UPC_CFI_850/2026 – Transsion v Ericsson

Expert Commentary

Security for costs Facts Ericsson, the defendant in infringement proceedings with respect to EP 4 123 910, requests security for costs. The Court The Court, referring to the case law with respect to Chinese claimants, orders a security of 50% of the ceiling for costs based on the value of the litigation set by Transsion at € 1.500.000, which amounts to € 100.000 for costs of each defendant (total: € 200.000). Comment Ericsson had asked for € 300.000 but the Court based its decision on the value of the litigation as indicated by Transsion. As such, that seems not automatically reasonable as that value of the litigation could have been set too low. However, from the decision it appears that Ericsson did not argue in its application that that value should be higher.

Full Decision Text

ORDER of the Court of First Instance of the Unified Patent Court issued on 26 May 2026 CLAIMANT: Shenzhen Transsion Holdings Co. Ltd. Unit 1, Floor 24, Chuanyin Building, No.8, Xianyuan Road, Xili Sub-district, Nanshan District, 518000, Shenzhen City, People's Republic of China represented by Mr. Andreas Kramer Mr. Alex Wilson Mr. Ari Laakkonen DEFENDANTS: Telefonaktiebolaget LM Ericsson (Publ) Torshamnsgatan 21, Kista, 164 83 Stockholm, Sweden Ericsson Holding International B.V. Stationslaan 222, Platform C, 3rd floor, 4815 GW Breda, the Netherlands LISBON – LOCAL DIVISION UPC CFI 850/2026 Ericsson Telecommunicatie B.V. Stationslaan 222, 4815 GW Breda, the Netherlands Ericsson Telecomunicações, Lda. Lagoas Park, Edifício 4, Piso 0, 2740-267 Porto Salvo, Portugal represented by Mr. Wim Maas PATENT AT ISSUE: EUROPEAN PATENT NO EP4123910 PANEL: Presiding judge and Judge-rapporteur: Rute Lopes Legally qualified judge: András Kupecz Legally qualified judge: François Thomas DECIDING JUDGE: This order is issued by the Judge-rapporteur LANGUAGE OF THE PROCEEDINGS: English. SUBJECT: Application under R 158 RoP SUMMARY OF PROCEDURAL FACTS AND PARTIES’ REQUESTS 1 The claimant has brought these proceedings (hereinafter also referred to as “Transsion”) on 6 March 2026, in relation to the infringement of patent EP4123910 (hereinafter “EP 910”). Transsion is seeking an injunction and related remedies against Ericsson. 2 On 28 April 2026, the defendants (hereinafter also referred to as “Ericsson”) requested that: (a) Transsion, within 21 days of service of the order, alternatively a period deemed appropriate by the Court, provide security for costs in the amount of EUR 300 000, pursuant to Article 69.4 of the UPCA and R. 158 RoP or obtain a bank guarantee in favour of Ericsson for the same amount. (b) Primarily, should Transsion fail to comply with an order for security for costs within the time period specified by this Court, the Court shall give a decision by default against Transsion pursuant to R. 158(4)-(5) and R. 355 RoP. Alternatively, should Transsion fail to comply with an order for security for costs within the time period specified by this Court, the period for Ericsson to lodge its Statement of Defence under R. 23 RoP shall be extended, meaning that (i) the time for Ericsson to lodge its Statement of Defence shall recommence, de novo, from the date upon which Transsion provides security in full; and (ii) all subsequent deadlines in the Lisbon Action (defined below) shall be revised accordingly. (c) Transsion bear the costs incurred by Ericsson in relation to this Security for Costs Application, pursuant to Article 69.4 of the UPCA and R. 158 RoP. 3 Ericsson argues that these proceedings lack merit and that Ericsson has a legitimate and real concern that enforcement of a future costs order against Transsion would be impossible and/or unduly burdensome, as Transsion is a company registered in Shenzhen City in the People's Republic of China (hereinafter “China”). It has no registered presence or place of business within any Contracting Member State of the Unified Patent Court. This is of fundamental significance to the enforceability of any costs order that this Court may ultimately make in Ericsson's favour. Should Ericsson be successful in this action, whether in whole or in part, any costs award made against Transsion may be, in real terms, unenforceable. Ericsson further referred to the Court's caselaw, which recognised the difficulty of enforcing an order in China. 4 Ericsson requested that the amount of the security be set at a minimum of EUR 300 000, taking into account the value already established for the proceedings and the fact that Ericsson will incur additional costs, as it intends to file a counterclaim seeking the revocation of the patent. 