2025 Week 17
This week we take a look at how the winning party at the UPC should apply for their costs to be paid by the losing side, including at least one elephant trap to avoid
Avalanche rescue devices – costs for main proceedings plus costs for PI
Ortovox and Mammut are still slugging it out in a UPC dispute that just keeps on giving. As a recap, the case involves avalanche rescue devices. Ortovox obtained a preliminary injunction (PI) against Mammut, which was upheld on appeal (UPCW 2024 Week 39). In the subsequent proceedings on the merits, Ortovox sued for infringement and Mammut counterclaimed for revocation. Ortovox won (UPCW 2025 Week 9). Mammut are appealing the decisions on infringement and validity. But typically at the UPC, appeals don’t have suspensive effect and so Ortovox can plough on with enforcing the decision and getting their costs.
When deciding the substance of a case, the court will usually give a basic decision on costs – essentially declaring which side is the “winner” and the proportion of their costs that they can expect to be paid by the other side. In the proceedings on the merits, the court decided that Ortovox should be entitled to 100% of their costs for the revocation counterclaim and to 80% for the infringement action. And in the appeal on the preliminary injunction, Ortovox had been awarded their costs in principle.
These decisions on the merits are not detailed costs orders – in effect they determine the broad liability for costs. But it is possible for the court to order payment of provisional costs, and this is what happened here, with Mammut being ordered to pay provisional costs in each of the decisions that went against them.
Which bring us to three interesting orders on costs that have come out of the dispute.
At the UPC, unless the parties agree otherwise, it’s necessary for the winning party to start a separate action for costs. This has to be done within one month of service of the decision on the merits. The costs proceedings of course focus on the actual costs incurred and whether they were incurred reasonably and proportionately. Then they are subjected to the cap on recoverable costs, which is based on the court’s assessment of the value of the case.
The order Ortovox v. Mammut (1) is Ortovox’s application for costs. The Local Division had set the value of the infringement and revocation proceedings at €1m each (i.e. €2m total) and so the cap on recoverable costs was €200,000.
An interesting point is whether the costs for the PI proceedings can be dealt with together with the costs of the main proceedings. The answer is emphatically yes, relying on the Court of Appeal order in SharkNinja v. Dyson. There it was held that costs for PI proceedings can’t really be decided until the decision on the merits has been reached. That makes sense, in that the outcome of the main proceedings might affect who should be considered to be the winner overall.
So: even if you win your PI, you can only apply for costs for that once you also win the subsequent infringement action.
More importantly, the Local Division ruled here that the costs for the PI can be obtained in addition to the costs for the main proceedings. This is really significant because it means that a further and separate costs cap applies. The value for the PI proceedings had been set at €500,000 and therefore the costs cap for that would be €56,000.
On the actual nitty-gritty of the application for costs, the patentee submitted detailed time sheets detailing the work done and the hourly rates and other expenses. The court generally agreed that these were fine, and specifically noted that it is to be expected that a team of attorneys would be expected to work on a UPC case. Pre-action work could also be included.
The order Ortovox v. Mammut (2) is the outcome of Mammut’s application for costs – even though they were the losing party, they were entitled to a small proportion of their costs from the infringement action.
Ortovox v. Mammut (3) is the fly in the ointment for the truly nosey. Ortovox requested that the numbers in their costs application should be kept confidential. For this reason, the information available from the orders only relates to the reasoning of the court and the qualitative outcome, rather than the actual sums to be paid.
LEDs – strict time limit for costs application
There were two related LED cases during 2024 that had opposite outcomes. In UPCW 2024 Week 41 the patent was found to be valid and infringed. And then in UPCW 2024 Week 42 a different but related patent was found to be invalid and was revoked. In each case the patentee was Seoul Viosys and the alleged infringer was Expert Klein (and others).
So now we come to the assessment of costs for these two cases. As well as the decisions on the merits being different, the outcome of the costs applications was also different. Note that the parties had apparently agreed during the oral hearings that the recoverable costs should be €100,000, whichever side won.
In Seoul Viosys v. Expert Klein, following the decision on the merits, there was a dispute about whether the €100,000 figure was intended to be the total costs, or just representation costs. There were significant additional costs claimed by the patentee, relating to test purchases and travelling expenses. A clear lesson here is that an agreement between the parties on costs should address these details and be clearly documented. It’s worth noting that the costs cap applies only to representation costs, and so these additional costs can be added on top. The court awarded the patentee all their requested costs.
In Expert Klein v. Seoul Viosys, the winning party was Expert Klein, having had the patent revoked. They therefore filed an application for costs, claiming €100,000 for representation costs and €11,000 for the court fee. The court’s decision on infringement and validity was issued in the infringement part of the court’s case management system (CMS) on 10 October 2024. The same decision was only issued in the revocation part of the CMS on 6 December 2024.
The application for costs was filed on 12 December 2024. The court decided that this was out of time, and therefore inadmissible. There is a one month time limit for applying for costs after service of the decision on the merits. Expert’s argument that the CMS would not let them actually file the application for costs in the CMS for the infringement case did not persuade the court. The court said that they could have filed the costs application in hard copy. Although maybe Expert could have applied for an extension of time or perhaps for re-establishment of rights, the court noted that they had not done so, and so strictly enforced the one month time limit.
