Cost orders in the UPC
- The general principle is that a successful party is entitled to recover reasonable and proportionate legal costs and other expenses from the unsuccessful party, but this is subject to the principles of equity and also recoverable only up to a ceiling (see below) (art. 69(1) Agreement on a Unified Patent Court ('UPCA')). Recoverable costs include court fees and costs of representation, witnesses, experts, interpreters and translators (Rules 151-155). If a party has caused the court or another party unnecessary costs it must bear them (art. 69(2). If a party has only been partially successful, or in exceptional circumstances, the court may order that costs be apportioned equitably or that the parties bear their own costs (art. 69(2)).
- The recovery of costs is subject to a ceiling that is determined by the value of the proceedings. Rule 370(6) provides that the assessment of the value of the action 'shall reflect the objective interest pursued by the filing party at the time of filing the action. In deciding on the value, the Court may in particular take into account the guidelines laid down in a decision of the Administrative Committee for this purpose'. The guidelines are laid down in the Decision of the Administrative Committee of 24 April 2023 on the Guidelines for the determination of court fees and the ceiling of recoverable costs of the successful party. As explained in the Decision of the Administrative Committee of 24 April 2023 on the scale of recoverable cost ceilings, the ceilings apply per action, rather than per party, and only apply to fees for representation. In cases of partial success, the ceiling will be amended to correspond to the proportion of success of the party seeking costs recovery. The scale of ceilings is set out in the following table.
|Value of the proceeding||Ceiling for recoverable costs|
|Up to and including €250.000||Up to €38.000|
|Up to and including €500.000||Up to €56.000|
|Up to and including €1.000.000||Up to €112.000|
|Up to and including €2.000.000||Up to €200.000|
|Up to and including €4.000.000||Up to €400.000|
|Up to and including €8.000.000||Up to €600.000|
|Up to and including €16.000.000||Up to €800.000|
|Up to and including €30.000.000||Up to €1.200.000|
|Up to and including €50.000.000||Up to €1.500.000|
|More than €50.000.000||Up to €2.000.000|
- However, the ceilings above can be amended in certain circumstances. This means that a party’s cost exposure will not be clear at the outset of proceedings.
- In limited situations, such as particularly complex cases or cases involving multiple languages, the court has discretion to raise the ceiling if a party requests. The amount by which the ceiling can be raised is based on the value of the claim, with the maximum ceiling being up to €5 million for cases valued at more than €50 million.
The court also has discretion, if a party requests, to lower the ceiling if the amount of recoverable costs would threaten the economic viability of the requesting party, particularly if that party is an SME, university, non-profit organisation, public research organisation or natural person. The court must take into consideration all available information, including: the procedural behaviour of the parties; the applicable level of the ceiling for recoverable costs in comparison with the annual turnover of both parties; the type of economic activity of both parties; and the impact of lowering the ceiling on the other party.