Volkswagen v Network System Technologies (CFI, ORD_12231/2024, 23 April 2024)

Dhenne Avocats · 10 October 2026

Our analysis

Summary

By order of 23 April 2024 (UPC_CFI_514/2023, ACT_597692/2023, App_11434/2024, 11453/2024 and 11833/2024), the Munich Local Division (M. Zigann, presiding, T. Pichlmaier, judge-rapporteur, P. Perrotti) dismissed the applications for security for costs brought by Volkswagen and Audi, and by Texas Instruments Incorporated and Texas Instruments Deutschland, against Network System Technologies (NST), claimant in the infringement action on EP 1 875 683. A US seat and a lean structure are not enough: concrete evidence of insolvency risk or of enforcement obstacles is required.

Question

Must a US-based claimant with two employees and no tangible assets provide security for costs under Art. 69(4) UPCA and Rule 158.1 RoP?

Decision

Recalling its own case law and that of other divisions, the division accepted that security may be ordered in the main action, at any time during the proceedings, but as a matter of discretion balancing the defendant’s protection against the claimant’s right to an effective remedy (Preamble to the UPCA, Art. 47 of the Charter). The applicant must file a reasoned request, after which the other party must respond in a substantiated way, since it holds the financial information. The defendants offered only general allegations. Relying on the non-EU seat would amount to a priori discrimination on grounds of nationality. Nothing showed that UPC decisions would be hard to enforce in the United States. NST’s lean organisation fits its business model and its patent portfolio could be seized. The applications were dismissed, costs were reserved to the main proceedings and leave to appeal was granted.

Key points for practice

• Practical point: an application for security for costs against a lean foreign company must rest on specific evidence about its solvency or about enforcement, the location of its seat alone being irrelevant.

Provisions applied

Agreement on a Unified Patent Court

Preamble, Arts. 54, 69(4) and 73(2)(b)(ii)

Rules of Procedure

Rules 158.1, 158.5, 220.2 and 224.1(b)

Charter of Fundamental Rights of the European Union

Arts. 47 and 52(1)

Case law cited

Munich Local Division, 29 September 2023 (UPC_CFI_15/2023), Helsinki Local Division, 20 October 2023 (UPC_CFI_214/2023), Munich Central Division, 30 October 2023 (UPC_CFI_252/2023), Paris Central Division, 13 November 2023 (UPC_CFI_255/2023), The Hague Local Division, 13 February 2024 (UPC_CFI_239/2023)

Prepared by Dhenne Avocats from the official decision, consulted on 10 October 2026. The database is updated every week, on Friday. Only the official text is authoritative.