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Nordic-Baltic Regional Division
UPC_CFI_380/2023
Procedural Order
of the Court of First Instance of the Unified Patent Court
delivered on 20 August 2024
HEADNOTES:
Since the imposition of a security for legal costs constitutes a restriction of the right to an effective remedy before a court, the need to protect the defendant has to be weight against the burden on the claimant caused by an order to provide a security. There should be no unjustified interference with the claimant’s right to an effective remedy and to a fair hearing.
The fact that the Claimant is located in the United States and that we, for obvious reasons, still lack experience from enforcing orders by the UPC in the United States, is not in itself sufficient for ordering security for costs.
KEYWORDS:
Request for security for legal costs, Article 69.4 UPCA and Rule 158 RoP.
APPLICANTS/DEFENDANTS
1) MERIL LIFE SCIENCES PVT LIMITED - Bilakhia House, Survey No. 135/139,
Muktanand Marg, Chala - Gujarat 396191 - Vapi – IN
2) MERIL GMBH - Bornheimer Strasse 135 – 137 - D – 53119 - Bonn – DE
3) SMIS INTERNATIONAL OÜ - Harju maakond, Tallinn, Kesklinna linnaosa, Kaarli pst 9-1a -
10119 - Tallinn – EE
4) SORMEDICA, UAB - V. Kuzmos str. 28 - LT-08431 - Vilnius – LT
5) INTERLUX, UAB - Aviečių g. 16 - LT-08418 - Vilnius – LT
6) VAB-LOGISTIK, UAB - Laisvės pr. 60 - LT-05120 - Vilnius – LT
Represented by Andreas von Falck, Alexander Klicznik, Kerstin Jonen, Roman Wurtenberger, Lars-
Fabian Blume, Friederike Rohn and Beatrice Wilden
Order: ORD_14940/2024
Application: App_14061/2024
Action: ACT_582093/2023
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RESPONDENT/CLAIMANT
1) EDWARDS LIFESCIENCES CORPORATION - One Edwards Way - 92614 - Irvine,
California – US
Represented by Jens Olsson, Siddharth Kusumakar and Tessa Waldron
PATENT AT ISSUE
EP3769722
DECIDING JUDGES
This Order has been issued by the panel:
Presiding judge & judge-rapporteur Stefan Johansson
Legally qualified judge Kai Härmand
Legally qualified judge Mélanie Bessaud
Technically qualified judge Stefan Wilhelm
LANGUAGE OF THE PROCEEDINGS
English
SUBJECT-MATTER OF THE PROCEEDINGS
Infringement action
THE ORDER SOUGHT BY THE PARTIES
1. The Defendants have requested:
a) that Claimant be ordered to provide, within a time limit to be set by the Regional Division,
adequate security for the costs of the proceedings and other costs incurred and to be
incurred by Defendants which Claimant may have to bear;
b) that in the event that Claimant fails to provide adequate security within the specified time
limit, a default decision be issued.
2. The Claimant has requested that the security application be dismissed.
THE PARTIES’ SUBMISSIONS
3. The Defendants’ request for security is, inter alia, based on the following arguments.
4. Defendants fear that a potential enforcement of their claim for reimbursement of costs of
proceedings would be considerably more difficult if it was not secured by a security for legal
costs because Claimant has its seat outside the European Union (here: United States).
5. In the United States, a decision or order of the Court is not, as opposed to the situation in the
Contracting Member States, enforceable in accordance with Art. 82(1) sentence 1 UPCA, but
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its prior recognition is required. As there is, to the best of Defendants' knowledge, no
precedent precisely concerning the recognition of decisions and orders of the Court by US
courts, there is considerable legal uncertainty.
6. The fact that US courts have recognized foreign judgements and cost decisions in general in
the past cannot be to the detriment of the Defendants. Nor can be the fact that there was
obviously no experience with the recognition of the Court's decisions and orders by foreign
courts. In Defendants' opinion, the lack of experience in fact rather confirms the still existing
uncertainty which necessitates the ordering of security. For the same reason, Defendants can
obviously not "prove" difficulties with the recognition of the Court's decisions and orders in
the United States any further because no such case has yet been decided (be it affirmative or
negative).
7. Given the likelihood that a possible cost order may not be enforceable or enforceable only in
an unduly burdensome way, it does not matter in this context whether Claimant is wealthy. In
Defendants' view, the above circumstances justify the order to provide security for costs of the
proceedings even in such a case because the future enforcement of a decision may still become
necessary – and difficulties associated with the enforcement of a decision in a third (non-EU)
country may arise.
