The Unified Patent Court, Nordic-Baltic Regional Division in Stockholm – No Security for Legal Costs Needed for a Non-EU Party with Adequate Assets and Willingness to Pay

2024-09-16:

20 August 2024, through the procedural order ORD_14940/2024, the Nordic-Baltic Regional Division of the Unified Patent Court (UPC), addresses a request for security for legal costs in an infringement action. The defendants, comprising six companies, sought an order requiring the claimant to provide security for the costs of the proceedings. The claimant, who is based in the United States, opposed the request.

Headnotes:

• • 1. Article 69.4 UPCA allows the court to order adequate security for legal costs on the defendant’s application.
  • 2. Rule 158.1 RoP specifies conditions under which the court may order such security, considering the financial position of the parties and enforceability of potential cost orders.

Defendants’ Request:

• • • The defendants argued that enforcement of any reimbursement claim for legal costs would be more difficult if not secured, primarily due to the claimant being based outside the European Union, specifically in the United States.
    • They cited legal uncertainty in the recognition and enforcement of UPC decisions by US courts, as there was no precedent.
    • The defendants contended that the claimant’s financial status was irrelevant given potential enforcement challenges in a non-EU country.
    • They suggested a security amount of EUR 800,000 based on the estimated value in dispute (EUR 3,000,000.00) or left it to the court’s discretion.

Claimant’s Position:

• • • The claimant asserted it had significant financial means to cover any adverse costs award, referencing its substantial sales and gross profit figures.
    • It argued that its non-EU location alone was insufficient grounds for ordering security for costs.
    • The claimant highlighted the defendants’ lack of evidence suggesting unwillingness to pay or enforcement difficulties in the US, where foreign judgments are routinely recognized and enforced.
    • The claimant deemed the requested security amount unreasonable and disproportionate.

Parties:

• • • Applicants/Defendants: Meril Life Sciences Pvt Limited, Meril GmbH, SMIS International OÜ, Sormedica UAB, Interlux UAB, and VAB-Logistik UAB
    • Respondent/Claimant: Edwards Lifesciences Corporation

Court’s Analysis:

• • • The court emphasized that imposing security for legal costs restricts the claimant’s right to an effective remedy and fair hearing, necessitating a balance between protecting the defendant and burdening the claimant.
    • The court found no indication that the claimant lacked assets or willingness to pay costs or that a UPC cost order would be unduly burdensome to enforce in the US.
    • The defendants’ concerns about enforcement difficulties due to the claimant’s US location and lack of precedent were deemed insufficient for ordering security.
    • The court dismissed the security application, finding the balance of interests favored the claimant.

Summary of the Decision: The application for security was dismissed. Costs related to the application will be addressed in the main proceeding. Leave to appeal was granted, permitting an appeal within 15 days of service of the order.

Conclusion: The court ruled against ordering security for legal costs, emphasizing the need for concrete evidence of enforcement difficulties and balancing the interests of both parties. The decision underscores the court’s commitment to ensuring fair access to legal remedies without undue burdens.

Text: Joakim Wihlsson
Källa: UPC:s hemsida