Central Division
Paris Seat

ORDER
of the Court of First Instance of the Unified Patent Court
Central division (Paris seat)
issued on 27 September 2024
concerning the generic procedural application No. App_42517/2024
lodged in the proceedings UPC_CFI_164/2024

HEADNOTES: 1. The Court may order a security for legal costs when the financial position of the
respondent gives rise to a legitimate and real concern that a possible order for costs may not be
recoverable and/or the likelihood that a possible order for costs by the Unified Patent Court may
not, or in an unduly burdensome way, be enforceable.

KEYWORDS: security; costs; burden of proof.

APPLICANT:
Microsoft Corporation - One Microsoft Way - 98052-6399 - Redmond -
Washington - US
represented by Tilman Müller-Stoy and Nadine Westermeyer, Bardehle Pagenberg

RESPONDENT:
Suinno Mobile & AI Technologies Licensing Oy - Fabianinkatu 21 - 00130 - Helsinki - FI
represented by

PATENT AT ISSUE:
European patent n° EP 2 671 173

PANEL:
Panel 2
Paolo Catallozzi Presiding judge and judge-rapporteur
Tatyana Zhilova Legally qualified judge
Wiem Samoud Technically qualified judge

DECIDING JUDGE:
This order is issued by the panel.

SUMMARY OF FACTS AND PARTIES’ REQUESTS:
1. On 25 July 2024 the applicant filed an application (registered as No. App_42517/2024) requesting
that the respondent be ordered to provide security for the legal costs and other expenses incurred
and/or to be incurred by applicant in the amount of at least EUR 800,000.00, alternatively of EUR
600,000.00, with regard to the infringement action registered as No. ACT_18406/2024
UPC_CFI_164/2024.
2. The applicant, defendant in the infringement action, argued that there is the highest possible
insolvency risk for respondent, as its financial background and its ability to bear the legal fees are
non-existent and it lacks substantial assets to adequately secure reimbursement of the litigation
costs.
3. The respondent, asked for written comments, requested that the application is rejected and if it is
decided that the parties need to secure the liabilities to one another, requested that both parties
are treated equally and, therefore, that the applicant issues Bank Deposit Security or Bank guarantee
as well.