5 Transsion responded, requesting that Ericsson’s claims be dismissed. In the alternative, the Court should set a lower amount, not exceeding EUR 50 000, to be provided by bank deposit or bank guarantee within six weeks from the date of the order. GROUNDS FOR THE ORDER 6 Pursuant to Art. Under 69(4) UPCA and R. 158 RoP, the Court may, at its discretion, order security for the legal costs and expenses incurred by the party upon the defendant's request, taking into account the facts and arguments advanced by the parties. 7 The Court of Appeal has interpreted the legal framework of Art. 69(4) UPCA in the sense that (cf. inter alia Order of 29 November 2024, UPC CFI 548/2024 (Aarke v. Sodastream); Order of 12 July 2025, UPC CoA 596/2024 (Suinno Mobile v. Microsoft); and Order of 18 February 2026, UPC CoA 890/2025 (Syntorr v. Arthex): • It is the defendant who has the burden to prove the necessary facts for the Court to establish that a security for costs is appropriate. The claimant may validly challenge the facts and arguments put forward by the defendant. • A request for security may be granted if it is established that there is a likelihood that the enforcement of a UPC costs order is unduly burdensome for the defendant (it is not necessary to establish that it is impossible). According to the burden of proof, it is on the defendant to provide evidence as to the foreign law applicable in the territory where the order shall be enforced, but also its application; and/or • A request for security may be granted where legitimate concerns that any future costs order in the defendant’s favour may not be recoverable, particularly in light of the claimant’s financial situation, are raised. • Aspects concerning expectations related to the outcome of the case or the cost decision, as well as expectations of voluntary or involuntary compliance, are irrelevant to assessing whether a security for costs should be granted. 8 In this case, Ericsson does not question the financial capacity of the claimant but solely that the enforcement of a UPC costs order would be unduly burdensome. Unduly burdensome enforcement of a cost decision in China Burden of proof 9 In its application, Ericsson stated it relied on the Court of Appeal's order of 9 July 2025, UPC CoA 431/2025, JingAo v Chint, due to the similarities of the situations, which Ericsson pointed out. Particularly: o The claimant is registered in China, as it was the claimant in the cited case. o China is not a member of the European Union or European Economic Area, as the Court of Appeal recognised it. o There have been difficulties experienced by the UPC in serving the statement of claim and other documents in China, as also recognised by the Court of Appeal. 10 Transsion argued that there is no rule in Article 69(4) UPCA requiring security to be ordered merely because a claimant is domiciled in a non-EU state, and that the objective need for security should be evaluated. Rule 158 RoP does not specify such a rule either. Transsion further argued that Ericsson failed to meet its burden to provide evidence of the foreign law applicable in the territory where the order is to be enforced, and of its application, as pointed out by the CoA in Aarke v. Sodastream (referred to above). 11 The Court considers, in light of the current CoA’s case law concerning Chinese parties, Ericsson, that has put forward sufficient facts and arguments to demonstrate that enforcing a UPC costs order is likely to be unduly burdensome. In particular, Ericsson noted that the Claimant is registered in China and that China is not an EU Member State. Ericsson also pointed out that the Court of Appeal has already recognised that the enforcement of decisions in China may be unduly burdensome due to the absence of a multilateral instrument between the EU and China that provides for the recognition of civil judgments, including costs orders. Furthermore, the Court of Appeal has referred to the "difficulties experienced by this Court in serving the statement of claim and other documents in China”, which is indicative of issues that could arise when enforcing a costs order. Unduly burdensome enforcement 12 The Court agrees with Ericsson, in line with the cited caselaw of the Court of Appeal (JingAo v. Chint referred to above), that China, as a non-EU country, is not bound to Union Law. There is also no multilateral instrument between the EU and China that provides for the recognition of civil judgments, including costs orders. In light of this, there are no guarantees on the recognition and enforcement of judgments or orders of the Courts of EU Member States within a reasonable time. 13 Furthermore, in line with the Court of Appeal’s decision, the Court agrees that existing UPC practice already demonstrates the difficulties encountered when serving the statement of claim and other documents in China. This evidence is sufficient to conclude that similar difficulties are likely to arise in enforcing any order fixing costs. 