JingAo Solar Co., Ltd. v. Chint New Energy Technology Co., Ltd. et al.

This Procedural Order of the Hamburg Local Division of the Unified Patent Court, dated 2 April 2025, concerns an application by the Defendants for an order requiring the Claimant to provide security for costs under Rule 158 RoP in infringement proceedings concerning European Patent EP4092759, owned by the Claimant JingAo Solar Co., Ltd.

The Claimant, JingAo Solar Co., Ltd., is a Chinese company based in Xingtai City, Hebei Province. The Defendants include Chint New Energy Technology Co., Ltd. (also a Chinese company based in Haining City, Zhejiang Province), Astronergy Europe GmbH, Astronergy GmbH, Astronergy Solarmodule GmbH (all based in Berlin, Germany), and Astronergy Solar Netherlands B.V. and Chint Solar Netherlands B.V. (both based in Amsterdam, Netherlands).

The Defendants requested that the Claimant be ordered to provide adequate security for the costs of the proceedings, arguing that because the Claimant has its registered office in the People's Republic of China, it was not sufficiently certain that a cost decision would be accepted and enforceable in China. They contended that there was no reason why enforcement of UPC decisions in China should be any easier than enforcement of German decisions.

The Claimant opposed the application, arguing that the Defendants had not provided any substantive arguments supporting their allegation that enforcement would be nearly impossible or highly difficult. The Claimant contended that the mere fact of having a registered office in a non-EU/non-EEA country cannot be relevant to the decision on security for costs, as this would constitute a priori discrimination based on nationality, which is not provided for in any source of law. The Claimant further argued that judgments from countries including Germany, Singapore, South Korea, USA, Australia, British Virgin Islands, Canada, Netherlands, New Zealand, and the UK have been recognized and enforced in China, citing Article 267 of the Law of Civil Procedure of the People's Republic of China.

The Court, presided by Judge Sabine Klepsch, applied the principles established by the Court of Appeal in UPC_CoA_217/2024 (Audi v. NST) and UPC_CoA_548/2024 (Arke v. SodaStream), noting that the burden of substantiation and proof lies with the defendant making the request, but once credible reasons are presented, it is up to the claimant to challenge them. The Court must determine whether the claimant's financial position gives rise to a legitimate and real concern that a possible order for costs may not be recoverable or enforceable.

The Court held that the Defendants' interests in obtaining security did not outweigh the Claimant's interests. The Court found that the Defendants had not presented concrete evidence supporting their allegation that enforcing a cost reimbursement order would be particularly difficult in China. The Court emphasized that a party's domicile in a non-EU/non-EEA country cannot be the sole basis for ordering security for costs, as this would constitute impermissible a priori discrimination not provided for in Art. 69(4) UPCA or R. 158(1) RoP. The Court distinguished the LD Munich's view (CFI_425/2024) and disagreed with the LD Vienna's approach (UPC_CFI_33/2024), noting that the UPC, which came into force on 1 June 2023, has no experience of its own in enforcing cost decisions in China. The Court further noted that China has implemented a simplified procedure for service by electronic means, which could potentially facilitate both service and enforcement, and that the fact that Defendant 1 (Chint New Energy Technology Co., Ltd.) is also a Chinese company may further increase the likelihood of successful enforcement of a cost decision in China.

The Court therefore dismissed the Defendants' application dated 7 October 2024 for an order requiring the Claimant to provide adequate security for costs.