Unified Patent Court
Einheitliches Patentgericht
Juridiction unifies, du brevet

Paris Local Division
UPC_CFI_495/2023
Procedural Order
of the Court of First Instance of the Unified Patent Court
delivered on 21/05/2024
concerning Security for Costs

APPLICANTS
ARM Limited
110 Fulbourn Road
CB1 9NJ - Cambridge - GB
Apical Limited
110 Fulbourn Road
CB1 9NJ - Cambridge - GB
Arm France SAS
Batiment B - 732 Avenue de Roumanille
06410 - Biot - FR
Arm Germany GmbH
Bretonischer Ring 16
85630 - Grasbrunn - DE
Arm Germany d.o.o
Obrtna Cesta 18
SL-8310 - Sentjernej - SI
Arm lreland Limited
Lyrr Building, 3, Mervue Business Park Galway
Co. Galway - Galway - IE
Arm Poland Sp. z.o.o
UL. ŻELAZNA 2
40-851 - KATOWICE, ŚLĄSKIE - PL
Arm Sweden AB
Emdalavagen 6
SE-223 69 - Lund - SE
Simulity Labs Limited
110 Fulbourn Road
CB1 9NJ - Cambridge - GB
SVF Holdco
69 Grosvenor Street
W1K 3JP - London – GB
Represented by Christoph Crützen
RESPONDENT
ICPillar LLC
4265 San Felipe Street, Suite 1100
77027 - Houston, Texas – US
Represented by Lionel Martin

PATENT AT ISSUE
Patent no. Proprietor
EP3000239 ICPillar

DECIDING JUDGES

COMPOSITION OFPANEL– FULLPANEL
Presiding judge and Judge-rapporteur Camille Lignieres
Legally qualified judge Carine Gillet
Legally qualified judge Petri Rinkinen

LANGUAGE OFPROCEEDINGS: English

ORDER
Summary of facts and procedure
On 22 December 2023, ICPILLAR (Claimant in the main proceedings, Respondent in this this Secu-rity
for cost application) brought an infringement action against ARM’s entities (Defendants in the
main proceedings, Applicants in this Security for cost application, hereinafter also ARMs or ARM
entities) based on European patent EP 3 000 239 (EP’239) before the Paris Local Division of the
Unified Patent Court (UPC).
Defendants filed via an email due to technical issue with the CMS a Statement of Defence and a
Counterclaim for Revocation.
On 26 April 2024, ARMs filed an application for security for legal costs in this proceeding pursuant
to Article 69(4) of the UPC Agreement (UPCA) and Rule 158.1 of the Rules of Procedure (RoP).
In the present application, ARMs (Applicants) are requesting that ICPILLAR (Respondent) is ordered
to provide security for legal costs and other expenses in the amount of 800.000 euros within 6
weeks of date of service, by security deposit, or alternatively, by bank guarantee provided by a
bank licensed in the EU, at the Court’s discretion.
The Applicants submit that:
-First, Respondent’s financial position is questionable, given that there are no public records about
Respondent's assets, which raises a legitimate concern as to whether Respondent would have as-sets
sufficient to cover a future costs order;
-Second, even assuming that Respondent has sufficient assets to cover a future costs order, en-forcement
would be unduly burdensome given that Respondent has connections to three different
states in the United States (Texas, California, Delaware).
In response, ICPILLAR argues that:
-First, there is no risk that the Claimant will not be able to pay the costs of the proceedings if the
case is dismissed by the Court as ICPILLAR has taken out a corresponding insurance policy to assure
that a reimbursement of procedural costs due to ARMs for this UPC case will be covered and will
not endanger ICPILLAR’s economical standing.
The Respondent also argues that asking for security for costs in addition to this specific insurance
will be a limitation to the right of effective remedy before a tribunal (Art. 47 of the EU Charter of
Fundamental Rights), and it will not be in respect of the principle of proportionality.
-Second, the enforcement of a potential cost order would not be unduly burdensome, as the en-forcement
in the United States can generally be recognized and enforced in the United States as
the UPC Munich LD has already stated. ICPILLAR adds that they may be validly served with process
before a Delaware state court for obtaining an exequatur judgement by delivering a copy of said
process.
Furthermore, ICPILLAR argued that in case a bank guarantee is ordered, also a bank guarantee
from a bank licensed in the United States should be accepted.
Legal grounds
Article 69(4) UPCA states that “At the request of the defendant, the Court may order the applicant
to provide adequate security for the legal costs and other expenses incurred by the defendant
which the applicant may be liable to bear, in particular in the cases referred to in Articles 59 to
62.”
Pursuant to R. 158.1 Rop, the Court may, at any stage of the proceedings, upon a reasoned request
from one party, order the other party, within a specified period, to provide adequate security for
the costs of the legal proceedings and any other costs incurred and/or yet to be incurred by the
requesting party, which the other party may be required to bear. Before such an order is issued,
the parties must be given the opportunity to be heard (R. 158.2 RoP). If the party affected by the
order fails to comply with such an order, a decision by default may be issued against them.
When considering the assessment of security for costs, the Court shall take into account the main
principles set out in the UPCA as regards to the Claimant’s rights to an effective remedy and to a
fair hearing and the principles set out in the RoP’s Preamble, in particular the principle of propor-tionality

