UPC_CFI_515/2023

INTEGRATED CIRCUIT AND METHOD FOR ESTABLISHING TRANSACTIONS

InfringementMain Infringement ActionMunich LDInfringementCase Closed

Overview Decisions Reasoning Citations Documents Timeline

Plain-English summary

Volkswagen, Audi, Texas Instruments Incorporated and Texas Instruments Deutschland applied for security for costs of EUR 200,000 against Network System Technologies LLC (NST), a US-based patent assertion entity asserting EP 1 552 399 before the Munich Local Division. The court dismissed all three applications, holding that the defendants had provided only general allegations about enforcement difficulties with no concrete evidence of insolvency risk, and that ordering security based on US domicile alone would amount to unlawful discrimination.

Accepted arguments

What the court agreed with — by party.

applications for security for costs against NST should be dismissed because defendants provided no concrete evidence of enforcement difficulties against a US entity
ClaimantLegal basis: Art. 69(4) UPCA; R. 158 RoP
Note: The Munich LD held that mere domicile in a non-EU country cannot be a basis for security for costs (would constitute nationality-based discrimination), and defendants provided no evidence of actual insolvency risk or enforcement difficulties.
US courts routinely recognise and enforce foreign judgments including UPC decisions
ClaimantLegal basis: R. 158 RoP
Note: The court found no demonstrated difficulty with enforcing a cost order in the US against NST.

Rejected arguments

What the court did not agree with — and why.

NST as a US-based NPE should be ordered to provide EUR 200,000 security for costs
RespondentLegal basis: Art. 69(4) UPCA; R. 158 RoP; Art. 47 EU Charter of Fundamental Rights
Reason: Defendants relied only on general allegations without concrete evidence of insolvency risk or enforcement difficulties; mere non-EU domicile cannot justify security orders as it would constitute unlawful a priori discrimination based on nationality of registered office.

Key legal principles

Doctrines and rules cited in the reasoning.

security for costs under R. 158 RoP requires concrete evidence of claimant's financial incapacity or enforcement difficulties, not mere US domicile ordering security based solely on non-EU domicile constitutes unlawful discrimination under Art. 47 EU Charter UPC decisions are generally enforceable in the US under comity principles right to effective remedy under Art. 47 EU Charter constrains security-for-costs orders intangible assets (patents) may be available to satisfy a cost order against a patent-holding entity

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