UPC Board of Appeal: Security for Costs

In exercising its discretion, the Court must determine, based on the facts and arguments presented by the parties, whether the financial situation of the claimant gives rise to legitimate and concrete concerns that any potential costs order could not be satisfied and/or whether a potential costs order could not be enforced or only at disproportionate expense. The burden of proving why a security for costs is appropriate in a particular case rests with the defendants who request it. Once the grounds and facts of the request have been credibly put forward, it is for the claimant to substantively challenge those grounds and facts, particularly since the claimant generally possesses information and evidence regarding its own financial circumstances. It is incumbent on the claimant to demonstrate that and why an order to provide security would impermissibly restrict its right to an effective remedy. The relative financial position of the claimant compared with that of the defendants is not a criterion, especially if the (limited) level of funding made available to a dedicated enforcement entity is a deliberate business decision (Unified Patent Court, 17 September 2024, Court of Appeal 221/2024).