UPC_CFI_114/2025; UPC_CFI_358/2025 – Syntorr v Arthrex
- Court
- Local Division Munich
- Date
- Outcome
- Granted
- Sector
- Other
- Decision Type
- PROCEDURAL
Expert Commentary
Security for costs Facts The defendant asks the Court to order security for a total amount of € 3.300.000. The claimant requests the Court to order no security, or to lower the amount and to allow the security to be in the term of an “anti-avoidance” insurance with a licensed EU insurer. The JR 1. The claimant is obliged to give security. 2. A security of over € 2 million (which is the cost ceiling) is not justified. 3. An insurance is not an adequate security according to R. 158.1 RoP. 4. The JR orders € 2 million security by 30 September 2025 by a bank guarantee of a bank operating in the territory of the EPC Contracting Member States or by depositing the amount in the UPC’s bank account. 5. If no security is given by 30 September 2025, the Court may issue a default judgment. Comment 1. R. 158.1 RoP does not specify which bank has to provide the security. The JR states “authorized to operate within the territory of the EPC Contracting Member States”. I can imagine that enforcing such security may not be so easy against a local bank in an EPC (non-EU) member state. As an applicant, I would request a guarantee of a bank licensed to operate within the EU and preferably the UPC territory. 2. The JR is right that R. 158.1 RoP mentions only two possibilities of security: deposit with the UPC or a bank guarantee. I would think that an insurer which covers the risk of non-payment of the costs could also be an adequate security. However, changing the rule in order to provide more flexibility would make the task for the Court only more difficult, as the Court would have to consider whether the offered means of security is adequate. If the risk of no payment is insured, it should also be possible (against payment) for a party to obtain a bank guarantee. 3. Also in this case, I noticed no apparent effort by the representatives to agree on the security (see last week in the decision of the LD The Hague).
Full Decision Text
Local Division Munich UPC_CFI_358/2025 ACT_18767/2025 Procedural Order of the Court of First Instance of the Unified Patent Court Local Division Munich issued on 11 August 2025 Claimant: Syntorr LP, 1 Georgiou Gennadiou, 6031 Larnaca, CY represented by: Henrik Holzapfel Defendants: 1. Arthrex Inc., 1370 Creekside Boulevard, Naples, Florida 34108 – US 2. Arthrex GmbH, Erwin-Hielscher-Str. 9, 81249 Munich – DE 3. Arthrex Distribution Hub EMEA B.V., Ampèrestraat 9, 5928 PE Venlo - NL represented by: Ralph Nack Language of the proceedings: English Patents at issue: EP 2 670 898 Panel: Panel 1 of the Local Division Munich Deciding Judge: This order has been issued by the Judge-rapporteur Tobias Pichlmaier Points at issue: Security for costs UPC_CFI_358/2025 2 PARTIES REQUESTS Defendants request that the Court 1. order the Claimant to provide security in the total amount of EUR 3.300.000 for the costs and expenses incurred and/or to be incurred by the Defendants i.e., EUR 1.100.000 per Defendant, which the Claimant has to pay either by payment into a bank account of the Unified Patent Court or by a bank guar- antee issued by a major European bank under the direct supervision of the European Central Bank to be chosen by Claimant; 2. order that Claimant provide the security according to request No. 1 within three weeks, or, in the alternative to request No. 2, 2a. order that Claimant provide the security according to request No. 1 within a period to be determined by the Court. Claimant requests are as follows: I. The Court refrains from ordering the Claimant to provide security for the costs and expenses incurred and/or to be incurred by the Defendants. II. In the alternative, the Court orders the Claimant to provide security in the total amount of EUR 1.000.000 (further in the alternative: up to EUR 2.000.000, as deemed appropriate by the Court) in aggregate for all De- fendants for the costs and expenses incurred and/or to be incurred by the Defendants, and the Court allows the Claimant to provide security by insur- ance with anti-avoidance endorsement from an insurer licensed in the Eu- ropean Union and to be chosen by the Claimant, within a time limit of six weeks. III. Further in the alternative, the Court orders the Claimant to provide security in the amount and in the way that the Court deems appropriate. UPC_CFI_358/2025 3 SUMMARY OF THE FACTS In the view of Defendants Claimant is obliged to provide adequate security for costs. Claimant has concluded a litigation insurance with an anti-avoidance endorsement giv- ing the Defendants an irrevocable and direct claim against the insurer. In the opinion of Defendants this insurance policy is no adequate substitute for the statutory means of security provision under Rule 158(1) RoP. GROUNDS Claimant is obliged to provide adequate security for costs. According to Rule 158(1) RoP, Claimant’s insurance policy is no adequate security. An order to provide a security exceeding the regular ceiling for recoverable costs (2 Mio. € in the case at hand) is not justified. This order may only be appealed if it has first been reviewed by the panel pursuant to Rule 333.1 RoP (UPC_CoA_430/2025). UPC_CFI_358/2025 4 ORDER I. It is ordered that Claimant must provide security for costs to Defendants in the total amount of € 2.000.000,00 by 30 September 2025. The security can be pro- vided either - by a bank guarantee issued by a bank established and authorised to op- erate within the territory of the EPC Contracting Member States or - by depositing the security amount in the Unified Patent Court's account set up for this purpose. II. Claimant's attention is drawn to the fact that a default judgment may be entered in accordance with Rule 355 RoP if the security is not provided within the time limit set in this order. III. The parties' further requests are dismissed. Pichlmaier Judge-rapporteur
Key Holdings
- Claimant ordered to provide €2 million security for costs.
- Anti-avoidance insurance rejected as inadequate security under R. 158.1 RoP.
- Security capped at cost ceiling (€2m).
Tags
- Security for Costs