Grounds in the present case
Central Division Munich has on its order delivered on 30 October 2023 (UPC_CFI_252/2023) given
the following reasoning:
“The Court has the discretion to order a security for legal costs and other expenses. 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. Imposing a security for legal costs serves to protect the position and (poten-tial)
rights of the Defendant.
This has to be balanced against the burden for the Claimant caused by an order to provide security.
There should not be an unjustified interference with the right to an effective remedy and to a fair
hearing. The Court must weigh the relevant facts and circumstances “.
This panel agrees with the reasoning above.
On the criterion of difficulties in enforcing the decision:
The risk of enforcement in the United States is not decisive in this case, as the place of registration
of the company and the address of its main office are clearly indicated and not disputed.
In addition, the Court did not identify any particular difficulties in enforcing the UPC's decision in
the United States of America, even if it has to be done in different states of the USA. As it has
already been stated by the UPC Munich Local Division: “In the United States of America, judgments
of foreign courts as well as associated cost decisions can in principle be recognised and enforced.
That this could be different with decisions and orders of this court or that this is seriously to be
expected is neither submitted nor otherwise evident.” (UPC_CFI_15/2023 (LD Munich) Order of
29/09/2023). Even the Applicants noted in their application that” it is true that judgments of for-eign
courts and the associated cost decisions can generally be recognized and enforced in the
United States.” (point 21 of the Application)
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.
On the criterion of the claimant's financial situation:
The criterion of the claimant's financial situation is decisive for the Court when it has to decide
whether or not to order the security for the legal costs. The essential risk is that the lack of financial
resources to pay the successful party's costs, which are to be borne by the losing party, may lead
to a situation where the costs ordered cannot in reality be collected.
Applicants submitted that there are no public records about Respondent's assets and financial sit-uation.
They rightly pointed out that ICPILLAR presented itself in the statement of claim as a com-pany
founded in January 2021 by the inventor of the patent at issue, Mr. Seidner, and that ICPIL-LAR’s
only income was from the licensing of its patents. The official documents submitted did not
provide any information about ICPILLAR's financial situation or its current assets.
Respondent in its written comments did not provide any indication of its financial situation.

The Court therefore considers that we are in a situation of a potential risk of inability to cover the
legal costs of the other party in case of losing the litigation, taking into account the value of the
case, even if this amount is disputed, being declared by the Claimant at 18,000,000 EUR and hence
leading to ceiling of the legal costs for the amount of EUR 1,200,000.
The only response from ICPILLAR has been to provide an insurance broker's declaration that ICPIL-LAR
has required an insurance that will cover to ICPILLAR the legal costs of the opposing party in
this litigation up to the amount of EUR 800,000 in case ICPILLAR would be obliged to cover such
costs (Exhibit 1-ICPILLAR-declaration of Mohsin Patel).
The main question in this context is therefore whether the insurance taken out by the Respondent
to cover the financial risks in this case is sufficient and would prevent it from being required to
provide the security for costs as provided for in R. 158 RoP.
The insurance broker's declaration is not sufficient to justify that the legal costs can be recovered
from it by ARM for two reasons. Firstly, the purpose of this type of insurance is to provide a finan-cial
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 insur-ance
have not been disclosed and it is hence unclear what are the actual terms of the insurance.
On the amount and modalities of the Security:
Concerning the amount of the Security, ARM entities submitted in their Security for costs applica-tion
that the ceiling for recoverable costs (based on the value of the action declared by the claim-ant
at the amount of 18,000,000 EUR) would be 1,200,000 euros. However, the value of the case
and hence the ceiling for legal costs has not been decided by the Court at this stage of the pro-ceedings.
The Respondent has argued that the value of the case due to certain events after the
statement of claim was lodged have caused the value of the case to drop to EUR 15,000,000 in
which case the ceiling for costs would be EUR 800,000. Therefore, setting the amount of the Secu-rity
at one third of the presumed maximum amount, i.e. EUR 400,000, as proposed by the respond-ent
in its subsidiary submissions, appears as a reasonable and proportionate at this stage. As the
Munich CD has already noted, “should an additional security be required at some point in time in
view of the actual costs (to be) incurred in these proceedings, the Defendant can request an addi-tional
“security” at any time during the proceedings (Rule 158.1 RoP)”. (UPC_CFI_252/2023 (CD
Munich)- Order of 30/10/2023)
In order to guarantee the secure recovery of the legal costs potentially due to ARM entities, which
are all based in Europe and most of them in the EU, a bank guarantee by a bank licensed to operate
in EU must be provided. The Respondent’s request to approve also a guarantee from a bank li-censed
to operate in the United States of America is dismissed but at the same time the Court
notes that there are banks that are licensed to operate in EU and in the United States of America
and hence this dismissal is not unreasonable even in case of a Respondent who is domiciled in the
United States of America.
For all these reasons, it does not appear that a deposit or bank guarantee of EUR 400,000 consti-tutes
an unjustified interference with the right to an effective remedy and to a fair hearing.
Consequently, the application for the Security costs shall be admitted for the amount of 400,000
euros.

ORDER
For these grounds, having heard the parties, the Court:
- Orders ICPILLAR to within six weeks of the date of service of this order provide security for legal
costs and other expenses pursuant to Rule 158.1 RoP to the amount of EUR 400,000 (four hundred
thousand euro) by way of deposit on the UPC account dedicated for security deposits, alternatively
by way of bank guarantee provided by a bank licensed in the EU, to be chosen by ICPILLAR.
- An appeal may be brought against the present order within 15 calendar days of its notification to
the unsuccessful party pursuant to Art. 73(2)(a) UPCA and Rule 220.2 RoP.

Delivered in Paris, on 21 May 2024.

C. Lignieres, Presiding judge and Judge-rapporteur
C. Gillet, Legally qualified judge
P. Rinkinen, Legally qualified judge

ORDER DETAILS
Order no. ORD_23494/2024 in ACTION NUMBER: ACT_596432/2023
UPC number: UPC_CFI_495/2023
Action type: Infringement Action
Related proceeding: Application no. 22767/2024
Application Type: Application for Security for costs (R. 158.1 RoP)