SodaStream Industries Ltd. v. Aarke AB

This order was issued by the Düsseldorf Local Division of the Unified Patent Court on 5 August 2024 in case UPC_CFI_373/2023, concerning European patent EP 1793917. The claimant, SodaStream Industries Ltd., an Israeli company and part of the PepsiCo group, brought a patent infringement action against the defendant, Aarke AB, a Swedish company. The defendant filed an application (App_35905/2024) seeking an order for security for costs in the amount of EUR 400,000, oriented at the decision on scale of ceilings for recoverable costs.

The defendant argued that because the claimant is incorporated in Israel, there was a risk of additional procedural burden and uncertainty regarding the enforcement of a UPC decision on costs in the absence of applicable international treaties. While acknowledging the claimant's solvency, the defendant expressed doubts about the claimant's willingness to comply with a cost decision, alleging that the claimant initiates infringement proceedings merely to cause material harm and would use all available measures to avoid complying with cost orders.

The claimant opposed the request, arguing that the defendant had not presented convincing facts or arguments. The claimant pointed to Article 17 of the Hague Convention on Civil Procedure (concluded 1 March 1954), to which Germany, Sweden, and Israel are all contracting states, as expressing mutual understanding that court proceedings in these states are efficient. The claimant further argued that there was no evidence it had evaded enforcement of foreign judgments or that it would not comply with the court's judgment. The claimant emphasized that it is financially strong, being part of the PepsiCo group with significant assets within UPCA member states, and that the legal enforcement of intellectual property rights does not constitute abusive behavior.

The court, acting through judge-rapporteur Dr Thom, applied established UPC case law on security for costs under Rule 158(1) RoP, which considers factors such as the financial position of the party and the likelihood that a cost order may not be recoverable or enforceable. The court found that neither a financial risk nor a likelihood of unenforceability had been demonstrated. It noted that the claimant's financial ability to comply with a cost decision was undisputed. Even if the Hague Convention could not be considered an international treaty recognizing the enforceability of UPC judgments in Israel, the court found no additional procedural burden or uncertainty. The mere fact that the claimant's registered office is in Israel did not justify ordering security for costs. The defendant's doubts about the claimant's compliance were unsubstantiated by facts, and the court rejected the allegation that infringement proceedings were being used as a tool to cause material harm, holding that the legal enforcement of intellectual property rights is not per se abusive. The defendant had not presented any facts or evidence that the claimant had ever evaded enforcement of foreign judgments or intended to do so.

The court therefore dismissed the defendant's request for security for costs. The order was subject to review by the panel on a reasoned application by a party lodged within 15 days of service pursuant to Rule 333(1) and (2) RoP.