In its decision of 21 February 2026 in Astellas Institute for Regenerative Medicine v Healios\u00a0K.K. (UPC_CoA_489\/2025)<\/span><\/strong>, the\u00a0Unified Patent Court\u00a0Court of Appeal addressed the role of litigation insurance in the context of security for costs and confirmed that such arrangements may in principle be taken into account.<\/p>\n The decision provides important guidance for UPC litigation. While litigation insurance is not treated as automatically equivalent to traditional forms of security, it is recognised as a potentially relevant means of addressing cost risk.<\/p>\n The case arose from an application for security for costs. The applicant argued that there was a risk that a potential adverse costs award could not be enforced and requested that security be ordered.<\/p>\n The opposing party relied, inter alia, on a litigation insurance arrangement covering adverse costs. The central question was therefore whether such an arrangement could be considered sufficient to mitigate or exclude the need for security.<\/p>\n The Court of Appeal made clear that litigation insurance can, in principle, be relevant when assessing whether a party is able to meet a potential costs order.<\/p>\n This constitutes a notable development. Rather than excluding such arrangements from consideration, the Court acknowledged that modern litigation structures may involve insurance-based coverage of cost risks and that these arrangements can be taken into account.<\/p>\n At the same time, the Court did not establish a general equivalence between litigation insurance and traditional forms of security.<\/p>\n The Court emphasised that the decisive question remains whether the risk of non-recovery is sufficiently addressed in practice.<\/p>\n In this context, litigation insurance is not automatically equivalent to a bank guarantee or similar forms of direct security. Its adequacy depends on the specific terms and reliability of the insurance.<\/p>\n The Court therefore rejected a formal approach and confirmed that different types of financial backing must be assessed on their individual merits.<\/p>\n The decision indicates that litigation insurance will be subject to a detailed and case-specific assessment.<\/p>\n Relevant considerations include whether the insurance provides:<\/p>\n Arrangements that are subject to conditions, exclusions or discretionary elements may not be sufficient to eliminate the risk of non-recovery.<\/p>\n The decision has immediate implications for UPC litigation.<\/p>\n First, it opens the door for litigation insurance to be used as part of a strategy to address security for costs. Parties may rely on such arrangements, provided they can demonstrate their reliability.<\/p>\n Second, the decision also makes clear that such reliance will be scrutinised closely. The burden remains on the party invoking the insurance to show that it provides effective protection.<\/p>\n Third, applicants for security for costs retain the possibility to challenge the adequacy of such arrangements and to argue that additional security is required.<\/p>\n The Court of Appeal recognises litigation insurance as a potentially relevant element in the assessment of security for costs under the UPC. At the same time, the decision confirms that its acceptance is not unconditional. The decisive factor remains whether the arrangement provides a reliable and enforceable safeguard against the risk of non-recovery.<\/p>\n Initial market reactions indicate that insurers have already begun to structure and offer corresponding products tailored to UPC litigation.<\/p>","protected":false},"excerpt":{"rendered":" The Court of Appeal recognises litigation insurance as a potentially relevant element in the assessment of security for costs under the UPC. In its decision of 21 February 2026 in Astellas Institute for Regenerative Medicine v Healios\u00a0K.K. (UPC_CoA_489\/2025), the\u00a0Unified Patent…<\/p>","protected":false},"author":3,"featured_media":42393,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[64],"tags":[],"legal_areas":[218,224],"class_list":["post-45919","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-upc-update-en","legal_areas-patent-litigation","legal_areas-patents-and-utility-models"],"acf":[],"yoast_head":"\nBackground<\/h3>\n
Recognition of litigation insurance<\/h3>\n
No automatic equivalence to bank guarantees<\/h3>\n
Criteria for assessment<\/h3>\n
\n
Practical implications<\/h3>\n
Conclusion<\/h3>\n