of a party

1. At any time during proceedings, following a reasoned request by one party, the Court may order the other party to provide, within a specified time period, adequate security for the legal costs and other expenses incurred and/or to be incurred by the requesting party, which the other party may be liable to bear. Where the Court decides to order such security, it shall decide whether it is appropriate to order the security by deposit or bank guarantee.

2. The Court shall give the parties an opportunity to be heard before making an order for security. Rule 354 shall apply to the enforcement of the order.

3. The order for security shall indicate that an appeal may be lodged in accordance with Article 73 of the Agreement and Rule 220.2.

4. The Court shall, when specifying the time period in paragraph 1, inform the party concerned that if the party fails to provide adequate security within the time stated, a decision by default may be given, in accordance with Rule 355.

5. If a party fails to provide adequate security within the time stated, the Court may give a decision by default pursuant to Rule 355. 

Relation with the Agreement: Article 69(4).

Case law

IPPT20240521, UPC CFI, LD Paris, ARM v ICPillar
Security for costs of € 400.000 ordered because of potential inability for Claimant to cover the legal costs in case of losing (Article 69(4) UPCA, Rule 158(1) RoP). Factors to be considered when ordering a security order include the financial position of the other party that may give rise to a legitimate and real concern that a possible cost order might not be recoverable and/or the likelihood that a possible cost order by the UPC may not, or in an unduly burdensome way, be enforceable. In the present case, there are no exceptional circumstances that would be considered as unduly burdensome to justify the order. Nor does the mere fact that the Respondent is domiciled in the United States of America justify an order for security for costs. Potential risk of inability to cover the legal costs of the other party in case of losing the litigation. Respondent in its written comments did not provide any indication of its financial situation. Insurance taken out to cover the financial risks is insufficient for two reasons. Firstly, the purpose of this type of insurance is to provide a financial protection for ICPILLAR (the insured party), and not to protect the potential rights of the ARM entities (the applicants of the Security for cost request). Secondly, the full terms of the said insurance have not been disclosed and it is hence unclear what are the actual terms of the insurance.

IPPT20240514, UPC CFI, LD Hamburg, Ballinno v UEFA
Insolvency risk of the plaintiff is the relevant factor for security for costs of a party, not enforcement not enforcement risk in case of an EU domiciled plaintiff (Article 69(4) UPCA, Rule 158(1) RoP). Claimant to provide security for the legal costs of the Defendants in the (total) amount of € 56.000. As the starting point the undisputed facts point into the direction of the argument of the defendants that there is a risk of insolvency of the claimant when it comes to the reimbursement of the costs of the present proceedings. […]. In the present case the Panel has especially considered that the patent in suit was not only just recently assigned to the claimant, but that the transfer was performed months after the assignor entered into a pre-trial correspondence about a possible patent infringement with the defendants 2) and 3). This raises the concern that the purpose of this transfer might be to facilitate this litigation without any financial risk to applicant. 

IPPT20240430, UPC CFI, LD Düsseldorf, 10x Genomics v Curio Bioscience
No security for legal costs of Defendant in urgent proceedings (Article 69(4)) UPCA, Rule 158 RoP, Rule 211.1(d) RoP).

IPPT20240304, UPC CFI, LD The Hague, Plant-e v Arkyne
Possible for the parties by mutual agreement to establish an “attorneys’ eyes only’’ restricted-access group for confidential information and exclude access by a natural person from each party, provided that fair trial is not affected. (Article 58 UPCA, Rule 262A RoP, Article 9 Trade Secret Directive). Principle of fair trail not likely to be impaired where the confidential information is a side issue (providing security for costs of a party, Rule 158 RoP). Confidential Information:non-public financial information concerning sales and investments is information that is generally considered to be confidential, especially vis-à-vis a competitor.

IPPT20240213, UPC CFI, LD The Hague, Plant-e v Arkyne
Defendant’s request for security for costs (“cautio iudicatum solvi”) rejected (Article 69(4) UPCA; Rule 158 RoP, Article 24 UPCA). Protecting the rights of the defendant should be balanced against the right of the claimant to enforce its patent rights. The main rationale for the cautio is to secure the enforceability of a potential cost order. If such order is directly enforceable after it is granted, it can serve as grounds not to allow a cautio at the start of or during the proceedings. UPC decisions and orders are directly enforceable in the Netherlands in accordance with Art. 82 UPCA, Art. 71d Brussels and R. 354.1 RoP. A cautio in this case is hence not justified because of the risk that a possible cost order in favour of Bioo will not be directly enforceable. This contrasts with the situation decided by the CD Munich [IPPT20231030]  – [....] – on which Bioo relies. In that case the relevant claimant was domiciled outside the EU and no treaty regarding the execution of judgments was in place. As a rule, the court finds that a cautio based solely on (expected) material unenforceability should be awarded in exceptional circumstances only. The court agrees that under the circumstances in the present situation, which involves two competing SMEs with limited finances, the financial strain on the claimant can be a serious impediment to enforcement of its rights and to access to justice, and hence for granting a cautio. Lastly the court takes into consideration that according to Dutch national procedural law it is not possible to give a cautio vis-a-vis plaintiffs domiciled or residing in the Netherlands (and hence in the EU) under any circumstances, and also if there is good reason to doubt the possibility of recovery of a potential cost order due to the financial situation of the claimant.

IPPT20231030, UPC CFI, CD Munich, Nanostring v Harvard

Order to provide security for legal costs and other expenses pursuant to Rule 158.1 RoP to the amount of EUR 300,000. Additional (procedural) burden and uncertainty on the party seeking to enforce a UPC (cost) judgement in the UK compared to other (EU) jurisdictions. This is a factor that weighs in favour of ordering a security. Legitimate concern that the Claimant will not have adequate financial means to cover the legal expenses that it may be liable for. Submitted that the injunction ordered in other case by Munch Local Division would be “existence-threatening”. Claimant has not provided any information as to its own, independent, financial position nor has it pointed at any of its own assets that could be suitable for redress should it be liable for any legal costs. Instead, it relies solely on the cash position of its group of companies. The group, however, in its own words, has never been profitable and therefore relies on money from investors.

IPPT20231020, UPC CFI, LD Helsinki, AIM Sport Vision v Supponor

No security for costs (Rule 158 RoP). No sufficient evidence of  risk of insolvency and evidence indicates that the Applicant will have the financial means to cover any potential legal costs. Not appropriate for the Court of First Instance to order security for the costs of potential future proceedings in the Court of Appeal.

IPPT20230929, UPC CFI, LD Munich, Edwards Lifesciences v Meril

No security for the legal costs and other expenses (Rule 158 RoP) ordered. It requires a showing that the financial circumstances of the other party give rise to fears that any claim for reimbursement of costs cannot be served or that, despite sufficient financial resources, enforcement of a decision on costs appears to be impossible or fraught with particular difficulties. In the United States of America, judgments of foreign courts and the associated cost decisions can generally be recognised and enforced. It has not been submitted or is otherwise apparent that this could be different with decisions and orders of this court or is seriously to be expected. Such a request cannot be made the subject of Preliminary objection (Rule 19 RoP). The possible subjects of a Preliminary objection are exhaustively listed in Rule 19(1) RoP. Motions pursuant to Rule 158(1) RoP are not listed. 

IPPT20230828, UPC CFI, LD Helsinki, AIM Sport Vision v Supponor
Procedural order in main proceedings and provisional measures proceedings concerning issues to be addressed in written submissions, invitation to an oral hearing in front of the whole panel, including a technically qualified judge, and instructions regarding oral hearing.