14 It is not disputed that China lacks a procedure or legal framework for recognising and enforcing UPC costs orders. Rather, the argument is that, in light of the UPC’s experience, enforcing a cost decision in China is likely to constitute "unduly burdensome". 15 In light of the foregoing and the circumstances presented by Ericsson, it is reasonable to assume that any order for the assessment of costs issued in Ericsson’s favour would only be enforced at unreasonable expense (order 19 December 2025, UPC CoA 622/2025). 16 The request is therefore justified. The amount of the security 17 The Court of Appeal (order of 12 July 2025, UPC CoA 596/2024, Suinno Mobile v. Microsoft) has established that the Court of First instance has a margin of discretion when setting the amount of the security and found it appropriate that it set the amount at 50% of the applicable ceiling for recoverable costs. 18 Ericsson argues that the amount of security should be set at EUR 300 000, corresponding to 75% of the ceiling for recoverable costs (set by the decision of the Administrative Committee of 24 April 2023 of the UPC), taking into account the increase in the value of the case once the counterclaim has been filed (it hasn’t been yet). 19 Transition finds the requested amount of EUR 300 000 disproportionate and argues that the Court should not rely on defences that have not yet been pleaded. In that regard, Transsion considers EUR 50 000 to be adequate. 20 To decide, the Court will rely on the value of the case at present. It is irrelevant what Ericsson states it intends to plead in the future or how Ericsson believes that may affect the value of the case. It’s a mere declaration of intentions that does not constitute a proper reasoned request for the purpose of R. 158 RoP. 21 Considering the value of the case, set by Transsion at EUR 1 500 000 and the ceiling for recoverable costs set by the Decision of the Administrative Committee of the UPC of 24 April 2023, of EUR 200 000 for such value, the Court finds it appropriate, at this stage, to set the security at 50% of that ceiling: EUR 100 000. Means of and timing for providing security 22 R. 158.1 (second sentence) RoP indicates that where the Court decides to order such security, it shall decide whether it is appropriate to order the security by deposit or bank guarantee. Both Ericsson and Transsion (in this case, as an alternative request) accept that security is provided by any of those means. 23 As such, Transsion is given the option to provide security by depositing funds into an UPC account dedicated to security deposits, or by providing a bank guarantee from an EU-licensed bank. 24 Regarding the timing for providing the security, Transsion did not bring forward any arguments to oppose the suggested deadline of 21 days. Costs of this Application 25 Ericsson requested that Transsion bear the costs incurred by Ericsson in relation to this Security for Costs Application, pursuant to Article 69.4 of the UPCA and R. 158 RoP. 26 Costs for all procedural steps and applications are generally treated as part of a single overall cost assessment, so they should be deferred to the decision on the merits. ORDER 1. Shenzhen Transsion Holdings Co. Ltd. is ordered in this case UPC CFI 850/2026 to provide security in the amount of EUR 100 000 within a period of 21 days following service of this order by way of deposit on the UPC account dedicated for security deposits or alternatively by way of bank guarantee provided by a bank licensed in the EU. 2. Shenzhen Transsion Holdings Co. Ltd. is hereby notified that a default judgment may be rendered pursuant to R. 355 RoP if security is not provided within the prescribed time limit (R. 158.4 RoP). 3. Costs regarding this application are deferred to the decision on the merits. INFORMATION ON REVIEW: The order is subject to the right of review by the panel on a reasoned application by a party lodged within 15 days of service of the order (R. 333 (1), (2) RoP).

Key Holdings

• Security for costs can be ordered against a claimant in infringement proceedings.
• The court may order security for costs based on a percentage of the ceiling for costs.
• The value of litigation, as indicated by the claimant, can be used as a basis for calculating security for costs if not challenged by the defendant.
• The defendant should argue if the claimant's stated value of litigation is too low for cost calculation.

Tags

• Security for costs
• Costs
• Procedural

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