Key takeaways
The qualification of a party as an SME or the submission of a declaration purporting to establish a party’s SME status pursuant to R. 370.8 RoP is not, in itself, sufficient to dispense with the obligation for said party to provide a security for costs in accordance with R. 158 RoP, if the requirements for the application of that rule are met.
[17] At first instance, to counter the evidence gathered by the Respondents, the Appellant merely stated that the Respondents’ arguments were “legally and factually unfounded” and referred in this context to its alleged SME status, based on the declaration it submitted to obtain a reduction of Court fees in accordance with R. 370.8 RoP (Exhibit MW1). In this declaration, the Appellant asserts that it is a micro-enterprise within the meaning of the Annex to the Commission Recommendation 2003361/EG of 6 May 2003 concerning the definition of micro-, small- and medium-sized enterprises (i.e. an enterprise that employs fewer than 10 persons and has an annual turnover that does not exceed € 2
million). This is insufficient to set aside R. 158 RoP for the following reasons.
[18] The fact that a claimant qualifies as an SME within the meaning of the Annex to the Commission Recommendation 2003361/EG of 6 May 2003 does not automatically exempt the claimant from the obligation to provide security for costs.
[19] Art. 69(4) UPCA and R. 158 RoP also apply to SMEs. Neither of these provisions contain an exception or restriction with regard to SMEs. These provisions do not distinguish between different types of parties. This is different, for example, in R. 370.8 RoP in which the legislature did recognise the need to introduce a provision taking into account the financial resources of SMEs, which could lead to a reduction in the legal costs borne by SMEs. Likewise, in Art. 2(2) of the Decision of the Administrative Committee of 24 April 2023 on the scale of recoverable cost ceilings (“Scale of ceilings for recoverable costs”), specific reference is made to the status of a party as an SME, providing the possibility for that party to request the Court to lower the ceiling for recoverable costs in case the amount of recoverable costs, if awarded, would threaten the economic existence of the requesting party. The fact that the legislature has not provided an exception or restriction for SMEs regarding security for legal costs in accordance with R. 158 RoP must be regarded as a deliberate choice. In view of this, the applicability of R. 370.8 RoP bears no consequence for the applicability of R. 158 RoP. As the Respondents rightly observed, the provisions on reduced court fees (R. 370.8 RoP) and security for costs (R. 158 RoP) pursue distinct objectives and operate independently.
[19] The application of Art. 69 UPCA and R. 158 RoP to SMEs is also consistent with the above-mentioned ratio behind Art. 69(4) UPCA. The protection of a defendant against a claimant, who initiates an action, without having sufficient means to compensate the defendant for the legal costs incurred in the proceedings the defendant was involved in at the initiative of the claimant, may be necessary regardless of whether the claimant is an SME or not.
The amount of the security for costs should be set starting from the ceiling of Annex A (“scale of ceilings for recoverable costs”) to the Decision of the Administrative Committee of 24 April 2023, weighed according to all the relevant circumstances of the case presented by the parties. Where appropriate, the Court may take the SME status of a party into account to determine the amount of the security for costs.
[29] If a defendant prevails in the main action, it is, pursuant to Art. 69(1) UPCA, R. 152.1 and R. 152.2 RoP, entitled to recover reasonable and proportionate legal costs, the ceiling of which is set in Annex A (“Scale of Ceilings for Recoverable Fees”) of the Decision of the Administrative Committee of 24 April 2023 on the “Scale of ceilings for recoverable costs”. Considering this, it is established by this Court that the amount of the security of costs should be set starting from this ceiling, weighted according to all the relevant circumstances of the case (CoA Order of 30 April 2026, UPC_CoA_1/2026, Adobe v. Keeex, para. 33).
[30] It is recalled that an SME can request the Court to lower the applicable ceiling of recoverable costs following the procedure and applying the conditions of Art. 2(2) to Art. 2(5) of the Decision of the Administrative Committee of 24 April 2023 on the “Scale of ceilings for recoverable costs”. One of these conditions is that the requesting party establishes that the amount of recoverable costs to be awarded to the successful party would threaten its economic existence.
[31] Although the SME status of a claimant may be taken into account where appropriate as one of these circumstances when setting the amount of the security (CoA Order of 30 April 2026, UPC_CoA_1/2026, Adobe v. Keeex, para. 33), there is no need, in principle, to adopt a different approach for SMEs or to reduce the ceiling for that reason alone.
Division
Court of Appeal
(Panel: Voß, Sabotier, van den Broek)
UPC number
UPC_CoA_48/2026
Type of proceedings
Request for procedural security pursuant to 158.1 RoP
Parties
CLAIMANT (and APPELLANT):
La Siddhi Consultancy Limited (Hempstead, UK)
DEFENDANTS (and RESPONDENTS):
- Athena Pharmaceutiques SAS (Louveciennes, France)
- Substipharm (Paris, France)
Patent(s)
EP 3 592 333 with unitary effect
Body of legislation / Rules
Rule 158.1 RoP, Rule 370.8 RoP, Art. 69(4) UPCA, Art. 2(2) to Art. 2(5) of the Decision of the Administrative Committee of 24 April 2023 on the “Scale of ceilings for recoverable costs”