8. On the basis of Claimant's own estimate of the value in dispute (EUR 3,000,000.00), the
Defendants suggest that security be provided in the amount of EUR 800,000.00 in total, i.e. the
amount of the upper limit for recoverable costs in the first and second instance (see Article
1(3) of the Scale of ceilings for recoverable costs adopted by the Administrative Committee on
24 April 2023, according to which the ceiling shall be applied to each instance of the Court
proceedings). In the alternative, the Defendants leave the amount of the security to be
provided to the discretion of the Regional Division.
9. A security order would not be disproportionate in the present case, nor constitute an (undue)
burden. If the Claimant has sufficient financial means (which the Defendants cannot examine
themselves), the Claimant can – without any difficulty – provide the requested security,
especially as the requested amount is not unreasonably high.
10. The Claimant’s request for dismissal is, inter alia, based on the following.
11. There is no dispute that the Claimant has significant financial means to cover any adverse costs
award. In the fourth quarter of 2023 alone, the Claimant’s sales amounted to USD$1.53 billion
with a gross profit of approximately USD$1.18 billion
12. The mere fact that the Claimant is located outside of the EU cannot be considered a sufficient
reason to order for security for costs.
13. The Defendants have not suggested or put forward any evidence that the Claimant may be
unwilling to cover any adverse costs award, despite the Claimant and the First and Second
Defendants being involved in several international disputes over recent years.
14. The Defendants allege that there is a need for a security for costs order solely because the
Claimant is based outside of the European Union (i.e. in the United States), which supposedly
means that enforcing any costs order would be unduly burdensome. However, the Defendants
have not been able to point to any substantiation or evidence as to why the enforcement of
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orders of the UPC against the Claimant may be difficult to enforce. This cannot seriously be
expected in view of the US courts routinely recognising and enforcing judgments of foreign
courts.
15. Considering that there is simply no reason to order security for costs, it would be unjustified
to burden the Claimant by requiring it to make the necessary arrangements to provide security
for costs.
16. In any event, the Claimant submits that the EURO 800,000 amount of security requested by
the Defendants is unreasonable and disproportionate.
GROUNDS FOR THE ORDER
17. According to Article 69.4 UPCA, the Court may, on application by the defendant, 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 UPCA.
18. Rule 158.1 RoP specify that following a reasoned request by one party, the Court may – at any
time during proceedings – 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.
19. Factors to be taken into account when deciding whether to issue an order for security include
the financial position of the other party and/or the likelihood that a possible order for costs by
the UPC may not, or only in an unduly burdensome way, be enforceable. Whether and to what
extent such factors are present have to be determined based on facts and arguments put
forward by the parties.
20. Since the imposition of a security for legal costs constitutes a restriction of the right to an
effective remedy before a court, the need to protect the defendant has to be weight against
the burden on the claimant caused by an order to provide a security. There should be no
unjustified interference with the claimant’s right to an effective remedy and to a fair hearing.
It is for the party requesting a security order to provide facts and arguments as to why such an
order is appropriate in the specific case. (See e.g. Munich LD, UPC_CFI_514/2023, 23.4.2024).
21. In this case, there is no indication that the Claimant would lack assets or will to pay costs of the
proceedings and other costs incurred (or to be incurred) by Defendants, which the Claimant
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may have to bear. Nor is there any evidence suggesting that a possible order for costs by the
UPC would not, or only in an unduly burdensome way, be enforceable in the United States.
22. The fact that the Claimant is located in the United States and that we, for obvious reasons, still
lack experience from enforcing orders by the UPC in the United States, is not in itself sufficient
for ordering security for costs.
23. Consequently, the balance of interests is in favour of the Claimant. The application for security
shall be dismissed.
ORDER
24. The application for security is dismissed.
25. The costs of the applications will be addressed with the costs in the main proceeding.
INFORMATION ABOUT APPEAL
Leave to appeal is granted. The present order may be appealed within 15 days of service of this Order which shall be regarded as the Court’s decision to that effect (Art. 73.2(b)(ii) UPCA, rules 220.2 and 224.1(b) RoP).
Stockholm, 20 August 2024.
Stefan Johansson
Presiding judge and judge-rapporteur
Kai Härmand
Legally qualified judge
Mélanie Bessaud
Legally qualified judge
Stefan Wilhelm
Technically qualified judge
Mélanie,
Jeanne,
Lison
Bessaud
Digitally signed
by Mélanie,
Jeanne, Lison
Bessaud
Date: 2024.08.20
09:36:14 +02'00'
Stefan
Maria
Wilhelm
Digitally signed
by Stefan Maria
Wilhelm
Date: 2024.08.20
10:58:33 +02'00'
Kai HärmandDigitally signed by Kai Härmand
Date: 2024.08.20 21:25:50 +02'00'
Stefan Erik
Johansson
Digitally signed by Stefan Erik
Johansson
Date: 2024.08.20 21:44:31 +02'00'