UPC case law on security for costs is shaping up

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The Rules of Procedure give no guidance on security of costs. Who must provide security and in which scenarios? How much security must be provided, and by which means?

Luckily, recent case law has greatly diminished legal uncertainty and provides the following answers:

The defendant in an infringement action can under no circumstances be obliged to provide security (UPC_CoA_393/2025, order of 20 June 2025[1])

The defendant in a counterclaim for revocation (typically the claimant in the infringement action) however can be obliged to provide security (ibid).

An application for security has to sufficiently demonstrate that (a) the financial position of the opposing party gives concern that a possible order on recoverable costs from said party may not be enforceable and/or (b) such an order may not be enforceable or enforcement might be unduly burdensome at the seat of the relevant party, based on the relevant domestic law and its application in practice (last confirmed in UPC_CoA_431/2025, order of 9 July 2024[2]). A projection on the likely outcome of the case however cannot be factored into the decision on security (UPC_CoA_548/2024, order of 29 November 2024[3]).

For case (a), the following rules have been established so far:

  • Only the financial situation of a party itself is relevant, not of the corporate group it belongs to (UPC_CoA_548/2024, order of 29 November 2024)
  • If publicly available information leaves doubts on the financial capability of a party, it must sufficiently demonstrate its financial capabilities based on its internally available information (LD Munich, UPC_CFI_149/2024, decision of 3 July 2025)
  • IP rights per se do not demonstrate financial capability (ibid)
  • NPEs are not a priori insufficiently capable (ibid)
  • Future risks for a party, like potential cost risks from parallel patent infringement proceedings it initiated, must be factored into the assessment of its financial situation (ibid)

For case (b), the following rules have been established so far:

  • Claimants from the EU and EEA do not qualify, i.e. no difficulties regarding enforcement (UPC_CoA_431/2025, order of 9 July 2024)
  • Claimants from the US will most likely not qualify (various CFI decisions, see LD Munich, UPC_CFI_149/2024, decision of 3 July 2025, item 22 with further references[1]
  • Claimants from China will most likely qualify (UPC_CoA_431/2025, order of 9 July 2024)

The amount of security will typically be the recoverable ceiling of attorney fees, which in turn is based on the dispute value (UPC_CoA_431/2025, order of 9 July 2024)

Security can be provided via bank guarantee, but guarantees from non-EU banks might not be accepted by the courts (UPC_CoA_301/2024, order of 16 September 2024[1])

 

Source reference

[1] https://www.unified-patent-court.org/sites/default/files/files/api_order/7227B579856831BF403C2E1A21270A9E_en.pdf

[2] https://www.unified-patent-court.org/sites/default/files/files/api_order/11C608D05CDE6D77F1DDE007FD8B3B43_en.pdf

[3] https://www.unified-patent-court.org/sites/default/files/files/api_order/EDDAE38EC4057A8059B5063F75CCD1C3_en.pdf

[4] https://www.unified-patent-court.org/sites/default/files/files/api_order/1408F1C41F8066722AFE89AB5ED5DCD3_de.pdf

[5] https://www.unified-patent-court.org/sites/default/files/files/api_order/67AF17792505738C77F7EC41BDF720A6_en.pdf