GROUND FOR THE ORDER:
Reasons for a security order.
4. According to Article 69 (4) of the Unified Patent Court Agreement (‘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”.
5. The phrase “in particular” means that the cases referred to in Articles 59 to 62 are not limiting
examples, so that security may also be ordered in other cases, such as in the main infringement
proceedings.
6. Further confirming this consideration, Rule 158 (1) ‘RoP’ states that the Court may order
adequate security “at any time during proceedings”, using a general expression - “proceedings”
- which certainly includes proceedings on the merits to ascertain patent infringement (see
Munich LD, order of 23 April 2024, UPC_CFI_514/2023).
7. The Court has the discretion to order a security for legal costs and in exercising its discretion
must determine whether the financial position of the respondent gives rise to a legitimate and
real concern that a possible order for costs may not be recoverable and/or the likelihood that a
possible order for costs by the Unified Patent Court may not, or in an unduly burdensome way,
be enforceable (see, also, CoA, order of 17 September 2024, UPC_CoA_221/2024; see CoA, order
of 26 August 2024, UPC_CoA_328/2024).
8. The burden of substantiation and proof is on the party filing the request, but once the reasons
and facts in the request have been presented in a credible manner it is up to the claimant to
challenge these reasons and facts and in a substantiated manner, especially since that party will
normally have knowledge and evidence of its financial situation, and to argue why a security
order would unduly interfere with its right to an effective remedy (see the aforementioned CoA,
order of 17 September 2024, UPC_CoA_221/2024).
9. In the current situation, the applicant argues that respondent is a limited company which was
registered on 10 September 2023, not even 7 months before the present infringement action
was filed, its managing director and board member is who controls 100%
of the company’s shares, has no further employees other than
10. The applicant assumes that since the respondent’s business model is exclusively characterized
by the enforcement of patents, namely the patent-in-suit, and asserting corresponding license
claims, the respondent does not generate sufficient income or other cash flow. Furthermore,
since the respondent was founded only a few months ago, its business will not operate profitably
or even generate any significant cash flow.
11. Lastly, the applicant points out that the respondent has no equity capital at all, does not maintain
any other business, let alone has any physical assets, and does not even have an own office
space.
12. While the applicant sufficiently substantiated its allegations by submitting the correspondent
publicly available financial information (see, in particular Exhibits BP31a and BP32), the
respondent did not challenge these allegations, let alone provided any documentation to
contradict the evidence presented by the applicant. Indeed, the respondent has simply
reaffirmed the legitimacy of its claim and the infringement perpetrated by the applicant without
addressing the specific facts asserted by the applicant for the purpose of the request of the
security order.
13. On the basis of the information provided by the applicant, which was not disputed, it is credible
that the respondent’s financial situation gives rise to a legitimate and real concern that a possible
order for costs may not be recoverable. Under those circumstances, the respondent failed to
provide further information on the availability of further assets to comply with a possible cost
order. It follows that it may be assumed that the respondent does not have financial resources
to cover a possible order for reimbursement of legal costs.
Amount of the security.
14. The applicant requested the security for the legal costs and other expenses incurred and/or to
be incurred in the amount of at least euro 800,000.00 or, alternatively, of euro 600,000.00, which
corresponds to maximum amount of the reimbursable costs based on the value of the
proceedings, as estimated by the respondent in its statement of claim.
15. Considering that the value of the proceedings seems to be determined in euro 4,950,000.00, as
declared in the statement of claim, that the correspondent ceiling for recoverable costs in set at
euro 600.000,00, and that the future course of the proceedings and the complexity of the
procedural activities remain uncertain and difficult to foresee, as the written procedure is still in
progress, it appears reasonable to set an amount of the security equal to 50% of this latter sum,
that is euro 300.000,00 and to a time period of one month from the date of service of this order
for the respondent to provide the security.
16. The respondent is free to decide whether to provide security by deposit or by a bank guarantee
issued by a bank licensed in the European Union.
Respondent’s request.
17. In its written comment to the applicant’s application the respondent requested that “If it is
decided that the parties need to secure the liabilities to one another, SMAITL Oy requests that
both parties are treated equally. This requires Microsoft to issue Bank Deposit Security or Bank
guarantee to SMAITL Oy as well”.
18. The Court considers that with the preliminary order issued on 8 August 2024 the respondent
was asked to submit its comment to the applicant’s application and this does not allow the
submitting of any autonomous request which does not relate directly to the applicant’s one.
19. Therefore, if the respondent wished to lodge an own request for security for costs it should have
filed a proper distinct application in this regard.
20. In any case, the Court points out that the respondent’s request, even if not duly filed, lack any
reasoning, let alone evidence, about whether the financial position of the defendant gives rise
to a legitimate and real concern that a possible order for costs may not be recoverable and/or
the likelihood that a possible order for costs by the Court may not, or in an unduly burdensome
way, be enforceable.
21. Therefore, the request shall not be granted.

ORDER
The Court:
- grants the request for security for costs filed by Microsoft Corporation on 24 July 2024;
- orders Suinno Mobile & AI Technologies Licensing Oy to provide security for costs to
Microsoft Corporation in an amount of 300,000,00, in UPC_CFI_164/2024, either by deposit
or by a bank guarantee issued by a bank licensed in the European Union, within one month
from the date of service of this order;
- declares the request for security costs filed by Suinno Mobile & AI Technologies Licensing Oy
on 29 August 2024 inademissible.

Issued on 27 September 2024.

The Presiding judge and judge-rapporteur
Paolo Catallozzi
The legally qualified judge
Tatyana Zhilova
The technical qualified judge
Wiem Samoud

ORDER DETAILS
Order no. ORD_45914/2024 in ACTION NUMBER: ACT_18406/2024
UPC number: UPC_CFI_164/2024
Action type: Infringement Action
Related proceeding no. Application No.: 42517/2024
Application Type: Generic procedural Application