Volkswagen v Network System Technologies (CoA, 17 September 2024)

Dhenne Avocats · 10 October 2026

Our analysis

Summary

By order of 17 September 2024 (UPC_CoA_218/2024, UPC_CoA_220/2024 and UPC_CoA_222/2024), the Court of Appeal (R. Kalden, presiding and judge-rapporteur, I. Simonsson, P. Rombach) set aside three orders of the Munich Local Division of 23 April 2024 and ordered Network System Technologies (NST), a US company, to provide security for Volkswagen’s costs in three infringement actions (EP 1 875 683, EP 1 552 399 and EP 1 552 669). The order clarifies how the burden of substantiation is allocated under Rule 158 RoP.

Question

When does a defendant obtain security for costs where the claimant does not disclose its financial position, and what weight does the claimant’s patent portfolio carry?

Decision

The claimant’s financial position must give rise to a legitimate and real concern that a costs order may not be recoverable (paragraph 7). The applicant substantiates its request credibly. The claimant, which holds the information, must then rebut it with substantiated arguments (paragraph 8). Requiring precise evidence of insolvency sets the bar too high, and absent details from NST it is assumed to have no other relevant assets (paragraph 10). The patent portfolio is not sufficient: price unsubstantiated, imminent expiry, value dependent on the outcome of the dispute (paragraphs 11 to 13). As NST says it is funded to cover any costs orders, access to justice is not barred (paragraphs 14 and 15). The amounts sought are halved to EUR 100,000, 100,000 and 300,000, within three weeks (paragraphs 17 and 18).

Key points for practice

• Practical point: a defendant that documents its search for public financial information on the claimant shifts to the claimant the burden of substantiating its assets, and a portfolio of patents close to expiry is no substitute for security.

Provisions applied

Agreement on a Unified Patent Court

Art. 69(4)

Rules of Procedure

Rule 158

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.